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Focusing on Wall Street's Future

Charles Solomon, a trader with Barclay's, reviews stock information on a monitor during late trading at the New York Stock Exchange, Thursday March 18, 2010. (AP)

Wall Street bankers, grilled again in Washington this week.

The devastation from Wall Street’s epic failure in our time rolls on and on. The work to prevent a repeat is more halting.

Super investigative journalist Roger Lowenstein has gone deep into the story of where Wall Street went wrong. Now, he’s holding the failings up against proposed fixes, and seeing way too many unaddressed problems.

A great, flawed era of Wall Street ways should be coming to an end, he says. But is it?

This hour, On Point: Roger Lowenstein on the future of American finance.

Guest:

Roger Lowenstein, contributing writer for The New York Times Magazine and former reporter for the Wall Street Journal. He is author of “When Genius Failed: The Rise and Fall of Long-Term Capital Management” and “Buffett: The Making of an American Capitalist.” His new book is “The End of Wall Street.”

You can read an excerpt from Lowenstein’s new book.

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  • Michael

    Goldman Sach came out the prior day, 70 plus% made in inhouse trading, Windfall profits from AIG, still using that .025% interest to borrow from the government and massive bonuses paid out. And of course they will give the finger to the taxpayers since there making money, than come hat in hand once again there bet goes south.

    but hey they mention client alot in a 8 page letter to clients so now it’s cool.

  • Steve Wisth

    American capitalism is no such thing.
    It is much more akin to the oligarchies in Latin America.

    Our government has evolved into bagmen (and women)
    doing the bidding of the oligarchy. (The revolving door between the major investment banks and Washington as exemplified by Goldman, Citigroup…is not limited to the most recent economic downturn.)

    The general populace is mollified with gadgets that will reduce most to serfs.

    Reform, pitchforks or slavery?

  • troll doll

    you should do another show on tiger woods ;)

  • JP

    There is still no better synopsis of what caused our economic plunge than the award-winning episode of This American Life, called “The Giant Pool of Money.”

    This show makes quite plain the main culprits, as well as the how and why.

    Here’s the link if you haven’t yet heard the show:

    http://www.thisamericanlife.org/radio-archives/episode/355/the-giant-pool-of-money

    Do yourself a favor, listen to the show, and become educated.

  • Ellen Dibble

    Where were these glad-handing bankers when I spent a decade trying to get a mortage to buy an apartment building? Bank of America said we don’t do commercial — or we don’t do residential — whatever they called it. Went to a mortgage broker who assured me he could provide a mortgage for anything under the sun. But for a multiunit building? No go. I care a lot, because apartment buildings are being morphed into condos, and preservation needs doing, and I figured I was grown up enough, had savings, could do this. I preferred going into it with other investors, but no one would help.
    The help I got was zero.

  • Todd

    Whatever Wall Street’s future is, I’m sure there’s a trading option on it available at your local brokerage.

    For the average investor, the future of Wall Street is looking a lot like Las Vegas and Atlantic City. May be a good time to invest in neon-light companies.

  • Larry

    If Americans understood what the banks did to bring this economy to the brink of collapse and how they stole not only our treasury but our future they would storm Wall Street.

    Luckily for Wall Street most Americans don’t have a clue.

    http://www.rollingstone.com/politics/story/32255149/wall_streets_bailout_hustle/print

  • Dave

    Tom, I tune in to right-wing radio now and then for chuckles. The thinking there is that banks, Wall St. or lack of regulation is not to blame. The crash was caused essentially by The Community Reinvestment Act, ACORN, and government over-regulation that forced banks to make bad loans to the poor. Please ask your guest to comment on these ideas.

  • Monica

    Can you ask your guest when we are going to get an equivalent organization like the Federal Food and Drug Administration for these Wall Street Securities?

    We need to put the major rating agencies out of business! We live in a No Risk No Reward society and I have no problem with taking risk. I just demand to know how much risk I am taking and I expect the rating given to a security to be accurate. I do not believe the Ratings Agencies can be relied upon to do that correctly. They rated un-rateable securities for pete’s sake! Idiots!

