February 7. 2010
In response to the review of Hank Paulson's latest book on Seeking Alpha,
Hi All,
I use an excerpt from THOUGHT OF THE DAY from my podcast site www.franconomics.com below:
"The conservatives have branded Geithner as Mr. Tax Cheat. This thought by no means condones him for cheating the IRS with $112,000 in federal taxes. But let's think about his predecessor for a minute, Mr. Paulson. Mr. Paulson sold more than $300 million in Goldman Sachs stock at peak and all the capital gains were waived, since he was joining the Bush Administration. The treasury lost 100 million dollars. $100 thousand vs. $100 million. So, who is the BIGGER TAX CHEAT?
Now, let's do something more positive and material... Can the Goldman Bonus of 2009 (more than $10 billion dollars) be pulled back and taxed at 100%? Let's push the local Congressman / Senator to initiate a bill to this effect today --- Just as UK and France are taxing bank bonus at 50%, let's tax our bank crooks at 100%. And let's make it retroactive, with effect from 2007. I.e, let's pull that Goldman bonus for 2007, 2008, and 2009 back into the US Treasury. Yeah, that will be real God's work...Let's do it man... "
Now don't buy the paulson book; if you want to buy anything, buy my second book which will be available on Amazon.com this summer:
(COMING SOON IN PAPERBACK)
THE 20 TRILLION DOLLAR VALUE DRAIN: How Goldman and Other Banks Looted America and Why They Will Do it Again
Let's all remember that paulson was the goldman CEO before becoming treasury secretary....
If you want to subscribe to my financial economics podcasts, the RSS feed is ---
rss.franteractive.com/...
Enjoy life, don't support the blood-sucking financial crooks ---
Cheers,
Sam Mishra, MBA (MIT Sloan)
September 23, 2009
In response to a recent blog titledFlaws inherent in the current commission, and how to minimize them by Prof. Bill Black:
Prof. Black,
Good points. From Boston to Bay Area, people (these are educated, elitistic / well-to-do people from all ethnic / racial / political backgrounds) tell me: What investigation. Nothing will happen. An almost parallel thought process is: Tell me how to make some of it the next time it happens (i.e., the bankers made a lot of money this time around, and I couldn't get some of it, next time I shall).
These are the symptoms of the current ethical / moral values this country is under. Keep writing and speaking against the vested interests; these are pretty powerful forces we are working against. But unless certain truths are exposed, our progeny will suffer, and this country's (and the world's) values -- economic, moral, ethical; will continue to deteriorate.
I have used sound-bites from your April Interview with Bill Moyer in my latest podcast --- you can listen to it here --- http://tinyurl.com/lty3nz --- thanks for your insights ---
Respectfully,
Sam
August 20, 2009
In response to Digg's Invitation to ask Timothy Geithner questions, we have posed the following to Secretary Geithner:
(Simple Question) In 2008, Goldman Sachs would have gone bankrupt had they not received the 23 billion in public funds ($12.9 billion from AIG + $10 billion TARP), and from that money, they have paid the 2008 bonus of billions of dollars to their top bankers. They have set aside again billions to pay bonus this year (2009). If Congress passes a law to tax the goldman bonus of yesteryears (2007 and 2008) at 100% and pull the money back to the US Treasury, would you support taking that money back into the US Treasury and passing it on to the foreclosed homeless Americans? If Congress passed a law also to pull Goldman into the purview of the Comp Czar (so that they can't pay themselves again up to 10 billion dollars in heavy bonus in 2009), will you actively support it, as the Guardian in Chief of the US Treasury?
(A little more Complex Set of Questions) In a recent FRANCONOMICS podcast, we have referenced past asst treasury secretary quotes (transcript can be read here ---
http://www.franconomics.com/July-12-2009.html) that you work for Goldman Sachs (and not the US Treasury). Also, you have kind of taken the side of the Goldman CEO (when quizzed by a Senator that should the Goldman CEO not be fired by taking $10 billion in TARP funds, laying off 10% off its workforce, and pocketing upwards of $100 million in yearly 2008 compensation, you opined that it was for the board of Goldman to decide that), and as NY Fed President, were in the middle of the FED bailout of AIG (which gave Goldman 13 billion dollars from the 85). Do you think that like Hank Paulson, you are running the US Treasury in the midst of a lot of conflict of interest?
