Archive for the ‘current event’ Category
As readers of UP@NIGHT may know from a previous blog, “The Unpatriotic Corporation,” we here at UP@NIGHT think little of B of A. It’s a scandal that its name suggests that it is somehow affiliated with our country. Yesterday we learned that AIG is suing Bank of America. Here is the beginning of how this event was reported in the NY Times.
The American International Group sued Bank of America on Monday over hundreds of mortgage-backed securities, adding to the surge of investors seeking compensation for the troubled mortgages that led to the financial crisis.
The suit seeks to recover more than $10 billion in losses on $28 billion of investments, in possibly the largest mortgage-security-related action filed by a single investor.
It claims that Bank of America and its Merrill Lynch and Countrywide Financial units misrepresented the quality of the mortgages placed in securities and sold to investors, according to three people with knowledge of the complaint.
This helped make my day in the middle of Monday’s crash. But to really top it off, as this report from Stewart and Co. reveals, B of A was foreclosed on by a couple of ordinary American citizens. It doesn’t get much better in these difficult times.
Was I correct in suggesting two weeks ago that Mad Men is in danger of letting style override content? Many of you agreed. Many disagreed. Today I offer a visual update. Two photos. Both taken on an iPhone on Thursday evening, August 5th, at the reasonably upscale Westchester Mall. Mad Men fans will recognize the three posters in the left photo. (The word “Style” on the center window, with a seated former Mrs. Draper, is a bonus.) The photo on the right is drumming up business for Long Island University.
America has turned to style to replace substance (real income and growth) in tough times before. Perhaps we are beginning to see a replay (although in the 1930′s at least the fashion was original).
So, you think of yourself as an honest soul. You understand that stealing property or money is wrong. You wouldn’t do it. You wouldn’t want your kids or friends to do it. It’s unthinkable. But I have a proposition for you.
Here is a button. All you have to do is press it and $100,000 will be transferred from Goldman Sachs, BP–or any other giant corporation whose resources are larger than most countries–into your bank account. Nobody will ever know. It’s a magic button. Well, not really magic. Some geek has wired it in a fashion so that money can be transferred to your account without anyone being able to trace it–in the tradition of how derivatives were traded.
Just think of how much money Goldman Sachs and its executives made in the last few years as the Market tanked, while you probably lost money in your hard-earned retirement account. Not only did you recently lose money, but if you had invested $1,000 dollars eleven years ago in the Dow, that’s just about what it would be worth today, $1,000 (less if inflation is factored in). But you know, and I know, how much money these guys have made trading your money and my money. But that’s capitalism, you say. It’s the way the game is played.
But would you push the button? Would you be tempted to do it? Or perhaps a better question: how many of your fellow Americans do you think would be tempted? A lot, right? (Or an even better question, how many more would push it today than ten or twenty years ago?)
The recent Melt Down on Wall Street, and the ensuing profits made by big trading firms and banks, have been corrosive in ways that we may not fully understand for years. You’ve got Tea Baggers screaming about Washington, but the revelations about how Wall Street operates have buried themselves deep in our collective subconscious. Real damage has been done. Yes, we knew that there was big money out there and that big money corrupts. (Before the present Melt Down, there was Enron and assorted other travesties.) Yet “knowing” is one thing. Seeing it in front of your eyes day after day, year after year, undermines confidence that the system is anything close to fair. Yes, Obama has attempted to tame Wall Street with new regulations. They will do some good. Yet as long as we continue to see different rules of the game for a small strata of society, which is indeed what we have seen, our belief in the benefits of capitalism will be undermined by a gnawing sense that it is corrupting us, our children, our society. From a sanctified economic system, it will become what we have to put up with, sort of like the Roman emperors in Imperial Rome. It won’t go away anytime soon but we aren’t going to feel good about it.
There was a time in American business when many people believed that a handshake was as good as a contract, or so I am told. People kept their word. It now seems that handshakes still function in this manner for a small elite segment of corporate America that makes deals for unimaginable sums. The rest of us can’t depend on them when we deal with companies. (How about a handshake between you and your medical insurance company to guarantee your coverage? Any takers?) The middle class will need more and more contracts and lawyers to protect them in an economy in which money has gone wild. And they will have relatively less money to hire these lawyers.
No doubt there are problems with the way government functions. But anyone who thinks that this is the major source of the declining confidence in how our society works really needs to look at Wall Street with suitable eyewear. The business of America is no longer doing business but being given the business.