  • Chris

    Remember this: Money is never made, it’s just moved around, sort of like a shell game.

    The banking industry is no better than a snake oil salesman at the turn of the century. It was an industry created 3-400 years ago by the Rothchilds because they could’t participate in the traditional forms of money management.

    Another problem is that all financial people are jargonologist, plugging and gumming the truth of what is going on with buzz words–nonsense that we are ALL paying for now.

  • Steve

    If the people owned “what they can afford” they would own very little, and certainly not housing.

    Without the illusionary carrot of the “American Dream” we would quickly descend into a situation that would make the French or Russian revolutions look like a Sunday picnic.

    The real question is how we transform capitalism into a free market system that is of the people, by the people, and for the people (my apologies to A Lincoln). We must reward work more than investment.

  • Ellen Dibble

    How is it on the one hand we have moneyed types saying What idiot would work if they were taxed at the rates the government is suggesting? We’ll stop working.
    On the other hand, we see the banker in front of the Senate Committee last year saying, I love my work; this year I’m working for free. That was the president of one of these banks.
    There is no competition at all for salaries when any of these folks say quite freely that they could quit working. I can well imagine. One annual salary like that would last me the rest of my life.
    It makes a mockery of the idea of competition.

  • Rick

    Why the piling on Wall Street alone?

    What about the builders/carpenters/plumbers who profited from building (overpriced) houses?

    What about the people who flipped out of (overpriced) houses in 2007 or early 2008?

    What about the people who couldn’t realistically afford the houses they were in, but got to live in their own home for several years (instead of apartments/rentals)?

    What about the retirees who benefited from the 8% plus yields form many years from mortgages?

    At least the investment banks have paid back the money the government lent them (at usurious interest/dividend rates to boot)!

    I haven’t seen any of the other groups being asked to pay anything back.

  • M.J. Young

    Question to Mr. Lowenstein:

    Given the extent of the financial failures in a laissez-faire private sector, how will future regulations redefine a future private sector (if at all) and what could a future public sector look like?

  • steve

    i saw a recent article that suggested Texas avoided much of the real estate bubble because mortgages are strictly regulated-no cash out refinancing and at least 20% equity. could your guest comment

  • Todd

    “Remember this: Money is never made, it’s just moved around, sort of like a shell game.”
    Posted by Chris

    @ Chris:
    Yes and no.

    In an economic system based on using a currency with intrinsic value, yes; money is (mostly) just moved around.

    In an economic system based on using a fiat currency and fractional-reserve banking, no; money is absolutely made—made out of thin air.

    However, I’d say the shell game part applies to both systems.

  • Ellen Dibble

    One spin-off of the housing bubble is a lack of tending to the rental housing. There is a big plus to living alongside a bunch of other people in the same “boat.” You sit on the porch and discuss all things. You confer if a stranger has hung out, smoked, or slept in the hall. You work together alongside the landlord to make sure the mechanics of living (trash, lawn, leaks, plumbing) are going well. You can devote yourself single-mindedly to your work, and devote your resources single-mindedly to saving for a house or for the business you are starting. It is far better than your family of origin at a certain point in life. You have to be living with all types, all ages, and you can be as close or as far as you choose.
    Our society, house-mad, has forgotten this.

  • frank scott

    Regarding excessive pay, bonuses, etc for financial kingpins, would it be more effective to tax them heavily rather than try to regulate them?

  • Marc Kohler

    Every mprtgage that goes to foreclosure makes money for Credit Default Swap Bonds, For evey dollar foreclosed, a Bond holdrer makes $30-$40. That means a $100,000 foredlosure makes # millions to 4 million dollars. Whe is this not being told.
    Every one should read Janet Morrissey’s article in Time in March 2008. You will see it all.

  • Carol

    Two questions:

    1. Politically, what would have happened to any government official who halted the housing feeding frenzy? Had the Alan Greenspan done anything to slow the craze, would he have been fired?

