On May 22, 2009 Governor Arnold Schwarzenegger quoted in Time
"I understand that these cuts are very painful and they affect real lives. This is the harsh reality and the reality that we face. Sacramento is not Washington -- we cannot print our own money. We can only spend what we have."
Why not? Private banks do it all the time and its legal. According to the Federal Reserve Bank of Dallas
Banks actually create money when they lend it.
According to Huffington Post there is a State owned bank that has been doing this since 1919.
I tried to add something profound .....but you know ... this shit writes itself.
Stephen Friedman, the chairman of the New York Federal Reserve Board, abruptly resigned on Thursday, days after questions arose about his ties to Goldman Sachs.
Mr. Friedman was chairman of the New York Fed at the same time he was a member of Goldman’s board. He also had a substantial stake in the firm as the Fed was crafting a solution to keep Wall Street banks afloat. Denis M. Hughes, deputy chair of the board, will take over as the interim chairman, the New York Fed said in a statement. (Read Mr. Friedman’s letter after the jump.)
Because the New York Fed approved a request by Goldman to become a bank holding company, the chairman’s involvement in Goldman was a violation of Fed policy, The Wall Street Journal said in an article earlier this week.
Deep Throat: "No, I have to do this my way. You tell me what you know, and I'll confirm. I'll keep you in the right direction if I can, but that's all. Just... follow the money".
The trail of money will usually confirm where a crime has been, or is about to be, committed.
the state will suspend business with Bank of America Corp. until the lender restores credit to the shuttered Republic Windows & Doors company in Chicago where workers are staging a sit-in.
Having crossed BofA the next day his scandal broke (midtowng posted a very good article on this)
Who is the bankers bank? The Federal Reserve. And who is the latest person to cross the bankers bank? Ken Lewis.
It was surely a surprise when the WSJ hired Thomas Frank to write an opinion column. Anyone who has read either of his bestsellers, What's The Matter With Kansas? or The Wrecking Crew understands that his view of American politics just doesn't fit in with the other editorial page writers there. I, for one, am very happy he is writing there and his column today should be required reading for every citizen who cares about the future of this country.
Why Congress Won't Investigate Wall Street
Republicans and Democrats would find themselves in the hot seat.
"[I]t remains tempting to pour additional funds into large firms in hopes of a turnaround,” {Kansas City Fed Chief Thomas] Hoenig said today in remarks prepared for a hearing of Congress’s Joint Economic Committee in Washington. Yet efforts “to protect our largest institutions from failure risk prolonging the crisis and increasing its cost.”
....
Hoenig said “we must maintain limits on financial leverage through strict rules setting minimum capital-to-asset ratios” to avoid risks of excessive leverage at financial companies.
Hoenig reiterated his view that the government, rather than prop up failing financial institutions, should temporarily take them over and wind them down. Speaking April 9 in Tulsa, Oklahoma, he said calling an institution “too big to fail” is a “misstatement.”
It appears (finally) Congress might step in on those exorbitant overdraft and over the limit fees that the banks like to call Protection.
Did you know banks automatically enroll you in their Protection schemes which instead of plain bouncing the check, provide you with a loan which comes with hefty, hefty fees? Anyone else reminded of a movie scene when mobsters shake down the neighborhood for protection money?
It appears two Democrats in the house have introduced a bill, Consumer Overdraft Protection Fair Practices Act
Consumers would have to "opt-in" to overdraft protection programs and banks would be required to inform consumers when they are about to overdraw their accounts."
Banks holding volatile deposits gathered by third parties may be charged higher premiums to bolster the fund used to insure deposits at failed banks, the head of the Federal Deposit Insurance Corp said on Friday.
The Economist has a new article out, End of Illusions. It goes over the history of Freddie Mac/Fannie Mae, how they operate and is implying the US financial system is a house of cards. (or in this case, Turtles propping up the world analogy, sorry Hindus!)
They (Freddie Mac, Fannie Mae) were set up (see article) to provide liquidity for the housing market by buying mortgages from the banks. They repackaged these loans and used them as collateral for bonds called mortgage-backed securities; they guaranteed buyers of those securities against default.
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