New William Black Piece in Barron's Is Not Bullish

Update: For a contrary, quasi-bullish view (and not reassuring for those who shorted the Dow), see Simon Johnson: TNRtv: Signs of an Economic Recovery?

If Robert Shiller's piece in Bloomberg were not sufficiently amusing, check out William Black's interview with Jack Willoughby in Barron's.

I wonder if Rep Paul Ryan reads a copy of the interview at the great GOP Tea Party today.

An excerpt:

Black: Mopping up the savings-and-loan crisis cost $150 billion; this current crisis will probably cost a multiple of that. The scale of fraud is immense. This whole bank scandal makes Teapot Dome [of the 1920s] look like some kid's doll set. Unless the current administration changes course pretty drastically, the scandal will destroy Barack Obama's presidency. The Bush administration was even worse. But they are out of town. This will destroy Obama's administration, both economically and in terms of integrity.

Matt Taibbi on the Global Economic Crisis

Trying to comprehend the Global Economic Crisis, a diligent lay reader can construct some broad narrative of the scale and motives of the financial sectors' machinations and the political and regulatory duplicity by reading Paul Craig Roberts, Nouriel Roubini's Global EconoMonitor, Paul Krugman, CounterPunch, among several other sources late at night.

But the undertaking is still like trying to understand the mathematics of SuperString Theory. We are not equipped.

Matt Taibbi's 8,700-word piece in Rolling Stone puts together the most coherent piece that I have read yet.

Check Taibbi's piece out, and bear it in mind as you read of the next attempt by the Obama administration (and the GOP pushback and its alleged concern for the everyday American) to try to contain this seeming black hole that appears to have come from nowhere and is somehow aligned with strange forces in our society, equipped with properties that transform our government into some vaguely malevolent entity. Sounds like science fiction.

Most Americans harbor vague notions that our country is run by a few powerful interests looking out for themselves. Most Americans appear to have been correct.

An excerpt from Taibbi:

So it's time to admit it: We're fools, protagonists in a kind of gruesome comedy about the marriage of greed and stupidity. And the worst part about it is that we're still in denial — we still think this is some kind of unfortunate accident, not something that was created by the group of psychopaths on Wall Street whom we allowed to gang-rape the American Dream. When Geithner announced the new $30 billion bailout, the party line was that poor AIG was just a victim of a lot of shitty luck — bad year for business, you know, what with the financial crisis and all. Edward Liddy, the company's CEO, actually compared it to catching a cold: 'The marketplace is a pretty crummy place to be right now,' he said. 'When the world catches pneumonia, we get it too.' In a pathetic attempt at name-dropping, he even whined that AIG was being 'consumed by the same issues that are driving house prices down and 401K statements down and Warren Buffet's investment portfolio down.'

Merrill Lynch's John Thain: Villain of the Century

Update II: Obama Calls Wall Street Bonuses ‘Shameful’

Update: John Thain's Top Ten Greatest Moments

Can you believe this? Sick.

Merrill Lynch, with CEO John Thain presiding, paid fifteen billion dollars in bonuses in December with public money. This news is sure to be iconic.

As in outrageously sociopathic, meet the Jeffrey Dahmer of finance: Merrill Lynch CEO John Thain.

From Clusterstock.com, read John Carney's Wall Street’s Sick Psychology of Entitlement

Writes Carney:

The news that Merrill Lynch paid out $15 billion in bonuses is sure to ignite new questions about the wisdom of bailing out Wall Street. Merrill Lynch took $10 billion from the TARP, allegedly to fill holes in its balance sheet. But instead of using that to repair its financial health, it simply put the money into the pockets of its employees. There is no way to defend this disgusting payout.

But that won’t stop Bank of America, which now owns Merrill, from
defending the bonuses. And across Wall Street there are lots of people who actually believe that Merrill did the right thing.

How can so many smart people be so dumb?

Easily.

There is a sick psychology of entitlement on Wall Street that was created during the bubble years. Many simply cannot believe that they do not deserve huge pay packages. Their brains have (not) caught up with the idea that they are working in broken institutions that would
be unable to pay to keep the lights on if not for the fact that Washington has given them billions of taxpayer dollars.
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See also Henry Blodget's 75% Of Latest Bank Of America Bailout Used To Pay Merrill Lynch Bonuses (BAC):

Remember the latest Bank of America (BAC) bailout, the one we were all so steamed about last week? (The $20 billion of cash and $100+ billion of trash-asset guarantees that absolutely had to be given or else Bank of America shareholders might have lost everything?)

Yes, well, you probably thought that that cash would be used to bolster the bank's capital or something. (We know you weren't dumb enough to think it might have been used to make loans).

Alas, it wasn't used for that. It was used to pay Merrill Lynch executives the huge bonuses they deserved for unloading their balance sheet on for-some-reason-not-yet-fired Bank of America CEO Ken Lewis.*

*BOFA will say that the cash used to pay the bonuses was not the actual cash received from taxpayers. Please. Cash is cash. What BOFA and Merrill are already saying in their defense is that the bonuses were accrued (and mostly paid) all year and that Merrill just shelled out the last $4 billion in December...a month before the latest bailout funds arrived.

But that's ridiculous. ...

From a political perspective, Obama can propose and pass just about any regulatory framework to hold these guys accountable.

This is the 911 of Wall Street greed. CEO John Thain, this is the *$^&* who will make Enron's Kenneth Lay look like Jesus Christ.

'Fear' Index Hits All-time High

Who can argue that the Bailout Plan, incomplete though it is, is not needed to halt the fear breeding on fear?

From Reuters:

By Doris Frankel
CHICAGO, Oct 6 (Reuters) - An index regarded as Wall Street's fear gauge surged to a record high on Monday in a sign investors expect more stock market turmoil as they scramble for options to insure their stock portfolios.

CBOE VOLATILITY INDEX (^VIX) or Fear Index over Five Years