    2. Are these “bubbles” tolerated by politicians because they create the illusion that the American standard of living is not deteriorating as quickly as it really is?

  • Rob

    Please ask your guest if re-instating
    the ‘Glass-Stiegal Act’ wouldn’t be
    enough to prvent investment banks
    from being ‘too-big-to-fail’, or
    is that not enough in today’s markets?

  • Monica

    How does your guest feel about Obama’s plan to have banks forgive principal via Short Sales of homes? Specifically how do you get banks to reduce principals and therefore realize their losses?

  • JP

    Fannie and Freddie jumped on the bandwagon a became also rans…

    If Fannie and Freddie never existed, however, the same economic plunge would have occurred in the same way… Fannie and Freddie were incidental to the whole mess, having only been one guest served from the party cake.

  • Beth

    I’ve been listening to Tom for years, but I think “tacos and alligators” takes the prize for best call-in comment ever.

  • DARWIN KEICHLINE

    What is being taught in business schools about these methods on Wall Street?

    Hop on board the gravy train or correct abuses?

  • Todd

    I’m SICK of hearing the “WE NEED REGULATION” mantra. We HAVE regulation. The problem is, the regulation we have has been formulated to protect the Wall Street/Banking scam artists.

    Our criminal LAWS are also a form of regulation. At last check, theft by deception is still a criminal offense in the jurisdiction of all 50 states! So, why aren’t the regulation of our laws being enforced?

    Prosecute these Wall Street/Banking criminals for their crimes, instead of bailing them out on our dime!

  • Marc Kohler

    I am sorry fpr the typos in my previous post. If y0u want to get a full explanation of how these probalmes were created by Freidman, Greenspan, and Matin Fieldstein for Senator Gramm when the banking system was destroyed in the new banking laws in 1998-2000. I ahve this conferred buy a citi-bank lawyer who spent forty years finign tax loopholes to avoid taxes by the corporatioon and its officers.
    If you want to see my compklete ideas, y0u can go to progressiveliberaltruths.blogspot.com

    The bad mortagages were plnned to destroy the institution selling them as CDSB. Wriers of these loans got $2,000-$15.000 for each nirtgae, Look up Yeild Spread Premiums(YSP) on Google.

  • Deborah Whalen

    I think that if the government had just taken the bail out money that was paid to big business & paid off everyones debt I think it would have done more for the economy then what was done. I couldn’t have cost much more if any more.

  • Todd

    Lowenstein is full of crap. Yeah Tom, have Lowenstein back again as a guest on the show to discuss the economy; and have Max Kaiser on to debate the issues with him. Lowenstein’s arguments would have more wholes than Swiss cheese after Kaiser was done with ‘em.

  • mjbarr

    I loved it when he referred to there being speed limits on highways.
    Does Roger Lowenstein drive a car?
    How many drivers follow speed limits?

  • JP

    How many “wholes” are in swiss cheese?

  • Todd

    “I think that if the government had just taken the bail out money that was paid to big business & paid off everyones debt I think it would have done more for the economy then what was done. I couldn’t have cost much more if any more.”
    Posted by Deborah Whalen

    You are correct Deborah!!! That could’ve been done for about HALF of what the bail-out cost us.

    However, the Banksters wouldn’t have made double-down profits if it had been done that way. After all, the ulterior intent of the bail-out was to enrich the oligarchy, while bankrupting the nation. Almost all of those bail-out dollars were converted into hard assets immediately after they were disbursed; because the Bankster oligarchy knew that the dollar will soon be worth less than toilet paper. Why do you think Bernanke refused to state exactly where, and to whom, trillions of these bail-out dollars went? Hint, hint: a HUGE amount of the bail-out went offshore to foreign banks.

  • Todd

    “How many “wholes” are in swiss cheese?”
    Posted by JP

    @ JP:
    The whole thing has holes! LOL…Good eye JP! Swiss cheese proof-reading on my part.

