The Warren Report and the Magic Bullet Theory
First, we know that some bullets do have magical properties, and
the magic bullet known as TARP... -wait... a
thousand pardons- I failed to mention that I meant this Warren Report from the Congressional Oversight Panel
chaired by Elizabeth Warren analyzing the economic
recovery plans, six months in. No doubt, I will still be called a conspiracy
kook (when I'm just a regular kook) by those who seem to believe in men,
particularly Wall Street men appointed to police the Wall Street mess, not
government accountability. But this
report, clearly, as Mike Whitney shows, rejects the whole direction of the bailout based on
history and expert economic opinion and theory. It also lays out some of what
the government is doing ($4 trillion thrown at the "Street" already) that does
not make A1 or get aired in pieces like this
CNN report (compare the
reporting on these two).
Liquidation, conservatorship and government subsidization; these are the three ways to fix the banking system. There is no fourth way. Geithner's plan is not a plan at all; it's mumbo-jumbo dignified with an acronym; PPIP. [snip] Geithner is clearly the wrong man for the job. His PPIP is nothing more than a stealth ripoff of public funds which uses confusing rules and guidelines to conceal the true objective, which is to shift toxic garbage onto the public's balance sheet while recapitalizing bankrupt financial institutions.
I'm an avid fan of clever - but cleverness when used to weave subtext and masque the intent of the message comes across instead as confusing.
Now the name: DonKey is cute. A 5 on the clever scale. Your title and opening gambit again, clever but from then on (in my opinion) it's just another of the same blather as so many others...
But please 'clearly' (quoting you) tell me why I should care what Mike Whitney opines? What else ya got? And I didn't even hit the link to CNN because they are not known for factual substance, (but at least I know their credentials such as they are).
One cited source's presumptions/assertions either way does not a case make for a valid basis to substantiate any claim.
I reviewed some of your previous posts and you are a master at giving and taking away - clarity of intent seems not to be your forte, but oh yes, clever by half.
Perhaps because it's late and I'm tired - but probably it's I'm just so done with those who posture and pontificate merely on the back of one source's supposition/presumption. It doesn't make the post viable or the author perceived as smart or savvy and certainly doesn't validate the stance of the post.
This isn't about being a liberal or conservative anymore than it is about being pro or anti Obama. It's about citing credible multiple resources - even opposing positions for balance; citing credentials as well as fact based documentation when taking on a topic such as this.
I will close not with a clever line but with the hope that the next time you post, both of us will be the better for it. Until then............
April 13, 2009 3:39 AM | Reply | Permalink
Given this is a general post, I wouldn’t really disagree with much of what you opine, Aunt Sam. I was half asleep when I posted it and should have filled it out or not posted. (AA below links to some alternative sources). I actually thought I'd held the posturing and pontificating to a minimum, but I'll do better next time :( Until there are real investigations and objective analyses like this about the biggest crisis in generations, pontificating will prevail.
First, AA is right that I wrote this in response to several slams by Jon Taplin about lefty “libertarians hiding as progressives” conspiracy nuts that dare to criticize the government (or rather Obama). He also talks of citizen activism and I think getting as clear a picture of an issue as possible is central to that.
The Whitney link is more an explication of the report using direct quotes more than opining, but I did put it below the fold for those who didn’t want to read further. If anything, the CNN piece could be labeled “opining” for its obfuscation (it was just an example of the media in general on this).
The post was about a report from the COP, an oversight committee of highly regarded experts, which comes out every month, yet is all but ignored. This is probably the most expert government opinion we’re likely to get right now outside of admin talking points. If you don’t want to hear it, I understand, but don’t see why you’d bother to comment.
Though I don’t think it needs explaining, I just wanted to get this report out. Rather than write a long tome, thought I might generate and join in discussion of the report. I started to add some of the congressional hearings, too, but cut it short. I post here less than once a year it seems. I’d been waiting to see if someone would bring this up and had not seen it, so I put it up. It has nothing to do with being clever or with me, personally. My bad. Sorry for talking politics here at TPM, but it being Easter, I didn’t think the Jesus jokes would go over well (I kid). The “clearly” refers to the report, not Whitney, but I linked on the wrong words (“this report”)- I assume I’ll be hearing from your lawyers :)
April 13, 2009 10:33 AM | Reply | Permalink
Don Key has been here a very long time, I'm familiar with his/her work and it has always been substantial and valuable.
As to this blog entry, I think the title is not only clever, but really funny and pretty well sums up exactly what's happening - for people who understand the cultural reference, the Warren Report is synonymous with government coverups, misdirection and protection of government officials involved in the situation and subsequent report. It was a very sharp catch on Don Key's part. For people who get the reference, it is pregnant with meaning and can convey that meaning to a wide swath of society far more than lengthy explanations ever could.
