pkarnig’s posthaven

The Federal Reserve is about to create $600 billion out of thin air. It's a huge,  experimental stimulus program that will affect stock markets and government policies around the world.

But the Fed announced its plan in a statement written largely in jargon and code. So here, from Planet Money and Slate, is today's statement, translated into plain English

My comment is a question: "Doesn't it seem quite clear that the Geniuses at the head of the Fed are clueless?" We need a new approach. Here's an idea: "Instead of destroying our currency, let's stop helping banks without condition. Let's demand that they modify most of the toxic loans so homeowners can remain in their houses and the market can slowly right itself. After all, it was the fraudulent bubble building tactics perpetrated by the banks that led to the problem in the first place".

Now the bank may be on the verge of trouble again. Its stock has fallen 41 percent since April 15. Mortgage-bond investors are demanding untold billions of dollars in refunds. The foreclosure fiasco is metastasizing. A member of the Troubled Asset Relief Program’s oversight panel, AFL-CIO attorney Damon Silvers, openly worried at a hearing last week about the risk that Bank of America might need another bailout.

A few more months like the last one, and we may be wishing Bank of America had never returned its $45 billion of TARP money.

BofA makes money servicing large toxic mortgages while their fraudulent sales and foreclosure practices go unregulated in spite of all the facts that are mounting up that clearly demonstrate that they have broken laws. Hold these Robber Barons accountable. This is the only way the public will start to build trust in systems again.

Indeed, progressives are urging him to seize the opportunity to take a more muscular approach with his executive powers, starting by getting much tougher on banks. They also hope Obama will use his regulatory authority, his enforcement powers, and his prerogatives as commander in chief to make decisive moves that can't be sabotaged by Congressional Republicans.

The basic message: So much for the prime minister routine, it's time to act like a president.

"The most important thing the president has to communicate is strength," said Neera Tanden, a top official at the Center for American Progress. "One of the lessons of history is that the president stands apart from Congress... He has to think about ways he can lead the country without his fate being tied to the Hill."

"There's tons of things that can be done," said Damon Silvers, policy director of the AFL-CIO. "The administration has a vast capacity to act to improve the lives of ordinary Americans, regardless of what happens in Congress."

Mr. President stop being such a wus, get off your compromising ass and kick some progressive butt! This is the ONLY way you will ever get re-elected and hold the support of progressives that put you in office. Step one, listen to William K. Black. Put BofA into receivership and prosecute their fraudulent asses! Show the american people who's boss or get out of the way.

"I'd do it again to save lives," Bush, who refused to call the interrogation technique "torture" during his presidency, said at a forum earlier this year. He repeats this willingness to use the procedure and maintains that it isn't torture in his book, according to the Post.

He should be prosecuted. What do people think of this?

When it comes to helping Wall Street and corporate America, the Federal Reserve spares no expense.

It expanded its authority and bailed out securities and insurance firms. It tethered the main interest rate to zero. It more than doubled its balance sheet to $2.3 trillion by purchasing mortgage-linked securities and U.S. government debt. To arrest the free-falling economy and jolt it back to life, the nation's central bank has engaged in an unprecedented campaign to ensure banks have cash and corporations access to credit.

That part of the Fed's plan has worked. The economy is progressing through a slow, though not entirely visible, recovery. Employers are gradually adding workers to their payrolls. Industrial production is rising, as is personal consumption. The economy is slowly growing.

The problem is that the Fed's actions have served to help just a small, but powerful, constituency: Wall Street, and the firms that do the most business on it.

The rising tide the Fed ushered in with hopes that it would lift all boats hasn't materialized. Now, on the verge of another round of asset purchases and other steps in order to further bring down the cost of credit, questions are being raised over just who, exactly, the Fed would help.

This won't do. Providing more free money to the biggest banks will only further drive consolidation and the creation of even bigger too big to fail banks. Neither will it help the man on the street that needs help with his mortgage. The Fed should subsidize the pay down of mortgages to boost the housing market now!

Excellent segment from last night's broadcast that includes a battle between Bill Gates Sr., and Microsoft CEO Steve Ballmer, plus some brutally honest deficit commentary from former Reagan budget director David Stockman who lights up both parties for tax and spending madness.

Watch at least the first few minutes.  Stockman starts out hot.

Stockman tells it like it is. We need to end tax breaks.

Another conflict occurs when the bank that services a primary mortgage is also the owner of a second lien on the same property. Resolving a troubled first mortgage generally requires a write-down of the second lien, a step that banks have been loath to take.

Banks also profit from late fees and other default-related charges assessed on borrowers. And there is an additional incentive to pile on charges, since the bigger the loan balance, the higher the fee to manage the loan. A group of prominent investors — including Freddie Mac, the Federal Reserve Bank of New York and Pimco, the world’s largest bond fund — recently accused Bank of America of fee-padding. The bank denies wrongdoing.

High default charges harm homeowners because they make it increasingly difficult to catch up on late payments and avoid foreclosure. They also disadvantage investors, because the servicer collects the charges from the foreclosure sale before the investors see any money. Everyone loses, except the bank.

Mr. Bernanke said that the regulators’ findings would be released in November. What is also needed is real enforcement — and new rules and possibly new laws — to make banks change their ways.

There is already so much public information about the fraudulent practices that the banks have been caught with, it makes me wonder what more they could possibly need to prosecute the banks for all of the issues that have already been made public. I want to know what is taking them so long? What so you think?