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Gender: Male
Hometown: Detroit, Michigan
Home country: Citizen of the world whose address is in the U.S.
Current location: Detroit, Michigan
Member since: Thu Oct 28, 2004, 11:18 PM
Number of posts: 69,332

Journal Archives

The Rise of Shadow Banks and the Repeal of the Glass-Steagall Act

The Rise of Shadow Banks and the Repeal of the Glass-Steagall Act

Wednesday, 13 January 2016 00:00
By Deena Zaidi, Truthout | News Analysis

Prior to the 2008 financial crisis, the Federal Reserve had an important role - to solely act as a "lender of last resort" to traditional commercial banks. But during the crisis, the financial support was extended to many non-banking firms like money market mutual funds, the commercial paper market, mortgage-backed securities market and the tri-party repo market. Besides the extensive lending, non-commercial banks (also known as shadow banks) like Bear Stearns and Lehman Brothers were first to fail, triggering one of the worst financial crises across the world.

A shortage of short-term bank debt, a lack of liquidity in the commercial paper market and a sudden drop in confidence in the money market mutual fund industry initiated the crisis. Moreover, shadow banks helped in generating low-quality loans to investors seeking higher returns. All these financial products were traded through a network of financial institutions as part of the "shadow banking system."

Economist Paul McCulley, in his 2007 speech at the Annual Financial Symposium hosted by the Kansas City Federal Reserve Bank in Jackson Hole, Wyoming, coined the term "shadow bank." Traditional commercial banks have been the driving force for creating liquidity in the economy. They accept the illiquid liabilities of both nonfinancial and financial entities for their own liquid liabilities and have access to the emergency funding of the Federal Reserve.

The shadow banking system, in contrast, introduced activities that generated liquidity through capital markets without public guarantees and provided access to the central bank as the "lender of last resort." Unlike traditional commercial banks, shadow banks are unregulated and not subject to the traditional banking regulation system. This means that they cannot borrow in an emergency from the Federal Reserve, unlike traditional banks. The reason they are called shadow banks is because they remain uninsured under the Federal Deposit Insurance Corporation (FDIC), or roughly speaking, they remain in the shadows of the traditional banking system.

The Increasing Size of Shadow Banking in the US

Investment banks, structured investment vehicles, hedge funds, non-bank financial institutions, money market funds, mutual funds and exchange-traded funds are all a part of the shadow banking system and are not required to maintain any reserves or emergency capital. "No regulations" in a "regulated environment" could be the biggest worry of the shadow banking system. Often beyond the control of regulators and monetary policy, shadow-banking activities can resort to risky lending. According to the New York Fed, shadow banks have "increased the fragility of the entire financial system." While the total of non-bank financial intermediaries decreased immediately after the 2008 financial crisis, the number of shadow banks have picked up in recent years. ................(more)


The “Enthusiasm Gap" between Bernie Sanders & Hillary Clinton

Published on Jan 11, 2016

Neil Sroka, Democracy for America joins Thom. It's just three weeks until the Iowa caucuses - and Vermont Senator Bernie Sanders is in a statistical dead heat with former Secretary of State Hillary Clinton. And that's despite the fact that Washington insiders have spent months saying that Bernie Sanders is just less electable than Hillary. We’ll be talking about why the insiders got it so wrong.

TYT: Bernie Sanders Takes The Lead

Gov. Snyder to the rescue (cartoon)


Las Vegas: Light Rail Presented as Best Option to Connect Strip, Airport, Downtown

NV: Light Rail Presented as Best Option to Connect Strip, Airport, Downtown

J.D. MORRIS ON JAN 13, 2016

Jan. 12--Why does Las Vegas need light rail?

It would link the airport, the Strip and downtown Las Vegas, a critical connection that would benefit both the economy and the tourist experience, a local transportation official said today.

And it's the best type of transit to accomplish that goal, according to David Swallow, senior director of engineering and technology with the Regional Transportation Commission.

Swallow told the board of the Las Vegas Convention and Visitors Authority that planners looked at multiple technology options. They eventually recommended light rail because it has the flexibility to be expanded into a larger system, it's a proven technology that has been used elsewhere and it could draw in "a certain ridership," he said.