  • Rick

    I think that if the government had just taken the bail out money that was paid to big business & paid off everyones debt I think it would have done more for the economy then what was done. I couldn’t have cost much more if any more.”
    Posted by Deborah Whalen

    You are correct Deborah!!! That could’ve been done for about HALF of what the bail-out cost us.

    However, the Banksters wouldn’t have made double-down profits if it had been done that way. After all, the ulterior intent of the bail-out was to enrich the oligarchy, while bankrupting the nation. Almost all of those bail-out dollars were converted into hard assets immediately after they were disbursed; because the Bankster oligarchy knew that the dollar will soon be worth less than toilet paper. Why do you think Bernanke refused to state exactly where, and to whom, trillions of these bail-out dollars went? Hint, hint: a HUGE amount of the bail-out went offshore to foreign banks.

    Posted by Todd, on April 8th, 2010 at 12:19 PM

    But-

    THE BANKS HAVE PAID THE GOVERNMENT BACK ALREADY (WITH VERY HIGH INTEREST/PROFIT) TO THE GOVERNMENT/TAXPAYERS (except for Citibank, partly run by that liberal economic stalwart Bob Rubin).

    When will you all admit that the money LOANED to the banks has actually made a profit for us (the taxpayers).

    Show me another government program that made an actual profit!

    Rick

  • Larry

    THE BANKS HAVE PAID THE GOVERNMENT BACK ALREADY (WITH VERY HIGH INTEREST/PROFIT) TO THE GOVERNMENT/TAXPAYERS (except for Citibank, partly run by that liberal economic stalwart Bob Rubin).

    When will you all admit that the money LOANED to the banks has actually made a profit for us (the taxpayers).

    Show me another government program that made an actual profit!

    Rick
    Posted by Rick

    The TARP money was but a small fraction of the money the banks got. Go to my link above to understand a few more ways they took our money which many many economists have put at 14.2 trillion.

  • Todd

    “THE BANKS HAVE PAID THE GOVERNMENT BACK ALREADY (WITH VERY HIGH INTEREST/PROFIT) TO THE GOVERNMENT/TAXPAYERS (except for Citibank, partly run by that liberal economic stalwart Bob Rubin).

    When will you all admit that the money LOANED to the banks has actually made a profit for us (the taxpayers).

    Show me another government program that made an actual profit!”
    Posted by Rick

    @ Rick:
    And THIS “government program” has NOT made a profit either—for anyone except the Wall Street bankers. Your analysis of the mainstream media report of “profits” need a dose of reality.

    The banks have “repaid” the government with unrealized paper-profits which have been inflated by the use of bogus accounting principles. Essentially, the banks have been allowed to cook the toxic assets on their books, over valuate them, label them a “profit,” and then “repay” the government with them.

    If, as you claim, this bail-out has been so profitable for the government/taxpayers, then I suppose we should promote reckless banking practices in the future, so the people can once again PROFIT from it! Hell, if we continue doing such deals, we should be able to retire the national debt and eliminate all of our taxes, right? We’ll all just live off the fat of our profitable deals with the bankers!
    Since when has any bank ever cut a deal with anyone that hasn’t been for its own profit? Never! This TARP deal wasn’t cut with the Bailey Building & Loan.

    This so-called “profit” is nothing more than shell-game accounting—and that’s the reality.

  • Mark

    Rick Stated: “When will you all admit that the money LOANED to the banks has actually made a profit for us (the taxpayers).

    Show me another government program that made an actual profit!”

    Rick, We’re not even at the top of the hill on the foreclosure front. I work for a major lender and we’re just now ramping up on REO inventory. Remember all those 5/1 ARMs sold in 2005, well, they’re just about to hit.

    So the bankers aren’t nearly out of the woods yet. They’ll be back for more.

  • Larry

    Rick, We’re not even at the top of the hill on the foreclosure front. I work for a major lender and we’re just now ramping up on REO inventory. Remember all those 5/1 ARMs sold in 2005, well, they’re just about to hit.