Some soothsayers (including ex IMF Chief Economist Professor Simon Johnson) have suggested that you will make a great Fed Chairman to replace Bernanke (personally, I don't think you qualify, since you don't have a Ph.D, and hundreds of Ph.Ds are roaming unemployed, since the real unemployment is 1 in 4 people) and will be effective as a regulator, since you recently used the F* word at some regulators. However, others (like Prof. Bill Black) have contended that you failed as a regulator in your last job (even though you quipped in congressional hearings that you never were a regulator, professors like Bill Black) think that your job was to regulate. So, suppose you don't get the Fed Chairman job, and suppose a Pecora II investigation takes off in due earnest, and suppose the official unemployment climbs to 12% (unlike what you guys are thinking - 10% tops by 2010 end), and suppose President Obama ousts you because of popular opinion, will you take up a job with a hedge fund / Goldman, or will you start your own hedge fund like Madeline Albright did?
Personally, I think there should be laws against treasury secretaries joining back banks. See where Rubin is now. Goldman to US Treasury to CitiGroup? Even Mr. Summers was speaking and Wall Street was paying. This was after his stint as Treasury Secretary. If congress brings in a law to debar THE US TREASURY SECRETARY from joining the banking sector as a full time multi-million dollar compensated employee, will you support that law in public interest?
Also, don't you think Goldman would have gone bankrupt had they not received the 23 billion in public funds ($12.9 billion from AIG + $10 billion TARP), and from that money, they have paid the 2008 bonus of billions. If Congress passes a law to tax the goldman bonus at 100% and pull the money back to the US Treasury, would you support it?
Finally, what is your administration doing so that such a financial fraud which made millions foreclosed homeless and more millions jobless unemployed, is not repeated again?
Respectfully,
Sam Mishra, podcaster, FRANCONOMICS.COM
Author of the upcoming book titled "The 20 Trillion Dollar Value Drain: How Goldman and Other Banks Robbed America and why They Will Do It Again"
In response to Simon Johnshon's blog titled Larry Summers, Economic Recovery, And Ben Bernanke on Baselinescenario.com
August 9, 2009
Professor Johnson,
Suggesting that Geithner will be a good replacement for Bernanke is as outrageous as some commentators pointing that Summers will be a good one too. What I do are weekly podcasts where I document the true nature of these bureaucrats and back it up by data or quotes from humans with some credibility. My podcasts are located at http://franconomics.com , the website where I also announced my upcoming book tentatively titled "The 20 Trillion Dollar Value Drain: How Goldman and other Banks robbed America and Why They Will Do it Again."
A former Asst. Treasury Secretary (albeit from the Regan era when the deregulations really started) has quipped that Geithner works for Goldman Sachs. He may actually go to Goldman after his stint in the Treasury; following the footsteps of Rubin, Summers, etc. We have documented in the "Thoughts" section of our website what Geithner had to say when quizzed about the Goldman bonus of 2008 (it can be argued that the money came from the AIG handout of $12.9 billion or the TARP of $10 billion which the bank took last year)... Geithner said, "it is for the Goldman board to decide that." Professor Black on Bill Moyers journal has rightly pointed out that Geithner failed to regulate as NY Fed President. However, the way things are moving with the Obama administration, I won't be surprised if Geithner gets the job. What you should not do is prop up a semi-wall-street insider (Geithner's job as President of NY Fed was to regulate the NY banks, that he did not do so or does not agree that he was ever a regulator shows a lack of responsibility), for Geithner was also assistant to a powerful banker by the name of Rubin during the Clinton era.
