August 25, 2007 archive

Shake Your Blues Away

Want to see something scary?

Check out this very major piece of banking news that is currently flying under the radar, for the most part:

Fed Bends Rules to Help Two Big Banks

Excerpt:

NEW YORK (Fortune) — In a clear sign that the credit crunch is still affecting the nation’s largest financial institutions, the Federal Reserve agreed this week to bend key banking regulations to help out Citigroup (Charts, Fortune 500) and Bank of America (Charts, Fortune 500), according to documents posted Friday on the Fed’s web site.

The Aug. 20 letters from the Fed to Citigroup and Bank of America state that the Fed, which regulates large parts of the U.S. financial system, has agreed to exempt both banks from rules that effectively limit the amount of lending that their federally-insured banks can do with their brokerage affiliates. The exemption, which is temporary, means, for example, that Citigroup’s Citibank entity can substantially increase funding to Citigroup Global Markets, its brokerage subsidiary. Citigroup and Bank of America requested the exemptions, according to the letters, to provide liquidity to those holding mortgage loans, mortgage-backed securities, and other securities.

Summary: In contravention of the current rules, the Fed is letting two ginormous banks lend a total of up to $50 billion to their brokerage subsidiaries.

For some analysis on what this might mean, see this thread:

Ticker Forum – Oh oh – Banks in MAJOR trouble

Or from the left, if you prefer:

Democratic Underground – Fed Bends Rules

Serious talk of major panic and financial disruptions… Bank runs and government seizures even… Or at the least, dozens of billions of dollars in handouts to some of the ultra-rich  investors who might otherwise become just a little less rich over the next few months.

Personally, I don’t know enough about banking and finance to say whether this is basically a nonevent economically, or the beginning of the next depression.

But one thing this tells us for sure: The Fed is absolutely, 100% in the pockets of the richest folks in the world — all at the expense of the taxpayers.  Maybe that’s not huge news, exactly, but at this particular juncture in our economy, it is quite disturbing.

Probably worth contacting your congressperson about, at the very least.

Some thoughts

thinking about blogging the future… and just decided to throw some stuff out

blogging the future tense
blogging the fourth wall
breaking the fourth wall
blogging the salon
thread bare
blogging the navel
blogging the gate
extreme blogging

i don’t know why i’m doing this because, while i LOVE titles, i am not good at them (or headlines)

but i love when two or three words can knock me on my ass

I think this bear’s repeating.

The Dawn of the Information Age and DailyKos
by pinche tejano

Wed Aug 09, 2006 at 12:01:28 PM PST

I remember when I first came by here, it was off a link from Buzzflash!, which is still in my daily news rotation. Back then; I made the daily rounds of everything from Little Green Footballs to Crooks and Liars and the always the amusing Drudgereport. See, I plan to be a historical writer when I get long in the tooth, and I was looking for something, I just did not know what it was yet. I could see a subset of the Internet evolving into something, put since it did not exist yet, I could not put my finger on it. Then I came across DailyKos.

Arriving just before the post-Katrina user explosion, I gladly signed up and was assigned user 60118, and I recently heard DKos was about to break 100,000, which probably has happened during the epic CT-Senate week. It is said week that I was waiting for, because I have a good eye for picking horses, and I knew this is where Dkos was headed. Remember this day, this week my friends, because you, as community, have finally got your foot in the gate. Always knew you would. You, as a community, have combined all the right parts to make something special.