Lastly, I happen to like it when bloggers on this site bring different viewpoints to our attention - for those who read critically, the new information allows us to compare and contrast reports on the issue and even if you think the source is unreliable, there is always the possibility of gleaning new information from the report and comparison of facts from other reports. Which of course, is why the cultural reference to the Warren report is so funny.
April 13, 2009 10:48 AM | Reply | Permalink
Don Key is a good Egg, Auntie. Grade A.
Although, his sense of humor. Oy!
April 13, 2009 8:39 PM | Reply | Permalink
But please 'clearly' (quoting you) tell me why I should care what Mike Whitney opines? What else ya got? And I didn't even hit the link to CNN because they are not known for factual substance, (but at least I know their credentials such as they are).
One cited source's presumptions/assertions either way does not a case make for a valid basis to substantiate any claim.
Um, I wouldn't call it "one cited source"---did you notice that the post is about the report just released by the TARP Congressional Oversight Committee headed by Elizabeth Warren?
Whitney's article is a review of the report, but Don links to the report itself first.
Yes, he's making a play on words with the first Warren Commission, to try to make reference to conspiracy theorists that Jon Taplin mentioned in his front page post.
But aside from that "cuteness," whether you are aware of it or not, your tax dollars are paying Elizabeth Warren and her Congressional oversight panel to publish this partly critical report. It's not one source, it's an entire panel, hired by Congress, to oversee what the Treasury Dept. is doing with TARP. If you consider yourself an involved political citizen, it's not something you should be ignoring, whether you agree with what it says or not. I can't imagine the Obama administration is ignoring it, I am sure they are going to have to answer the questions raised in it in hearings.
April 13, 2009 9:07 AM | Reply | Permalink
The above was meant as a reply to Aunt Sam's comment above @ 3:39 AM and the quote in italics is from her, not Don.
I should add that newer members of TPM like Aunt Sam might not know that Elizabeth Warren was a regular columnist for TPMCafe until shortly before she took on the TARP Congressional Oversight Commission, she had her own section on this site, actually, for a couple of years, called Warren Reports, still accessible and had a group of her students posting articles along with her. The "Warren Reports" posts were possibly the least controversial and most fact-based ever posted on this site, having to do with consumer and Main Street and middle class economics issues, and her advocacy work in that regard.
And I should like to add that Don Key probably knows that, because he's been a member of this site for a very long time, and with his bit of snark he might be assuming that other readers here know of her work and reputation, too.
April 13, 2009 9:37 AM | Reply | Permalink
Yes, I didn't think about those who don't know Professor Warren. I started to make a request of J. M. to see if he might be able to get her back for a post or two, but she must a bit busy these days, to say the least.
April 13, 2009 10:47 AM | Reply | Permalink
AA - Always nice to see ya.
Of course I know who E Warren is....as well as her credentials and work product.
I don't know who Whitney is or what his credentials are that provide foundation for his assertions. The point was that only citing one person's summation of the issue presented, especially without informing audience why this person is qualified to make referenced judgments, seldom delivers a balanced thesis.
(I've been around TPM for going on two years, so not that 'new'.)
I do consider myself to be an involved political citizen, and most definitely am not ignoring the report or any other bona fide findings on this matter.
AA, please review my initial comment - the gist of my response was not about the Warren report itself (or it's findings).
I did use Mr. Key's process as an example of my stated premise about postings. (But not before I reviewed his previous postings to ensure this was not a 'fluke'.)
April 13, 2009 1:04 PM | Reply | Permalink
I think the COP report's critique of PPIP and the $4 trillion in bailouts vs. receivership is right on, but that isn't what you're replying to. I don’t understand your criticism that I “give and take away.” I’m not trying to “masque” anything here. The Whitney article was just the first I could find explicating the report, but I’d hope anyone wanting to discuss it would read it (the summary is only four short pages though the gist of it is quoted in Whitney). Sununu’s objections are posted with the summary.
Discussions of the report on blogs can be found through some quick googling, but I didn’t find a lot of news analysis. Anyway, the report speaks for itself. I agree with Whitney’s take but linked to his and the CNN articles mainly as a compare and contrast of the media’s non-coverage of this. I could have quoted the report itself with the same effect as the Whitney quotes.
As to my blogging process; I’m happy to know I have one. That you think I’m being purposely opaque or misleading or something may be a matter of my hit and run (time-wise) commenting and posting here or may be a straw man distracting from criticism of TARP->Geithner->Obama. Again, it’s not about me. If you have some specific criticism of the report or the articles, why not present that?
Speaking of blog posts and citations, are you any relation to this Sam? I only ask because, in “reviewing previous postings,” you had a verbatim post of this a while back with no sources cited at all.
April 13, 2009 2:34 PM | Reply | Permalink
It was a list I received and posted because I too thought it was interesting. It was definitely not the same venue as your post. The list was a puff post as it were.