Now, one of the commentators has suggested Summers as the other choice. Summers? The Friedmenite who threw away the provision within the Glass Steagall Act which regulated the banks and prevented them from being too big to fail? The defense Summers and others give is that Wall Street bankers have houses and jobs and they are people. But as you had rightly pointed out, these bankers mismanaged their business, and should have paid the price...instead they are getting the same nice bonus in 2009. Whatever happened to Obama's comments 6 months back on the fact that 20 billion dollars in bonus were paid in 2008 to these bankers; Obama was sitting there next to Geithner expressing outrage, but they let Goldman pay back the 10 billion in TARP so that Goldman can escape the comp czar.
From the fumblings of Hank Paulson during his congressional hearings, it is clear that a Pecora II needs to be started ASAP. May be Paulson broke the PCA (prompt corrective action) law by not taking these banks, inluding Goldman, into receivership. The Law should hold equal sway, no matter whether someone is a powerful ex-treasury secretary or a road-side thug who mugs people...
Coming back to our fellow MIT alum Bernanke, it looked to me when he bailed Bear Stearns out and then chuckled in the subsequent congressional hearings that he had everything under control; it was obvious that he ws inept at using the resources he has as a federal reserve Chairman. I had challenged him when I wrote the First of my Value Drain series of articles on the eve of the AIG bailout (Sep 2008) that he had still not gotten his act together 6 months into the Bear Stearns bailout in terms of adding up the derivatives and coming to a number. In fact he has acted like the Kudlows of the world, who have been going every month for a year now that the economy is turning around, it is turning, it is going up.
Every month 300 to 500 thousand people lose employment; and foreclosure data show that personal bankruptcies are going up, along with unemployment. It seems to me that the only entities who are doing well, along with the Goldmans, are the banks who are into mortgage business. Previously, the banks had to pay us 3.5% on CD and could lend us at 6% mortgage. Now they will pay us 1.5% on CD and will still lend us mortgage at 6%.
When will the American consumer learn? Never. I am shocked at the short memory of some of the commentators here. They think as if the crisis has been averted. No! The crisis is in the psyche of these Greedy Friedmenites: we will loot and plunder; you just watch!
Hence the title of my forthcoming book "The 20 Trillion Dollar... Why They Will Do It Again?" I will send you a copy when I am done. I am after radical reform, including reforms such as preventing Cabinet Level Secretaries from starting hedge funds or joining Wall Street: You want to start a hedge fund, fine. But don't get into public service then! Put a limit to your greed...Else, everybody would like to be a Madeline Albright, and then start a hedge fund.
Respectfully,
Your former student,
Sam Mishra, MBA (MIT Sloan)
In response to Matt Taibbi's article in Rolling Stone (on Goldman Sachs) titled The Great American Bubble Machine:
July 4, 2009 (Independence Day 2009)
In podcast after podcast, we at Franconomics have demanded that the Goldman bonus for 2008 (and possible prior years) be taxed at 100% and pulled back. Check those out at http://www.franconomics.com. Pipe dream, huh?
Look at the audacity of these corrupt Goldman bankers. They announced that the 2009 bonus will be as good (if not better) for its employees as 2008. This creates moral hazards for all of us, particularly the taxpayers, who now own the majority of Citigroup, which hiked up the salaries of employees, citing the fact that competition (read Goldman) is luring away the best and the brightest. In our podcast, I have asserted that lots of unemployed PhDs roaming the streets of Cambridge (and Boston) can take up the jobs of those dull-witted Citi employees (being sugar coated now as bright) who ran the businesses therein to bankruptcy.
On behalf of people who got a good education (I went to MIT Sloan for my MBA), I apologize to the author on behalf of those elites who commented that the author of this article did not go to a good school. What Matt has done is shown courage by going after the most influencial group of people on the planet (i.e., Goldmanites) whom I call in my podcasts by various names: free-riding parasites, greedy hypocrites, Friedmenites, and "toxy-morons." I coined the word "toxy-moron" specifically to address the Friedmenites who vouche eternal loyalty to Milton "Mr. Greed" Friedman who touted free-markets. But these Friedmenites, in an oxy-moronic way, want to make the markets anything but free, they just rigged it for banking, and will again rig it for health care (and the burden will be again on taxpayers). Also, they have influenced the Federal Reserve to load up the Fed balance sheet with "toxic waste" by sugar-coating this waste as "legacy assets." These Goldmenite oxy-morons who deal with "toxic" finance are appropriately called "toxy-morons" in our podcasts.
