Leveller

here we go again…

Originally uploaded by loungerie

American Republican’s say that because Ms Pelosi was mean to them, they decided to throw their toys out of the pram in a fit of pique. Apparently throwing themselves into a major recession it is more important so as to preserve their cherished beliefs in Reaganomic market voodoo.

Perhaps the next time they vote on this they’ll add a clause to grab back the $36 billion in bonuses the city spiv’s paid themselves last year.

EDIT: following the vote $1.2 trillion was wiped of US share prices.

That’s a big whack out of everyone’s 401K and all because Nancy made the Republican’s cry.

send in the clowns

The US Federal Reserve bails out AIG with almost $100,000,000,000 as its stock value crumbles. But what has brought this giant of insurance down? The answer appears to be that the value of AIG’s investments known as Credit Default Swaps (CDS), apparently these are supposed to be a form of insurance policy (AIG’s business is insurance) against bad debt.

At the end of last year concerns were being expressed that the value of these insurances were grossly overestimated resulting in a write down of $4.88 billion.

It seems that not only was AIG’s insurance risk assessment lacking but their Crisis Management Services just wasn’t up to the job either.

Over the last couple of decades companies like AIG have charged huge fees, and paid themselves massive bonuses, for advising on, and selling derivative investments like Credit Default Swaps.

Today many suspect these derivatives are worthless.

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BBC Link about bloody time.

Being a higher rate tax payer this doesn’t affect me, but its been appalling hearing about the sum of monies that very low paid people would have lost through the abolition of the 10p rate. The sums that would have been lost weren’t much in absolute amounts £50-£100 but a huge figure to those on minimum wage.

Appalling though that was, the most disgraceful part was listening to various Labour Party apologists claiming the numbers of loser were far smaller than those that thought they were affected. That may have been true, but to say that people should shut and forget about those at the bottom of the pile, the burger flippers, shop and office assistants just out of school, is outrageous.

Its taken the bastards over a year to fix this, at least 12 times longer than it took them to decide to give 100s of billions in handouts and guarantees to city scoundrels.

Now if only I could recall the names of those MPs that defended the original proposals.

From the BBC:

Liberal Democrat leader “No Shit Sherlock” has pledged to tackle “bad practice” in the City of London as he outlined plans for a better system of regulation.

The current turmoil is due to thieving by the financial institutions, at the moment we are focussing on the write downs that the banks are announcing, but in the end they will mostly recoup these ‘losses’ by selling the repossessed properties. In reality the losers are the poor in the USA who were duped into signing mortgage agreements. This whole fiasco is the largest transfer of equity from African Americans to City Financiers since the ending of slavery.

This isn’t the first time that financial institutions have been caught either. There was miss selling of pensions on the 1980s, miss selling of endowment mortgages in the 1990s, and now these sub-prime mortgages which sounds remarkably like Savings & Loans mk2.

You’ll hear the pundits, politicians, and industry apologists excuse the behaviour, they’ll tell you that no one could have foreseen it, and that extra regulation isn’t the answer. Well may be it isn’t, what we should do is pick ten or twenty of the leading bankers and chop their thieving fucking hands off.