    So the bankers aren’t nearly out of the woods yet. They’ll be back for more.
    Posted by Mark

    I thought that was what the TALF (god knows I can’t keep all their acronyms straight) program was all about.

    When the banks saw the the government was going to buy the bad securities from them at top dollar they rushed to load up on even more of them!

    In doing so I thought they had moved most of them to the gov. Am I wrong?

  • Rick

    “THE BANKS HAVE PAID THE GOVERNMENT BACK ALREADY (WITH VERY HIGH INTEREST/PROFIT) TO THE GOVERNMENT/TAXPAYERS (except for Citibank, partly run by that liberal economic stalwart Bob Rubin).

    When will you all admit that the money LOANED to the banks has actually made a profit for us (the taxpayers).

    Show me another government program that made an actual profit!”
    Posted by Rick

    @ Rick:
    And THIS “government program” has NOT made a profit either—for anyone except the Wall Street bankers. Your analysis of the mainstream media report of “profits” need a dose of reality.

    The banks have “repaid” the government with unrealized paper-profits which have been inflated by the use of bogus accounting principles. Essentially, the banks have been allowed to cook the toxic assets on their books, over valuate them, label them a “profit,” and then “repay” the government with them.

    If, as you claim, this bail-out has been so profitable for the government/taxpayers, then I suppose we should promote reckless banking practices in the future, so the people can once again PROFIT from it! Hell, if we continue doing such deals, we should be able to retire the national debt and eliminate all of our taxes, right? We’ll all just live off the fat of our profitable deals with the bankers!
    Since when has any bank ever cut a deal with anyone that hasn’t been for its own profit? Never! This TARP deal wasn’t cut with the Bailey Building & Loan.

    This so-called “profit” is nothing more than shell-game accounting—and that’s the reality.

    Posted by Todd, on April 8th, 2010 at 2:40 PM

    Todd-

    The US government still holds several billion in Citi shares (which it has already filed plans to sell on the open market for CASH).

    Banks such as JP Morgan, Bank of America, Morgan Stanley, Goldman Sachs, and others have already repaid ALL TARP funds received with CASH (again PLUS high yield interest/dividend payments in the range of 8+% IIIR).

    Check your facts before you make ‘unrealized paper profit’ unfounded statements.

    Now, TARP will probably net a loss, primarily due to the Pro-Union bias of the auto bailout of GM and Chrysler (though GM, with less union ownership is reportedly making plans to repay its portion- not much from the UAW owners of Chrysler yet).

    Rick

  • http://www.beccar.wordpress.com Eugenia Renskoff

    Hello, Tom, All I can say is this: If Wall Street can still make big profits, then there should be justice (as in recovering our money) for those of us who have lost our home to mortgage fraud and foreclosure. And the banks–all of them–should stop looking at customers as just another number. They have to learn once and for all that without customers they cannot do business. In other words, they need us even more than we need them. Eugenia Renskoff

  • Alex

    “All I can say is this: If Wall Street can still make big profits, then there should be justice (as in recovering our money) for those of us who have lost our home to mortgage fraud and foreclosure.”

    What about justice for those of us who rented, saved and lost savings? Or for those of us who has kept paying their mortgages and credit cards right on time?

    If you are a victim of fraud the court system is available to you.

  • Alex

    What would it take for us to realize that we are not living in the 18th century when Adam Smith was writing his “Wealth of Nations?” He did not know what credit default swap is. Nowadays, the invisible hand can hurt the rest of us pretty badly.

  • http://progressiveliberaltruths.blogspot.com Marc Kohler

    Hi Again:

    Here is a better link to my blog: Progressive Liberal Truths:

    http://www.progressiveliberaltruths.blogspot.com

    Look at your newspaper today. Look at the lists of Foreclosures, and know that somone is making $30 to $40 for each and every dollar foreclosed. As my friend from CitiBank said, the bonuses you are hearing so much about are not bonuses, they are the guarenteed and insured Credit Default Swap Bonds payments, that no -one wants to explain or stop this is a tragedy for all of us. Credit Default Swap Bonds are intended to desrtroy the company that writes then, following the ket priniciple of Objectism(Ayn Rand’s koo koo ideas) which Greenspan and others are still defending. For them, there is no philosaphilcal reason for the United States to exist. If their hoarding 75 trillion dollars(The current estimate of CDSB payments since 1998) destroys our economy, it does not matter–their country is the country of GREAT WEALTH. Anyone else can get in a soup line.