Good job Matt.
Cordially,
Sam, Podcaster, FRANCONOMICS.COM
In response to Simon Johnson's Baselinse Scenario blog titled Remember Chuck Prince!
Prof. Johnson,
Are you sure there is risk of regulatory over-tightening? I think not.
Friedmenites like Summers are neo-Friedmenites, that is all. Greed is still king, and business schools will take their time to look and teach "beyond greed." (Some) Congressmen hit their heads on the walls that Dr. Summers hates construction or that Dr. Summers hates manufacturing --- and we see the results, Chrysler is allowed to go bankrupt and take down 789 dealerships, GM on its way to bankruptcy is taking down 1100 dealerships, yet creme-de-la-creme banks like Goldman which would have gone bankrupt sans the 10 billion dollar TARP plus the $12.8 billion dollar TARP derived AIG handout, paid nice bonus to execs in 2008 and boldly proclaimed recently that the 2009 bonus will match the 2008. Car salesmen will lose their jobs, but Dr. Summers will try to save as many bank jobs as he can. The average American thinks that the car salesman is a conman. But these sales folks are really gullible people compared to the sophisticated bankers and their planted reps at all levels of the administration...
Now, I read some financial engineering in MIT Sloan while pursuing my MBA there 9 years ago, and you can listen to my views in my last weekly which aired less than 12 hours ago at --- http://tinyurl.com/q2gt2t --- in this weekly podcast, I have suggested to the Administration that reform should be both a bottom up and a top down approach --- pull back the Goldman bonus for 2008 by taxing it at 100% and return the money to the taxpayers.
You can also read my article where I have shown that the actual bailout ($8.7 trillion) + stock-market handout ($5 trillion) is equivalent to the American economy / GDP of $14 trillion dollars. I call it the 14 trillion dollar value drain (similar to value chain analysis of Porter, except that instead of creating value, the banker parasites drained value), and the article is located at http://www.franconomics.com/fourteen-trillion-dollar-value-drain-II.html
I found that you are now an economic adviser to Congress. Keep pushing the agenda that radical reform demands that bank executives get NO BONUS, and that includes top (Goldman) to bottom (Citi)...
Best regards,
Sam, MBA (MIT Sloan)
In response to Daya Baran's blog on WebGuild Silicon Valley titled Fleeing Silicon Valley
April 14, 2009
To my fellow Ramulu's AKA technologies in da Vally:
Sirs,
The reason you people work so hard is capitalists make you sweat, while they sip champagne with royalties and celebrities... See Daya's other post on IBM. Anyway, we at http://www.franconomics.com are getting to the bottom of the financial scams --- TARP, pPiP, TALF, bailout, stimulus. We posted the video on our homepage where Codepink accuses the ultra-ultra-high-powered-ex-harvard-president Larry Summers and the leader behind Obama's economic brain trust for pocketing $5.4 million in salary for working 1 day a week...
I can call myself a technologist all I want, I can call Silicon Valley the best place weather-wise, I can live in the bubble that in valley house prices will not fall, I can work all my life so that I can keep paying mortgage to the bank which will foreclose me otherwise; but it is a fact that smart people are there everywhere -- From the Sandy Weills sipping champagne while you fix Citi's IT systems, to the $5K per year IBM programmer who took your $50K technologist job.
Wake up, smell the roses. How long will you keep waking up and smelling coffee and be a plaything at the hand of VCs??
With best wishes,
Sam
In response to Barry Ritholz's blog on RGE Monitor titled Larry Summers: Wrong Man for the Job
Apr 4, 2009
Barry,
Good to see this blog, I gave you a link from mine --- http://franconomics.com/
Once you get corrupt, it is hard to get out of it... Larry, a brilliant economist once upon a time (got full tenure at Harvard at 28, Bates Clark medal before age 40), became secretary of treasury under Clinton, after Rubin. Apparently, he was a Rubin protege. Rubin became member of Harvard board around the same time Summers became Harvard president? And now is a board member of Citi, which got $50 billion from Uncle Sam in TARP money?
