Wall Street's 10 Greatest Lies of 2009: Lies that justify screwing over Main Street

[Better Believe It]

Wall Street's 10 Greatest Lies of 2009
Lies that justify screwing over Main Street
By Nomi Prins
December 28, 2009

On December 13, President Obama declared that he was not elected to help the “fat cats." But the cats got another version of that memo. A day later, 10 of them were supposed to partake in some White House face-time to talk about their responsibilities to the rest of the country, but only seven could make it. No-shows for the "very serious discussion" -- due to inclement New York weather or being too busy with internal bonus discussions to bother with the President -- were Goldman Sachs CEO Lloyd Blankfein, Morgan Stanley CEO John Mack and Citigroup Chairman Richard Parsons.

Yes, Obama inherited a big financial mess from the Bush administration – which inherited its set-up from the Clinton administration (financial recklessness, it turns out, is non-partisan) -- but he and his appointees have spent the year talking about fighting risk and excess on Wall Street, while both have grown.

Meanwhile, Wall Street is restructuring (the financial equivalent of re-gifting) old toxic assets into new ones, finding fresh ways to profit from credit derivatives trading, and paying itself record bonuses -- on our dime. Despite recent TARP payback enthusiasm, the industry still floats on trillions of dollars of non-TARP subsidies and certain players wouldn’t even exist today without our help.

Wall Street’s return to robustness and Main Street’s continued deterioration are the main takeaways for 2009 that stemmed from the 2008 choices to flush the financial system with capital and leave the real economy to fend for itself. Lies that exacerbate this divide only perpetuate its growth. With that, here is my top 10 list of lies. Please consider adding your own, and let’s all hope for a more honest New Year.

1) The economy has improved.
2) If you give banks capital, they will lend it out.
3) Taxpayers are being repaid.
4) Homeowners are being helped.
5) Big banks will help small businesses.
6) The Fed values transparency.
7) History will not repeat itself.
8) The pay czar will fight against – pay.
9) The lobbyists made us do it.
10) Citigroup is the picture of health and too-big-to-fail is over.

Read the full details regarding the above top 10 list of lies and full article at:

http://www.alternet.org/media/144776/wall_street%27s_10_greatest_lies_of_2009?page=1

If DU'ers have any lies to add please include them in your comments.

[unblock]

1. as with all great lies, these are mostly half-truths

1) "the economy". i.e., gdp, HAS improved. things went from REALLY REALLY sucky to merely REALLY sucky and now just sucky. that's improvement even though it still sucks. moreover, gdp going up does NOT mean more jobs. that comes later, possibly much later.

2) give banks more capital, they WILL lend it out, sooner than they otherwise would have. but only after they've filled the deep, DEEP hole they dug for themselves. giving them money helps them fill the hole faster, and therefore gets them lending sooner. BUT NOT YET. we have to wait one year instead of two years, perhaps. that's the way in which giving them money helped. obviously, creating NEW banks would have started lending faster.

3) taxpayers ARE being repaid -- by the strong, healthy behemoth banks. it's the shakier ones that will default. the "DUH" in all this is OF COURSE the good loans pay back in full and pay back early and earn the lender good solid interest. it's the BAD loans that take time. no one defaults in a hurry.

4) homeowners ARE being helped. fewer than 1% of the ones who need help, but still.

5) big banks WILL help small businesses. but they're very, VERY picky, because they're not fully back to lending yet; see above.

6) the fed DOES value transparency -- in others, not themselves

7) history will indeed NOT repeat itself. it just riffs off old story lines.

8) the pay czar, well, as we know, calling someone a czar is a sure way to ensure they have no power and get nothing accomplished.

9) the lobbyists made us do it -- this one is true, though it goes on and on without objection. the fundamental problem is that no one GETS to washington unless they prove themselves corruptible -- how else does one raise enough funds to win an election? and even if they did, in order to get anything accomplished, they have to show they can play ball. otherwise, the money will flow to a challenger (whether in party or not) and that politician will have a short shelf life indeed. the reality is that the best politician is not the one who is uncorruptible but the one who is minimally corrupted.

10) citigroup is -- wait, whoever said citigroup was sound?

[Better Believe It]

3. "whoever said citigroup was sound?" Citigroup CEO Vikram Pandit said that.

Once the nation’s largest bank, later its largest bailout recipient, the firm exited its TARP obligation on December 14 with CEO Vikram Pandit stating, "Once Citi repays the $20 billion of TARP trust-preferred securities and upon termination of the loss-sharing agreement, it will no longer be deemed to be a beneficiary of ‘exceptional financial assistance’ under TARP beginning in 2010." (Read: I don’t want to hear about compensation caps anymore!)

He went on to say that, "By any measure of financial strength, Citi is among the strongest banks in the industry, and we are in a position to support the economic recovery."

Shareholders didn’t feel the same way. Citigroup shares already trading well below those of its main competitors have fallen 13.5 percent since that announcement. One of their key clients, the Abu Dhabi Investment Authority, accused the firm of misleading them over a $7.5 billion investment. Plus, in order to come up with the money to pay back the government, they had to raise it in the markets, thus diluting their stock – all to keep their petulant star employees happy at bonus time.

The Citigroup story should be examined for the other big banks. They may talk tough about paying back the government, but underneath they are hurting. And their pain will become our cost again – because nothing fundamental has changed this year, and that means – floating on our public money, these banks are actually still ticking time bombs.

http://www.alternet.org/media/144776/wall_street%27s_10_greatest_lies_of_2009?page=4

[Nikki Stone1]

4. Paging Robert Rubin.....

...

[unblock]

5. well, ok, i'll grant you the single most biased person in the world.

[Better Believe It]

6. I'm biased against the Wall Street banksters? No! Not me! Luv em to death!

:)

[unblock]

7. i meant citi's ceo :)

or is that you???

:hi:

[Better Believe It]

9. And I luv citi's CEO almost as much as I luv Dubya and his lovely Stepford wife.

:)

[Greyhound]

2. K&R for those that don't know what is really going on. n/t

[inna]

8. Thanks! I saw this today and was going to post it too. nt