A Decade of Armageddon
New Geography essays
The hardback is a limited edition of 100 copies, signed by the author. Every copy sold will include a US$5 donation to the Diane Fossey Foundation
A selection of articles and essays written for the New Geographic covering a decade of financial turmoil.
With a foreword from Joel Kotkin, editor of NewGeography.com
These essays by Dr Susanne Trimbath, were first published in New Geography 2008-2015. These have been edited to be read as a free-standing publication, grouped together into the following chapters:
1. Bailouts
Why there were bailouts in 2008-9 for Wall Street and not for Main Street? This chapter includes articles on who got the money and how the true cost, which was to be borne by US taxpayers, was hard to calculate and often purposefully hidden from public view.
2. Congressional Hearings and Legislation
Once the full-blown global financial crisis hit, the response included tens of thousands of pages of new rules, regulations and regulators in the space of about three years. Also, the US government assumed ownership and operation of AIG. This was the first “taking” since 1989 and was followed by Washington Mutual in September 2008 and W Holding’s Westernbank in April 2010.
3. Homeowners and Mortgages
The housing market, in the years leading up to the financial crisis and the Great Recession, had been treated like gold – not that “houses are as good as gold” but that people were treating houses AS IF they were an investment and not a place to live.
4. Federal Reserve and Treasury Actions
In 2009, Treasury Secretary Timothy Geithner presented a proposal for legislation that would give the secretary the authority to make the final determination that a financial institution on the verge of default – regulation by revolution. Geithner’s proposal would let the federal government nationalize a ‘too big to fail’ company.
5. Bank/Broker Behavior
The actions of financial industry professionals led to the financial crisis that developed into the Great Recession. Criminal charges were brought against those who cheated their way into getting a share of the bailout money, but many of those responsible for creating the situation were paid elaborate bonuses at the same time their financial institutions were receiving bailout funds.
6. Systemic Issues
This chapter on Systemic Issues goes into detail about topics that are widely misunderstood by the non-financial public: financial innovations were supposed to democratize capital by making it easier to fund less-popular projects, both public and private. Like many inventions, it was abused for the enrichment of a few.
7. Public Reaction
Public reaction in the United States to the revelations of the Wall Street bailout was subdued. A Landmark Narrative developed and was generally accepted by Americans: people bought houses they couldn’t afford by using adjustable-rate mortgages, no-money-down and other schemes offered by banks. When the favorable terms ran out those homebuyers stopped paying their mortgages; they caused their mortgage bank to slide toward bankruptcy, and caused all those “sliced-and-diced” mortgage-backed bonds to fail, too.