  • Todd

    @ Rick:
    Repaid in CASH huh? Ah yes, the same fiat cash, created out of thin air, that got us into this mess to begin with. And when can we taxpayers expect to receive our share of those “profits” Rick? Check is in the mail, right?

    As investment advisor Mike Shedlock recently put it:

    “The idea that there are “profits” is fictitious. It’s effectively praising making 10 cents on a dollar while not counting hundreds of $billions lost on AIG and Fannie Mae, and ignoring $300 billion worth of loan guarantees at Citigroup still in effect.

    Moreover, the only reason banks were able to show a profit and pay back TARP loans is mark-to-market rules were delayed further and banks did not have to bring hundreds of billions of dollars in off balance sheet SIVs back on to bank balance sheets.”

    ‘Nuff said.

  • Steve V

    Could have been…should have been….might have been….in hindsight……perhaps we should…. yes we should….no we haven’t…….etc, etc, ect……this (financial “crisis”) hasn’t yet caused enough suffering. The wheels will literally have to fall off this wagon before people get upset enough to demand real change. Of course by that time it will be to late.

  • Rick

    @ Rick:
    Repaid in CASH huh? Ah yes, the same fiat cash, created out of thin air, that got us into this mess to begin with. And when can we taxpayers expect to receive our share of those “profits” Rick? Check is in the mail, right?

    As investment advisor Mike Shedlock recently put it:

    “The idea that there are “profits” is fictitious. It’s effectively praising making 10 cents on a dollar while not counting hundreds of $billions lost on AIG and Fannie Mae, and ignoring $300 billion worth of loan guarantees at Citigroup still in effect.

    Moreover, the only reason banks were able to show a profit and pay back TARP loans is mark-to-market rules were delayed further and banks did not have to bring hundreds of billions of dollars in off balance sheet SIVs back on to bank balance sheets.”

    ‘Nuff said.

    Todd-

    First off, the banks’ checks have already cleared. We won’t see a penny of the repayment or profit due to congress’s and the administrations’ (current AND past) inability to say no to any kind of spending program which might buy them another 2/4/6 years sucking on the US government teat,and the self aggrandizement of being in power.

    We are ultimately at fault for not voting out the profligate spenders..

    But the banks’ TARP funds have been paid back with real $$s.

    That being said,Shedlock is a pretty well out there on a number of subjects, and hardly a mainstream or highly referenced author/commentator (witness many other’s comments regarding his gold/inflation opinions), and seems like the classic ‘short’ who probably made boatloads of $$s talking down the bank stocks in ’08. (Don’t get me started on contributions of short sellers to the meltdown).

    The whole issue of ‘mark to market’ is a different kettle of fish, which is a construct of the accountants which has many weaknesses (i.e. is it appropriate to call a mortgage worthless since it cannot be sold TODAY, while the property backing it up could be easily sold in a few days for 70% of the value?), and may bear as much responsibility for the whole economic meltdown, as any individual decision by any individual bank.

    Everybody looks for a villain/scapegoat to blame and make pay for problems for which they may bear some, but not all responsibility, and looks for government (read others, not ME) to make right, but refuses to make tough choices which may cause them to make any personal sacrifices themselves, feeling they have already paid/lost/hurt/… enough themselves.

  • loninappleton

    Without using too many canards, Wall Street is what you make it. You diminish it in power if you defund it. Defunding can be done by forming State banks to deposit pension funds, personal savings etc.

    Until and unless investors admit to culpability and complicity and remove the feeding tube for these abuses, nothing will happen.

