Long Wave Theory Blog

Professor advises underwater homeowners to walk away from mortgages — latimes.com.

Quite a scathing report.

The Critical Unraveling of U.S. Society | The Public Record .

Oh I wish this got more press.

Robert Reich: Obama, China, and Wishful Thinking About American Jobs.

The Glide Path Option | The Big Picture.

Nice summary of the various ways to deal with the crisis…though I disagree with his conclusion.  Yes, we’ll find a glide path but it won’t be enough, then the whole system will crash and we’ll have to start over.

This is priceless…and right on

RCM: As you are well aware, Goldman Sachs (GS) now has a serious PR headache on its hands with reports of $16 billion in bonuses in the pipeline. There’s widespread anger that Goldman has been milking the system and profiting from a sort of incestuous, government-subsidized, “heads I win, tails you lose” paradigm-that the firm has profited off the taxpayer’s dime after being rescued by Uncle Sam. Do you think the public outrage toward Goldman is justified?

Gasparino: Absolutely. Now I’m not in the Goldman is the center of all evil camp. But I know a lot of really smart people who believe that Goldman’s bankers and traders virtually control the federal government in order to advance their own notorious agenda.

In fact, as I show in The Sellout, there were far worse players whose risk taking led to last year’s meltdown, starting with Merrill Lynch and Citigroup (C). They were equally powerful from a policy making standpoint.

Remember, after Robert Rubin fought to end Glass-Steagall’s separation of investment and commercial banking, he didn’t go back to his old firm, Goldman Sachs, he went to work for the firm that benefited the most from the law’s demise, Citigroup.

But Goldman in many ways crystallizes all that is wrong with the financial bailout, started by the Bush Administration, but carried on and expanded by Obama’s. Goldman has been declared a bank, not much different than the old Bailey Building and Loan, and yet they don’t take deposits or offer checking accounts. So what do they do? They trade, and they are trading as a federally protected bank, meaning they get to borrow at cheaper rates and they are Too Big To Fail.

How anyone considering themselves to be a capitalist can support this arrangement is beyond me.

Charlie Gasparino: Another Crash ‘Has to Happen Again’ — Seeking Alpha.

What an amazing essay.  Yes, folks, the fundamentals of the American capitalist system have changed and the middle class will suffer mightily.

Jesse’s Café Américain: Charles Walters: New Wealth and the Productive Economy.

Jesse’s Café Américain: Preparing for the Next Crash and Unexpected Consequences: Now Is the Time.

What an amazing chart.

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Les Leopold: Why Billionaires Should Pay for the Jobless Recovery.

Financial Armageddon: Bad C’s.