"Light rail systems tend to have a little panache that attracts a different type of rider," Swallow said. .............(more)


U.S. Media Condemns Iran’s “Aggression” in Intercepting U.S. Naval Ships — in Iranian Waters

(The Intercept) News broke last night, hours before President Obama’s State of the Union address, that two U.S. Navy ships “in the Persian Gulf” were “seized” by Iran, and the 10 sailors on board were “arrested.” The Iranian government quickly said, and even the U.S. government itself seemed to acknowledge, that these ships had entered Iranian waters without permission, and were thus inside Iranian territory when detained. CNN’s Barbara Starr, as she always does, immediately went on-air with Wolf Blitzer to read what U.S. officials told her to say: “We are told that right now, what the U.S. thinks may have happened, is that one of these small boats experienced a mechanical problem . . . perhaps beginning to drift . . . it was at that point, the theory goes right now, that they drifted into Iranian territorial waters.”

It goes without saying that every country has the right to patrol and defend its territorial waters and to intercept other nations’ military boats that enter without permission. Indeed, the White House itself last night was clear that, in its view, this was “not a hostile act by Iran” and that Iran had given assurances that the sailors would be promptly released. And this morning they were released, exactly as Iran promised they would be, after Iran said it determined the trespassing was accidental and the U.S. apologized and promised no future transgressions.

Despite all of this, most U.S. news accounts last night quickly skimmed over – or outright ignored – the rather critical fact that the U.S. ships had “drifted into” Iranian waters. Instead, all sorts of TV news personalities and U.S. establishment figures puffed out their chest and instantly donned their Tough Warrior pose to proclaim that this was an act of aggression – virtually an act of war: not by the U.S., but by Iran. They had taken our sailors “hostage,” showing yet again how menacing and untrustworthy they are. Completely typical was this instant analysis from former Clinton and Bush Middle East negotiator Aaron David Miller, now at the Woodrow Wilson International Center for Scholars:

Iran detains US sailors. Released promptly or not, a hostile act by a regime that acts w/o US cost/consequence https://t.co/0MNy0FnsjI

— Aaron David Miller (@aarondmiller2) January 12, 2016


Just imagine what would happen if the situation had been reversed: if two Iranian naval ships had entered U.S. waters off the East Coast of the country without permission or notice. Wolf Blitzer would have declared war within minutes; Aaron David Miller would have sprained one his fingers madly tweeting about Iranian aggression and the need to show resolve; and Joe Scarborough would have videotaped himself throwing one of his Starbucks cups at a picture of the mullahs to show them that they cannot push America around and there “will be hell to pay.” And, needless to say, the U.S. government would have – quite rightly – detained the Iranian ships and the sailors aboard them to determine why they had entered U.S. waters (and had they released the Iranians less than 24 hours later, the U.S. media would have compared Obama to Neville Chamberlain). ...............(more)


The coddling of the conservative mind

from Salon:

The coddling of the conservative mind
Why baiting "politically correct" college students won’t save honorable conservatism or America. And what might


Look who’s complaining

Something strange is happening at America’s colleges and universities. A movement is arising — undirected by students, professors or deans but scripted, funded and promoted by people off-campus — that blames liberals for trying to scrub campuses clean of words, ideas and subjects that might cause discomfort or give offense. Speech codes. Trigger warnings. Safe spaces. We’ve all read and heard disturbing accounts of such measures’ ubiquity and oppressiveness on campus after campus, their students depicted as demanding them en masse and administrators as rushing to establish them.

I don’t expect these alarms to stop being sounded, or students to stop demonstrating, once the new semester is underway. But this is the time to consider what’s really driving not only the students, but the strong and largely successful campaign to condemn them.

“Our colleges and universities, though lavishly funded and granted every perquisite which a dynamic capitalist economy can offer, have become factories for the manufacture of intellectual and moral conformity,” thundered Roger Kimball, the veteran conservative polemicist, strategist and chairman of the board of the William F. Buckley Program at Yale, introducing the columnist George Will last April at a black-tie “Disinvitation Dinner” sponsored by the program to dramatize Scripps College’s cancellation of its invitation to Will to be one of several conservative speakers it has been bringing to a lecture series.


