Too Big To Succeed

White House to Give Detroit $300 Million in Federal Aid

"Nearly $150 million of the proposed $300 million will go toward the demolition of Detroit’s many dilapidated and abandoned buildings. Another $140 million will go toward the city’s public transportation system, including renovations for buses (including more security cameras) and the city’s now-under construction light-rail system. Lastly, approximately $30 million will go toward hiring more firefighters to help the city deal with its arson problem and $3 million will go toward strengthening the city’s police force. But although the funds may come as a blessing, they won’t even come close to addressing the city’s $18 billion in liabilities." Continue reading →

Continue ReadingWhite House to Give Detroit $300 Million in Federal Aid

White House to Give Detroit $300 Million in Federal Aid

"Nearly $150 million of the proposed $300 million will go toward the demolition of Detroit’s many dilapidated and abandoned buildings. Another $140 million will go toward the city’s public transportation system, including renovations for buses (including more security cameras) and the city’s now-under construction light-rail system. Lastly, approximately $30 million will go toward hiring more firefighters to help the city deal with its arson problem and $3 million will go toward strengthening the city’s police force. But although the funds may come as a blessing, they won’t even come close to addressing the city’s $18 billion in liabilities." Continue reading →

Continue ReadingWhite House to Give Detroit $300 Million in Federal Aid

Data Broker Giants Hacked by ID Theft Service

"An identity theft service that sells Social Security numbers, birth records, credit and background reports on millions of Americans has infiltrated computers at some of America’s largest consumer and business data aggregators, according to a seven-month investigation by KrebsOnSecurity. All three victim companies said they are working with federal authorities and third-party forensics firms in the early stages of determining how far the breaches extend, and whether indeed any sensitive information was accessed and exfiltrated from their networks. The intrusions raise major questions about how these compromises may have aided identity thieves." Continue reading →

Continue ReadingData Broker Giants Hacked by ID Theft Service

And the money trail leads to…

"A case in point is the Dodd-Frank Act. Wall Street was officially horrified by this law, which officially sought to end some of the practices that led to the financial collapse and big bailouts of leading U.S. investment firms in 2008-2009. But buried in the bowels of this 2,319-page law was a provision targeted squarely at 'foreign investment managers.' Simply put, the new rule forced every foreign bank, brokerage, or financial advisor with 15 more U.S. clients to register with the Securities & Exchange Commission. One Swiss-based investment manager who went through the process told me he spent more than $100,000 in legal fees to do it – not to mention hundreds of hours." Continue reading →

Continue ReadingAnd the money trail leads to…

Too Big To Fail Is Now Bigger Than Ever Before

"Ever since the financial crisis of 2008, our politicians have been running around proclaiming that they will not rest until they have fixed 'the too big to fail problem', but instead of fixing it those banks have rapidly gotten even larger. We are witnessing a consolidation of the banking industry that is absolutely stunning. Hundreds of smaller banks have been swallowed up by these behemoths, and millions of Americans are finding that they have to deal with these banking giants whether they like it or not. These banks have been unbelievably reckless, but when they fail, we will all pay the price." Continue reading →

Continue ReadingToo Big To Fail Is Now Bigger Than Ever Before

When Dominance Leads to Incompetence and Catastrophe

"It's rather staggering to list Microsoft's failures over the past decade. The strategy that worked in the 1990s--copy rivals and add more features to the copycat products and services--is no longer working. Dominance in any space breeds complacency and enables the luxuries of political squabbling, sclerosis and loss of focus. Competence becomes incompetence, and the infrastructure that fosters creativity and flexibility--that is, a keen appreciation of risk and spontaneity--is slowly dismantled. That applies not just to corporations but to governments, nations and empires." Continue reading →

Continue ReadingWhen Dominance Leads to Incompetence and Catastrophe

David Stockman on his Book and the Bailouts

"The panic and bailouts that followed were really about protecting the bonuses and incomes of very wealthy and politically well-connected managers at banks and other heavily leveraged businesses that were eventually deemed too big to fail. What followed was a massive transfer of wealth from the taxpayers and middle-class savers, in the form of bailouts and zero interest rates on bank deposits imposed by the Fed, to the so-called One Percent. As I show in my book, none of this was necessary to save the larger economy, since the losses that would have taken place as a result of the collapse would have been largely limited to Wall Street." Continue reading →

Continue ReadingDavid Stockman on his Book and the Bailouts

Bill Bonner: Where did the US$ 700 billion go?

"You remember TARP? It was the feds' $700 billion program to rescue the US economy from a correction. Neil Barofsky was in charge of it. So we decided to go down and ask him how it turned out: '[..] What did they do with the money? They were supposed to increase lending so as to help bring about a recovery. None of them did that. Instead, they used it to repay each other's loans. In other words, they used it to reduce the amount of credit available...not increase it. And they bought US agency bonds...just as you'd expect. And they paid out their bonuses. In other words, they looked out for themselves...just as you'd expect.'" Continue reading →

Continue ReadingBill Bonner: Where did the US$ 700 billion go?

Treasury: $238b financial bailout ‘avoided catastrophe,’ only $3b outstanding

"The US Treasury said Wednesday the government’s massive response to the economic crisis five years ago paid off, avoiding a catastrophic breakdown of the financial system. In a report marking the anniversary of the bankruptcy of investment bank Lehman Brothers — which snowballed into the worst crisis since the 1930s — the Treasury defended deploying hundreds of billions of taxpayer dollars to save other banks, major financial institutions and auto companies. While the rescue effort required piling up government debt, it was necessary, said Treasury officials who briefed reporters." Continue reading →

Continue ReadingTreasury: $238b financial bailout ‘avoided catastrophe,’ only $3b outstanding