Happy Friday. Among this morning’s items – Paul Krugman weighs in on the FCIC hearings, one columnist says Geithner should get a pass on AIG and another one got socked with 703% credit card APR??!!
Stop listening to Wall Street (Paul Krugman/NYT) As I watched the FCIC hearings and the testimony of the bank CEO’s, I was thinking the same thing. These guys don’t have a clue:
Do the bankers really not understand what happened, or are they just talking their self-interest? No matter. As I said, the important thing looking forward is to stop listening to financiers about financial reform.
Wall Street executives will tell you that the financial-reform bill the House passed last month would cripple the economy with overregulation (it’s actually quite mild). They’ll insist that the tax on bank debt just proposed by the Obama administration is a crude concession to foolish populism. They’ll warn that action to tax or otherwise rein in financial-industry compensation is destructive and unjustified.
But what do they know? The answer, as far as I can tell, is: not much.
Deriving the truth (City Journal) Excellent explanation of the role of derivatives.
Blankfein then took refuge in generalities and absurdities. “Aspects of the over-the-counter derivatives market were a very, very big concern and a big worry,” he said: the generality. And then the absurdity: “My belief is that the derivatives market functioned actually pretty well under the circumstances. . . . We didn’t specifically have a derivatives crisis.”
If you’re the kind of person who would be outraged if a paramedic smudged your lipstick while giving you mouth-to-mouth resuscitation, you should definitely be outraged by the latest AIG “scandal…” if you booed Lassie for tracking mud on the carpet after saving that kid in the well, you might want to join the angry chorus calling for Geithner’s head.
On the other hand, if you’re the kind of person who believes at least some good deeds should go unpunished, you might want to cut Geithner and his colleagues at the Fed some slack for their performance during the worst financial crisis since the 1930s.
Credit card reform and my new 703% APR (Moneywatch)
Department Stores National Bank, which issues the card, charges a “minimum interest charge.” On my average daily balance of $3.41, that minimum charge worked out to “an actual annual percentage rate” of 703.80%…
Such are sneaky new fees that are now springing up in response to the Credit Card Accountability, Responsibility and Disclosure Act passed last May, said Bill Hardekopf, president of LowCards.com, a rate-shopping web site.
So, what are banks for anyway? (New Deal 2. 0)
President Clinton says Haiti needs the world (PBS NewsHour)
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