Lewis Says More "Liar's Poker" and "Another Day of Reckoning" Upcoming

*****Donations Desperately Needed***** ######Need $600 by tomorrow.###### From my friend and mentor, Danny Schechter, I read this morning that a prominent Enron lobbyist will now shill for the Federal Reserve. See the benefits of hiring Tim Geithner? Without that stroke of Obama brilliance I'll bet things would be a whole lot worse. Michael Lewis, author of Liar's Poker and many other fine investigative works, documents how "the government's rescue efforts have only served to postpone a "day of reckoning" for Wall Street."

I think that we are in for another day of reckoning down the road. I just don't know when it is.

I think that they haven't even properly evaluated the institutions.

They haven't been honest about what these institutions have on their books. They've had phony stress tests.

So, we're in a kind of, I think, right now, in a period where there's a false sense that it's over, that the crisis is passed. I don't think the crisis is passed.

Part of the problem, Lewis argues, is that the architects of the bailout are too cozy with the banks which created the financial crisis in the first place, even speculating that Treasury Secretary Tim Geithner is already looking ahead to a cushy job in the private sector.

"...one of the things that's odd about the current situation is that the people who created the problem are so powerful in deciding what the solution to the problem is going to be. There is a great tradition on Wall Street of making a fortune, creating a mess, and then making a fortune cleaning it up. But to do it on this scale is breathtaking to me.

And it is amazing to me the degree to which, say, Goldman Sachs is intertwined with the Treasury, and how there - there don't seem to be any independent voices in the thick of the decision-making. The decision-making is all being done by people who one way or another might expect to make a lot of money from Goldman Sachs in the future. . .

So, so much for that school of thought. Read the rest (which is not much different from what you've been reading here) here. From Naked Capitalism we read that

“One of the things that has intrigued me about the financial crisis is that it is pretty clear that looting took place at the high end of the financial services industry, yet few have called it by that name, in part because it has been difficult to identify the mechanisms by which it occurred. Looting, as described by George Akerlof and Paul Romer, occurs when business owners go broke at society’s expense (loot) rather than go broke as the unfortunate result of having gambled on success and lost. And looking at Wall Street, the fact set strongly suggests that looting took place, In the old days of private partnerships, firms might blow themselves up on an individual basis, and you’d occasionally see serious industry downdrafts thinning the herd (the back office crisis of the late 1960s, the one-two punch of the end of fixed equity commissions plus the down leg of the 1970s bear market). But having the industry run of the cliff en masse was previously limited to commercial banking. Now when William Black, a senior bank regulator during the S&L crisis, has talked about this phenomenon, he frames it as control fraud, meaning orchestrated in a deliberate fashion at the top level of a firm. While that probably contributed, particularly if an organization was desperate, but I suspect more complicated mechanisms played a big role.” READ FULL STORY HERE

I dearly love Bill Black (not of the Combo - although . . . .) and think he is one of the most (if not the most) trustworthy persons on the scene today (and only wish he were less than honorable). If you can possibly make a contribution, please do so today. Suzan _______________________