No need to enact the best offense/defense theory.
My comments regarding your post are just my opinion. Do with it what you will - reject it or whatever.
No need to keep engaging as I stand by my opinion and view as you do yours.
That said, in response to your query, 'If you have some specific criticism of the report or the articles, why not present that?'....
I will do so, but only after I invest the time and energy needed to research all facets so that I am able to base my stance on a myriad of resources of both individuals with noted creditibility in the field and factual based documentation. The challenge is that this process put forth to deal with the economic mess has no precedent (all things being equal). One can declare they know what's best or the outcome, but in truth - until there's some noted resolutions yet to be forthcoming - it's assumptive and presumptive.
April 13, 2009 3:28 PM | Reply | Permalink
Don,
you have the link to the Congressional Oversight Panel's home page, the report is the top of the page news right now but will not stay there,
so here is the exact page where people can access the pdf's of the report:
http://cop.senate.gov/reports/library/report-040709-cop.cfm
as well as the alternative views by Richard Neiman and John Sununu.
If anyone knows of any other reviews or summaries they found helpful, would appreciate knowing of them.
April 13, 2009 9:24 AM | Reply | Permalink
Thank you for the link, AA. I did have to cut this short last night. I thought about linking directly to the report, but I believe it will be front and center on the COP front page until next month's report, and I wanted readers to have a choice between text and Warren's video.
April 13, 2009 10:42 AM | Reply | Permalink
The current bailouts (TARP II, PPIP, Fed generosity) are, Hussman says, an "abuse of the public trust."
April 13, 2009 6:30 PM | Reply | Permalink
Nice link, Ellen. I don't know Hussman but with Hussman Funds I doubt he's a radical progressive-posing libertarian (whatever that is). "Congress needs to quickly legislate the ability to take receivership of non-bank financial institutions, including bank holding companies." -answered one of my questions.
It seems only right to want the government to do "whatever is necessary," as they say on Wall St- I mean in gangster movies, but I can't get past the feeling, like Hussman, that this is an "ethical abomination":
Mercy.
April 13, 2009 8:03 PM | Reply | Permalink
John Hussman is one of the most unique fund managers we've come across over the years. . . . [His is] an expertise built from a career in the academic world, including a stint at the University of Michigan, and now running two funds. WSJ's "Smart Money"
From inception (7/24/2000) through 3/31/2009 Hussman's Strategic Growth Fund had an annual return of 9.22% per year.
During that same period of time the S&P500 (including dividends)* had an annual return of negative (5.3%).
* I've used SPY as a proxy for the S&P500, because Yahoo Finance adjusts for dividends making the compound annual growth rate easy to calculate -- and too, it's one of the cheaper ways of buying the index.
April 13, 2009 8:14 PM | Reply | Permalink
um... your comment looks a bit promotional so:
"[2008]: -9.0% 3-Year: 0.3% 5-Year: 2.4%"
Apparently he hedged well last year. BTW, my reply to your previous comment ended up misthreaded below...
http://tpmcafe.talkingpointsmemo.com/talk/blogs/don_key/2009/04/the-warren-report-and-the-magi.php#comment-3437908
April 13, 2009 8:40 PM | Reply | Permalink
Using Yahoo Finance Tables I work out the 12/31/2008 (3-yr/5-yr) CAGRs for HSGFX to be (0.03/1.61) and SPY to be (-8.52/-2.34).
A three year HSGFX/SPY difference of 8.55% is a cumulative return of 27.9% and a 3.95% difference over five years is 21.4%, cumulatively.
P.S. I've read Hussman for years but never invested with him.
April 13, 2009 10:18 PM | Reply | Permalink
"metastasizes"
I don't see this, even if I accept the 'cancer' metaphor (tumor).
There is a balance between acting too soon and waiting too long. While I'm not happy with PPIP, I'm not all that unhappy with the larger course the Administration seems to be following, including the fact that PPIP is not being rushed into place that I can see.
A well-regulated PPIP might be acceptable, and of course "PPIP-eds" seems like a winner to me. :-)
April 13, 2009 6:50 PM | Reply | Permalink
Frankly, and after reading your comments for the past few weeks, I can't figure out where you're coming from.
Do you really think American workers can service the debt that's been piled up over the last five or six years? My God, man, look at it!
April 13, 2009 8:29 PM | Reply | Permalink
Oy! Say it isn't so, someone has out-subtled Ellen?
(thunk)
April 13, 2009 8:35 PM | Reply | Permalink
Welcome to the club!
Question is: Where are you headed?
And thanks to Bwak, too!
April 13, 2009 10:48 PM | Reply | Permalink
Debt write down. Where are you headed?