Look who’s been coddled

That counter-revolution was announced in 1951, early in the Cold War, when Buckley’s own “God and Man at Yale” urged Yale’s presumptively Christian-gentleman alumni to rescue their college, their faith and free enterprise from their professors’ incipiently totalitarian socialism. But Ivy alumni weren’t quite the splendid, steely gentlemen Buckley was conjuring up as his foil to leftist oppressors. John P. Marquand’s 1941 novel “H.M. Pulham, Esquire,” presented the vapid, all-too-representative meditations of a Harvard grad struggling to summarize his life thus far for the 25th reunion of his equally coddled, clueless, conformist classmates, all striding through life in a feignedly hearty but tightly correct lockstep.

Conservative business and social elites had been manufacturing moral and intellectual conformity for nearly a century before Marquand’s novel was published. “A thought would destroy most persons whom we know. Bring a thought into a chamber full of company, it would extinguish most of them. They are exposed as counterfeits and charlatans, as rats and mice, they who strutted, a moment ago, as the princes of the world,” wrote Ralph Waldo Emerson, himself a Harvard graduate, in 1858. ...................(more)


Kshama Sawant Shows That Ordinary People Aren’t Afraid of Unapologetic Leftist Politics

Kshama Sawant Shows That Ordinary People Aren’t Afraid of Unapologetic Leftist Politics

When Vanessa Patricelli first heard Kshama Sawant speak, she thought the socialist was nuts.

It was November 2013. Sawant had just been elected to the Seattle City Council as a member of the Socialist Alternative party. And Boeing was threatening to cut thousands of jobs if its machinists didn’t give up their pensions and Washington State didn’t hand the company $8.7 billion in tax breaks.

Patricelli, a public hospital nurse active in her union, had joined a downtown Seattle rally for the Boeing machinists with labor leaders and allies. When Sawant took the microphone, she declared her solidarity with Boeing employees, adding that if the aerospace giant wanted to engage in “economic terrorism,” the workers should take over the factories and place them under democratic control.

“I come from a conservative background,” Patricelli told me later. “It was like, I’m with you, I’m with you… but workers running factories? Oh my god, she’s crazy-pants!”

Yet two years later, on election night 2015, Patricelli was celebrating Sawant’s reelection along with hundreds of union members, students, housing rights advocates, LGBTQ activists, and radicals of various stripes at the campaign’s party. .............(more)


Keiser Report: Bonfire of Misallocated Capital

Published on Jan 12, 2016

Check Keiser Report websitefor more: http://www.maxkeiser.com/

In this episode of the Keiser Report, Max Keiser and Stacy Herbert discuss the bonfire of the misallocated capital as everything from the S&P 500 to China’s Producer Price Index to South Africa’s rand signal a deflationary collapse. In the second half, Max interviews Lee Adler of WallStreetExaminer.com about distribution taking place in the stock market and why the IPO of Saudi Aramco could pull even more cash out of the economy.

The DNC Junta Is Continuing the Democratic Leadership Council Coup

The DNC Junta Is Continuing the Democratic Leadership Council Coup

Tuesday, 12 January 2016 00:00
By The Daily Take Team, The Thom Hartmann Program | Op-Ed


Now, considering the fact that Bernie Sanders does better than Hillary Clinton in a hypothetical matchup with Republican frontrunner Donald Trump, you'd think that the establishment Democrats would be thrilled with these developments.

You'd think that the people who talk so much about "electability" and how important it is would be overjoyed that Bernie Sanders, a popular and electable candidate, is moving towards the Democratic nomination.

Apparently not.

Instead of celebrating the rise of a new star, establishment Democrats are freaking out about the possibility of Bernie Sanders winning both Iowa and New Hampshire.

Case in point: former Tennessee congressman Harold Ford, Jr., who on MSNBC agreed with Joe Scarborough that establishment Dems could recruit John Kerry or Joe Biden to run if Bernie sweeps both early primary states. ...........(more)


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