Marketplace Scratch Pad

Morning Reading

Scott Jagow May 14, 2009

Oh, for crying out loud. California wants TARP money. The S and P says the banking crisis has “merely entered a new phase” and might go on until 2013. And… I just poured orange juice on my cereal. It’s one of those days:

SEC goes after former Countrywide CEO Angelo Mozilo (New York Magazine)
(Mozilo’s lawyers tell) the Journal that there is no “fair basis” for any allegations against the orange-skinned chief. “When the true facts are heard, it will be clear that Mr. Mozilo has no personal liability for alleged improper lending practices,” said one lawyer. They might be right: As a “person familiar with these investigations” told the Journal, “greed and stupidity are not criminal acts.” Not yet, anyway.

Back to basics (The New Republic)
“There is a better way to restore trust in our financial system and get our economy rolling: Limited Purpose Banking. It’s a simple and essentially costless change in our financial system that limits banks to their legitimate purpose: connecting, and intermediating between, borrowers and lenders and savers and investors. Under Limited Purpose Banking, all financial corporations engaged in financial intermediation, including all banks and insurance companies, would function exclusively as middlemen who sell safe as well as risky collections of securities (mutual funds) to the public. They would never, themselves, own financial assets.”

Earmark Nation (Wall Street Journal)
“The U.S. budget is now history’s biggest mountain of swag; it is uncountable goodie bags filled with tax revenue. Mr. Obama’s swag mountain, the fiscal year 2010 “budget,” is $3.59 trillion high (25% of total GDP of about $14 trillion). His $800 billion stimulus bill was another pile of public cash. We the people have concluded that if we don’t use the Honorable John or Nancy or Ted in Congress to get our piece of it, someone else will get it.”

Black executive: I was fired for supporting a white candidate (New York Post)
Joyce Johnson, the former president and CEO of the nonprofit Black Equity Alliance, said its board of directors ousted her after she endorsed Bloomberg in March. Bloomberg, an independent, could find himself running against Democratic city Comptroller Bill Thompson, who is black. Johnson said a board member told her “it would not look good” for the president of the BEA to endorse Bloomberg.

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