April 13, 2009 11:49 PM | Reply | Permalink
I've been calling for losses to be taken, for months. I don't know how you mean "debt write down". How much of the debt shown on those charts is "worker" debt? Credit card debt is a small if not tiny fraction of total US debt. Mortgage debt is a very big chunk. Financial sector is said to be $17T. What's your focus here?
I've had a firm stance on PPIP. Do you need me to reiterate that? Does "PPIP-eds" need explanation? What?
I don't get how you can have been reading my comments and posts as much as it appears you have, and not have a clue where I'm coming from in general. If there's something in particular here... ?
April 14, 2009 4:31 PM | Reply | Permalink
And now for something completely different.
Pace Mike Whitney, until its proven by someone I tune out the explanations that only malfeasance can explain the Geithner/Summers attempts to rejuvenate the financial system without resorting to either nationalization of bankruptcy.
If either of them were truly venal they would long ago have migrated to Wall Street where they could have earned a multiple of the annual few hundred K they've reaped in the fields of the NY Fed , the Treasury or the Groves of Academe (Yeah I know about the $5million Summers scored at a hedge fund last year. Perhaps indeed evidence of venality finally expressed. But equally evidence of what he chose to give up over the preceding 20 years.)
There's perceptive criticism of their policies here and elsewhere.And support at least elsewhere-precious little here. That's useful.
Unsubstantiated aspersions on their morality,isn't.
April 13, 2009 9:23 PM | Reply | Permalink
Whitney doesn't wear kidd gloves but that's not his main point. He's saying Geithner doesn't know what he's doing. But I wish I hadn't linked to Whitney. This was about the COP (a pretty balanced panel) report which, considering how tempered government criticism by government commissions usually is, is a pretty scathing denunciation of the TARP direction.
I do know from news reports that Geithner was a protegé of Summers and Rubin, enthusiastic supporters of the Gramm-Leach-Bliley Act and most deregulation, who did work for Wall St. (Citicorp and GS). Paulson (GS) was a big endorser of Geithner, too. I do know that Geithner worked at the IMF and NY Fed yet neglected to pay some taxes (not confidence inspiring) and made misrepresentations during the investigation into his tax problems.
But, I don't know a thing about Summer's or Geithner's personal ethics. They may be on a mission from God for all I know. I can't look into their souls, and I'm not trying to here.
This was not about Geithner's and Summer's motives, and all of that aside, what the majority of the COP report is questioning is whether Geithner's $multi-trillion closed-door bailout of the big stockholders and wealthy WS executives will achieve its ends without transparency, honesty (see: "stress tests") and restructuring the system.
April 13, 2009 10:37 PM | Reply | Permalink
I guess you're not a fan of Mike Whitney.
You're probably not pleased with Eichengreen and O'Rourke's charts, either.
April 13, 2009 9:48 PM | Reply | Permalink
Should have been keyed as a reply to flavius, above.
April 13, 2009 11:52 PM | Reply | Permalink
Can't think anyone is pleased by E & O. At least by what they show. Some are perhaps inevitable. Surely world trade is higher now and consequently the drop off was almost certainly going to be greater. You can't lose what you never had.
April 14, 2009 12:38 AM | Reply | Permalink
Percent drop off is important.
People lose their illusions. The expectation values of future value are largely imaginary. Dashed expectations are at the root of most contract disputes not to mention the outcries over 401ks going to 201ks and faux-populism over a relative pittance in executive compensation discrepancy.
Meanwhile gamblers and crooks keep getting their bets paid off instead of having their contracts voided or being put in jail, or both.
April 14, 2009 4:40 PM | Reply | Permalink
People can accept things not getting better. Getting worse , no. Even if getting worse consists of being forced to substitute Taos for a mega yacht at Cap de Antibes.
Kind of thing that generates intense resentment of the gamblers and crooks whom they otherwise wouldn't much mind if they themselves were still lounging on the deck with Bernie.
April 14, 2009 9:11 PM | Reply | Permalink
Dead Bernie, or Mr. Madoff? :-)
Well the graph/charts don't give me anything hopeful to look forward to. If housing prices come down, that's good for me, but if the economy gets a whole lot worse that might neutralize the housing opportunity depending on just which road to hell we end up on as the dominant mode.
April 15, 2009 2:59 AM | Reply | Permalink
Madoff. That's where he recovered from the arduous toil of generating phony paper work purporting to show the phony trades with which he made his phony profits.
Even a newly graduated accountant on his first audit should have automatically attempted to confirm at least a random sample of those trades. Even I would have , in fact have done (and made some interesting discoveries) with only the most superficial accounting background. No one has to tell you to do that, it's second nature. In fact someone would have to tell you not to do that.
Weird.
April 15, 2009 8:16 AM | Reply | Permalink
PS -thanks for words of support...
April 14, 2009 12:11 PM | Reply | Permalink