    John Nicols is writing on this issue repeatedly for the Capitol Times (Madison, WI) and The Nation. State banks with Dakota as an example (in existence since 1919) were created by the Progressive movement against the robber barons after the so-called Gilded Age.

    Anything less than defunding Wall Street is just blather.

  • Tim

    “But the banks’ TARP funds have been paid back with real $$s.”

    Just like the Fed Government is on the hook for Trillions of $$ of these toxic Assets still on the banks books, not to mention the implicit guarantee that makes it cheaper and easier to borrow money for the banks by the Fed Government, or how Citi converted Preferred stock to common of taxpayers money

    “Everybody looks for a villain/scapegoat to blame and make pay for problems for which they may bear some, but not all responsibility, and looks for government (read others, not ME) to make right, but refuses to make tough choices which may cause them to make any personal sacrifices themselves, feeling they have already paid/lost/hurt/… enough themselves.”

    Is this not what Wall Street, CEO’s, Brokers are doing, Republicans as well, We’re is the personal responsibility of these folks?

    It wasn’t the CEO of the company fault cause they had to much risk, it was unforeseen that having a 20, 30, to 1 leverage could be a bad thing, It was not the banks fault for selling one thing to the clients, than betting against them, holding insurances(oops i meant credit default swaps cause insurance is regulated and money as to be held in cause something bad happens) on something they did not even own. Or it was not the brokers fault in selling loans they told people they could afford, it was the people fault when the variable rates sky rocketed. OR Fox News and Many Republicans blaming the poor for the whole crash, which to anyone working in anything dealing with wall street is absurd.

    The Investment bank I work for took the money from the Fed Government, Outsourced a boatload of work and jobs to India, lower prices at first to knock off some competition, than raised prices on pension funds and anything muni’s, fired a few thousand people, paid out bonus, instead of December we got ours in Feb, had a big meeting on how great we did with the stress test and how some of our competitor (who got no to very little government aid) were falling behind and we were taking some of their market share, in the meeting we had right before the government announce possibly pay cuts for CEO we paid the money back. Yet still able to used (if needed) the government .25 interest window enabling my company to borrow money cheap and still do. We also were told we are back in business and to proceed as we did before the downturn.

  • http://wbur.org Kathyah

    People need to educate themselves on basics of finance and debt. People today do not know how to balance a checkbook. People today do not know how to read and, more importantly, understand the terms and conditions of all paperwork at any (home) closing. A lot of this is basic secondary education. Personal accountability in this world is sorely lacking. This is ‘main street’

    Wall Street – greed left unfettered gets us where we are today. The gap between rich & poor may be so great by now that it cannot be narrowed. Politicians have been and are beholden to corporate america, so they are in the wall street team.

  • Mark S.

    I just finished “The Big Short” by Michael Lewis. It is now clearer than ever to me that the economy, at least the financial services sector, is a huge smoke and mirrors machine that is founded on valueless abstractions with no connection to reality. If I created a derivative instrument tagged to a bet about which one of three turds in the toilet would exit first upon flushing, I could sell them to some idiot who would only turn around and hedge the bet by purchasing a credit default swap from AIG or some other den of retards (sorry, Sarah).

    As to the evil, irresponsible Americans who took all those subprime loans … well, the entire Wall Street fantasy machine was contingent on finding more and more marks to take their vicious, deceptive, adjustable-rate mortgages so they could “securitize” the turds and sell them to other institutions through the pimps otherwise known as mortgage bond traders.

    The whole system is rotten to the core, and the Obama Administration is doing nothing substantive to address it, thus setting us up for the next collapse. In a word, it stinks.

  • Nathan

    I blame Obama. He should be putting this people in jail or clawing back their ill-gotten gains, but no; he’d rather just take their money for election campaigns. He just blows.

  • Jack

    Sometime I hope you get the authors Chain of Blame by Paul Muolo & Mathew Padilla and Roger Lowenstein together to discuss the real estate, mortgage and finance bubble.