Anyway, once he was treasury secretary, Summers had stopped being an academic / honest professor and was on his way to power, which can corrupt you...Harvard Presidency was next, and once he blew that because of some sexist stupid comments, the hedge fund gig came along, etc. etc.
It is indeed tragic that Obama recruited him to be the Director of NEC...He should have been left alone to do his speaking engagements (apparently, he is a good economist and a Milton Friedman disciple) and his hedge-fund stuff... In this time of wall street crisis, where Wall Street has blown it, he should not have been allowed to influence policy...
Also, I mention in my website http://franconomics.com that April 1 was indeed a Financial Fools day. AIG got close to 200 billion in TARP, 12.8 billion of which has gone to Goldman. Goldman execs have taken multi-million $$ in bonus for jobs done well. Can be argued the Goldman bonus came from TARP? And nobody seems to be investigating these bankers who keep looting taxpayers' money, in the name of free-market-Friedman-capitalism and democratic meritocracy and meritocratic democracy...
Apparently, Rubin, Summers' mentor and predecessor as US Treasury Secretary was against regulating derivatives? Also, a washington post report came out suggesting intermediary orgs have been formed which can receive TARP money, funnel it to banks, and the exec compensation in these banks can't be subject to congress oversight.
Obama seems to have blinders on. He has to wake up, else our money, your money, my money, the taxpayers' money, will keep getting funneled to the rich bankers, while the poor American loses his home and his job, while his progeny inherit a massive future tax bomb...
If Summers has any spine, he should come out in the open and make transparent how the TARP money is flowing into the bank coffers of the Wall Street bankers. Summers should also recommend which CEOs of bailout recipients (oh yeah, including Goldman, which indirectly received close to $7 billion through AIG) should be fired. The Obama administration should demand it, and demand that all the Goldman bonuses be pulled back; else the Obama administration should pull back the $6.8 billion AIG gave to Goldman... The Govt has the power, but people like Summers might be blocking it and telling Obama otherwise...
Wow, when will this well meaning president get well meaning people to advise him? That is what the country needs now, not the Milton Friedman dose of greed and no govt. regulation which has ruined the lives of millions of Americans...
Have a good day,
Sam
Mar 15, 2009
In response to Jake Tapper's Blog on ABC News titled A.I.G. = Allowing Irreversible Greed?
Fire the AIG management lock stock and barrel. That is what I recommend in thought for the day on our Global Economy Monitor website http://franconomics.com/ ; with 1000's of Ph.D.s drawing unemployment, there is no dearth of talent to run this company. What contractual obligations? You can't fulfill your insurance obligations and take $170 billion, and then try to uphold your contractual obligations to these executives who irresponsibly squandered $170 billion?? Give the underemployed, over-mortgage-burdened American taxpayers a break.
Sam
Mar 02, 2009
Response to Joe Nocera's blog on nytimes.com titled Who’s Really Being Propped Up in the A.I.G. Bailout?
Joe,
As unsatisfactory as Timothy Geithner's comment in response to a Senator who asked in the aftermath of the $10 billion bailout --- "The GS CEO made over $100 million in compensation. GS also laid off 10% or more of their workforce. Why shouldn't we consider replacing him / the management?" Geithner responded --- "It is for the Goldman board to decide."
Pluz-eezee...
If your blood is not already boiling, listen to my podcast on this here: http://tinyurl.com/bd9f66
Thanks,
Sam
Feb 19, 2009
Response to David Gregory of MSNBC drawing holes in Obama's housing plan:
David,
A couple of things why the plan is good ---
1. Why should the home values slide be arrested? Let people who could not buy during the bubble in California etc. have a chance, they are waiting for prices to slide further.
2. Reducing mortgage payments to keep it down to 35% or less is keeping up with the economic fundamentals. The mess got out of whack because people were paying 55% of their income back in 2005 in your hometown LA towards their mortgages, when nobel laureates like Paul Krugman called it a bubble...
Listen to my podcast available on my url economy.franteractive.com if you have time...
Sam
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