My wish is that I have opened your eyes to the false utopia being offered by Wall Street and the businesses and governments they support. Dr Susanne Trimbath
SHOULD WE BAILOUT GEITHNER TOO?. 8
DIGGING INTO AIG BONUSES AND OTHER AID RECIPIENTS. 13
THE CONTINUING DEBATE ON AIG.. 15
LAYOUT FOR THE BAILOUT: $3.8 TRILLION AND COUNTING.. 16
MORTGAGE-BACKED SECURITIES: 1/3 NOT BACKED! 17
$12.8 TRILLION COMMITTED TO BAILOUT. 19
NO BAILOUT OF SMALL BUSINESSES. 21
FOLLOW THE MONEY: SPECIAL INSPECTOR GENERAL FOR THE BAILOUT. 24
MORE MONEY FOR BAILOUT CEOS. 27
SUPPRESSING THE NEWS: THE REAL COST OF THE WALL STREET BAILOUT. 29
THIS PERP WALK NEEDS HANDCUFFS. 33
FINANCIAL REFORM OR CON GAME?. 36
DEBT CEILING OR SPENDING LIMIT?. 39
THIS IS YOUR GOVERNMENT ON CRACK.. 40
OUR FEDERAL GOVERNMENT: “THERE YOU GO AGAIN!”. 44
LOBBYING PAYS OFF 500-TO-1. 45
SURPRISE! FOR FISCALLY RESPONSIBLE, HOUSING REMAINS GOOD AS GOLD.. 47
A HOUSING BOOM, BUT FOR WHOM?. 52
RESPONSIBLE HOME BUYERS, WHY BE FRUGAL?. 58
HOUSING BAIL OUT PART DEUX: JUST ANOTHER FINANCIAL CON JOB. 60
WHY HOMEOWNERSHIP IS FALLING – DESPITE LOWER PRICES: LOOK TO THE JOB MARKET. 62
WANT TO FORECLOSE? SHOW ME THE PAPER! 64
MANY INVESTORS HAVE MORE TO GAIN BY LETTING YOUR MORTGAGE OR COMPANY FAIL. 65
ONE HOMEOWNER, TWO MORTGAGE HOLDERS, NO LIEN! 66
FOOL ME ONCE, GEITHNER, SHAME ON YOU, FOOL ME TWICE... 68
BERNANKE: JUNKMEISTER HIDES THE TRUTH.. 71
JUNK BY ANY OTHER NAME WOULD SMELL. 73
GEITHNER IS WALL STREET’S LAPDOG.. 75
GEITHNER’S REFORMS: MORE POWER TO THE CENTER MAY APPEAL TO EUROPEANS, BUT WON’T WORK FOR US. 76
GEITHNER’S TOXIC RECYCLING PLAN NIXED BY BIG FUND.. 79
GEITHNER’S COLLUSIVE CAPITALISM... 82
BERNANKE: FOR GOOD OR FOR ILL. 83
BUFFETT AND PAULSON: PART OF THE PROBLEM... 84
BLAME WALL STREET’S PHANTOM BONDS FOR THE CREDIT CRISIS. 89
THE PLEASURE OF THEIR COMPANY.. 94
STORY OF THE FINANCIAL CRISIS: BURNIN’ DOWN THE HOUSE WITH GOOD INTENTIONS AND LOTS OF GREED.. 96
BURNIN’ DOWN THE HOUSE! PART TWO: WALL STREET HAS A WEENIE ROAST WITH YOUR 401K.. 98
TARP CRIMINAL CHARGES POSSIBLE. 100
HOW SOON WE FORGET: WALL STREET WAGES. 101
BETTING AGAINST THE USA – TOLD YA’ SO! 102
HONEST SERVICES FROM BANKERS? INCREASINGLY NOT LIKELY.. 104
GOLDMAN’S GUNSLINGERS: 401K + 9MM = 666?. 108
RANDOM WALL STREET WALKING.. 109
GOLDMAN’S FAILURE TO DISCLOSE. 110
GOLDMAN PROFITED FROM CRISIS – SHOCKING! 111
FINANCIAL INNOVATION: WALL STREET’S FALSE UTOPIA.. 113
SOLVING THE FINANCIAL CRISIS: LOOKING BEYOND SIMPLE SOLUTIONS. 115
PHANTOM BONDS UPDATE: THE NEW TREASURY BOND OWNER’S MANUAL. 118
WE SNEEZED, THEY GOT PNEUMONIA.. 121
US BUFFETT UPDATE: DOWNGRADE FROM ORACLE TO SEER?. 124
BUFFETT’S PARTNER AGREES WITH US. 125
OH, CANADA? A SAFE-HAVEN FOR BANKING INVESTMENTS. 126
THE NEXT GLOBAL FINANCIAL CRISIS: PUBLIC DEBT. 127
OVER-CHARGED AND UNDER-STIMULATED.. 132
FINANCIAL CRISIS: TOO LATE TO CHANGE?. 133
THE FINANCIAL CRISIS CONTINUES TO BE AN INSIDE JOB. 135
THE NEXT PUBLIC DEBT CRISIS HAS ARRIVED.. 137
HIGH FREQUENCY TRADING IS NOT FAST ENOUGH.. 145
10 STEPS TO FINANCIAL SYSTEM STABILITY: LESSONS NOT LEARNED.. 146
THE INCOMPETENCE HYPOTHESIS TO EXPLAIN THE GREAT RECESSION.. 156
MCCLATCHY-MEDILL: REAL $TIMULATING NEWS. 160