    Ask them to comment on the private privileged extremist conservatives who want to drown the government in anarchy along with the public and private enterprise. How can the market work with the imperfectability of men and women who fail to see deregulation create lawless opaque trading instead of transparent trading.

    How can bankers grant a 30 year mortgage when workers face career changes every 5-10 years. How can someone in their 30’s know what the economy is going to be in their 40’s and 50’s? Will their company by reorganized, downsized, or out sourced. Will they then be able to afford retraining even in their late 50s and 60s?

    Let’s hear more about the compensation committees who thought themselves sports lawyers, who lack the patriotic value of social responsibility, and fail to oversee the stewardship of the national economy. Are executives really worth 300 times the pay of the lowest non temp, part time employee? Doesn’t the consumer economy make us all public stakeholders? By way how much of a drag on consumers is the high cost of sports tickets or cable TV fees to see their teams or the expensive team logo clothes?

  • Mark

    That’s what needs to change. More people need to have a clue about wallstreet so we don’t get screwed by what we don’t know.

  • Elizabeth

    Apologies?!? Is that what those were? How can extraordinarily well paid, and supposedly well educated men claim that they had no way of knowing about the impending financial crash?! So many of us knew that there was no way that the price of houses could continue to climb, and that people would be able to pay on those kinds of mortgages. Everyone was making money so no one cared. And now that same industry is buying Congresses silence – and we are letting them!

  • Scott T.

    Great program, great guest! Well done!

  • zack

    Tom Ashbrooke,
    For God’s sake, please have Tom Woods back on to refute Lowenstein’s propaganda suggesting that “smarter” regulation is a panacea. Woods wrote the recent bestseller “Meltdown”, which thoroughly explains how the banking/government industrial complex blew up the bubble and then soaked the taxpayers for bailouts. Wall Street got drunk, but the government poured the liquor in the form of cheap money from the Federal Reserve and endless bailout backstops.

    A free market only works when there’s a real risk of failure. The government removed that risk from the banks and put it on the taxpayer. More regulation will only be used to create more moral hazard and encourage the next bailout. Barney Frank recently tried to insert an amendment into the financial “reform” legislation to allow the Fed to bailout banks to the tune of $4 trillion when the next crisis comes.
    http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114×74153
    What a joke! We are living in a kleptocracy – with the GOP and the Democratic leadership completely in the thrall of the banks.

  • zack

    I nearly fell out of my chair when Lowenstein said that “since we the public/government cannot escape the bailout cost, we have to prevent the next one”. Translation – he WANTS us to keep bailing out the banks and keep this corrupt system going. UNBELIEVABLE!!!! The only acceptable answer is no more bailouts – PERIOD! Let these scumbag bankers risk their own money – do NOT make me a bailout slave subsidizing Maseratis for bankers.

  • http://www.pricebonus.com/ Amy

    I blame Obama. He should be putting this people in jail or clawing back their ill-gotten gains, but no; he’d rather just take their money for election campaigns. He just blows.

  • http://www.pricebonus.com/ Amy

    I nearly fell out of my chair when Lowenstein said that “since we the public/government cannot escape the bailout cost, we have to prevent the next one”. Translation – he WANTS us to keep bailing out the banks and keep this corrupt system going. UNBELIEVABLE!!!! The only acceptable answer is no more bailouts – PERIOD! Let these scumbag bankers risk their own money – do NOT make me a bailout slave subsidizing Maseratis for bankers.

ONPOINT
TODAY
Jul 28, 2014
This June 4, 2014 photo shows a Walgreens retail store in Boston. Walgreen Co. _ which bills itself as “America’s premier pharmacy” _ is among many companies considering combining operations with foreign businesses to trim their tax bills. (AP)

American companies bailing out on America. They call it inversion. Is it desertion?

Jul 28, 2014
U.S. Secretary of War Newton D. Baker watches as wounded American soldiers arrive at an American hospital near the front during World War I. (AP Photo)

Marking the one hundredth anniversary of the start of World War One. We’ll look at lessons learned and our uneasy peace right now.

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