Elliot Spitzer versus Jim Cramer
By SusanUnPC on May 13, 2009 at 1:32 PM in AIG, Bailouts, Bank Bailouts, Bank Failure, Economy, TARP, Toxic Assets, Wall Street
I got bored with fast-forwarding through Hannity last night who devoted an unbelievable 45 minutes (!) to the Miss California non-news story, so I checked out Rachel Maddow. Her guest? The always compelling Eliot Spitzer, whose recent remarks to CNN’s Fareed Zakaria were covered at No Quarter in two posts, the last of which was “Class, Required Overnight Reading on “Toxic Assets”and A.I.G. by Spitzer.”
Today, Morning Joe had Jim Cramer on to put out Spitzer’s fire. Who’s right?
Visit msnbc.com for Breaking News, World News, and News about the Economy
versus Jim Cramer:
Visit msnbc.com for Breaking News, World News, and News about the Economy
So, WHO IS CORRECT? My money is on Spitzer.
Spitzer, by the way, is a regular columnist these days for Slate.com.
His latest column is “Fed Dread: The New York Fed is the most powerful financial institution you’ve never heard of. And look who’s running it.”
And you ALL know who used to run the New York Fed, right? Yes, one Timothy Geithner. Here’s why the New York Fed is so important, and why it is ethically compromised. From Spitzer’s latest column, “Fed Dread“:
A quasi-independent, public-private body, the New York Fed is the first among equals of the 12 regional Fed branches. Unlike the Washington Federal Reserve Board of Governors, or the other regional fed branches, the N.Y. Fed is active in the markets virtually every day, changing the critical interest rates that determine the liquidity of the markets and the profitability of banks. And, like the other regional branches, it has boundless power to examine, at will, the books of virtually any banking institution and require that wide-ranging actions be taken—from raising capital to stopping lending—to ensure the stability and soundness of the bank. Over the past year, the New York Fed has been responsible for committing trillions of dollars of taxpayer money to resuscitate the coffers of the banks it oversees.
Given the power of the N.Y. Fed, it is time to ask some very hard questions about its recent performance. The first question to ask is: Who is the New York Fed? Who exactly has been running the show? Yes, we all know that Tim Geithner was the president and CEO of the N.Y. Fed from 2003 until his ascension as treasury secretary. But who chose him for that position, and to whom did he report? The N.Y. Fed president reports to, and is chosen by, the Fed board of directors.
So who selected Geithner back in 2003? Well, the Fed board created a select committee to pick the CEO. This committee included none other than Hank Greenberg, then the chairman of AIG; John Whitehead, a former chairman of Goldman Sachs; Walter Shipley, a former chairman of Chase Manhattan Bank, now JPMorgan Chase; and Pete Peterson, a former chairman of Lehman Bros. It was not a group of typical depositors worried about the security of their savings accounts but rather one whose interest was in preserving a capital structure and way of doing business that cried out for—but did not receive—harsh examination from the N.Y. Fed.
The composition of the New York Fed’s board, which supervises the organization and current Chairman Friedman, is equally troubling. The board consists of nine individuals, three chosen by the N.Y. Fed member banks as their own representatives, three chosen by the member banks to represent the public, and three chosen by the national Fed Board of Governors to represent the public. In theory this sounds great: Six board members are “public” representatives. …
Here’s more from “Class, Required Overnight Reading on “Toxic Assets”and A.I.G. by Spitzer“:
“There should have been a very different regulatory framework. Not in the sense that we needed more words in the books. We needed more aggressive voices at the SEC, the FTC, the OCC – this welter of federal agencies — people who came to Wall Street and said, ‘Wait a minute. That leverage is crazy’. … [E]verybody derided leverage in public, but in private, participated to the hilt. … This was sort of a disease that got into the bloodstream and the DNA of Wall Street leadership. … The more traditional, old-fashioned investment bankers — you think of Felix Rohatyn, who said, ‘Wait a minute, guys. This doesn’t work’.
“AIG is at the center of the web. The financial tentacles of this company stretched to every major investment bank. The web between AIG and Goldman Sachs is something that should be pursued. …
“[A.I.G.'s] fundamental accounting structure was wrong. … [W]e brought a case alleging that they had manufactured false, fictitious reinsurance contracts. … [T]he underlying effort was to create an illusion of financial strength that was not there. … [F]our people have been convicted. …
“[A.I.G.'s problems] stemmed from an effort from the very top to gin up returns whenever, wherever possible, and to push the boundaries [to] garner returns almost regardless of risk. …
“When AIG initially received $80 billion — a decision that was the consequence of a very brief meeting of the president of the New York Fed [GEITHNER], the secretary of the Treasury [PAULSON], perhaps Chairman Bernanke and [some say the] chairman of Goldman Sachs — $80 billion, virtually all of it flowed out to counterparties, $12.9 billion to Goldman Sachs.
“Why did that happen? What questions were asked? Why did we need to pay 100 cents on the dollar on those transactions, if we had to pay anything? What would have happened to the financial system, had it not been paid?”
[...]
(Release: November 13)
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Spitzer broke my political heart (I saw him as President someday). But despite his libidinous adventures I still think he is an incredible public servant. Brilliant, really, from the head up.
Same here. I just wish that Obama would bring him in as an adviser — he’s one of the very few people who could go toe to toe with Tim Geithner. But Geithner will NEVER (!) allow it.
But what WE can do is share Spitzer’s interviews and columns with everyone we know so that people get educated about why — as Spitzer said last night — Wall Street nearly wrecked this country and that there’s NO effective oversight to this day.
I’d rather have someone who has a weakness for women than someone who doesn’t pay his taxes.
People actually watch R Madcow????!
Agree. I’m from Texas, do not condone extramarital affairs, think they are private business between spouses, and would not want a good, smart public servant hounded out of office because of such behavior if no public laws were broken, i.e., using public money to fund trysts.
No one is all good or all bad. Some are mostly good, or mostly bad, like I think bho the fraud and his thugs are. Spitzer’s bulldog reformer’s zeal may finally wake the rest of America up to AIG and other parasites on our national economy.
BTW: There’s a second video of Spitzer, but the questions had to do with his resignation as governor, and if he regrets resigning.
Given all of Paterson’s problems, I wish Spitzer had toughed it out.
I don’t know whether this will make you feel better but…maybe he would not have sufficient time and resources to devote to de-constructing this financial mess for us and providing a roadmap of sorts on how to clean it up, if he had to concentrate on other matters of state…
I’ve admired Eliot Spitzer for a long time and could only shake my head and murmur, there goes a mighty oak (of a political voice) when the scandal broke. I think he’s right, but then Cramer is a buffoon.
His wife, Sila, was reared 25 miles from where I sit and is accomplished in her own right (Harvard Law graduate, if my memory holds here).
Harvard Law grad is correct, but her name is “Silda.”
Like Bill Clinton and other very, very bright and charismatic men, Spitzer suffers from having a mind that needs constant stimulation. Unfortunately, like others he chose the wrong kind of stimulation.
Unlike Clinton, who did not have Spitzer’s law and order demeanor and did whose lisason’s were not illegal, Spitzer’s transgressions will be near impossible to mount a political comeback from.
No doubt, the sherrifs of Wall Street and their friends in the FBI had a hand in bringing him down.
Regardless, few people have spent more time studying the regulatory and reporting practices (and lack thereof) being used by the brokerages and banks. He is far more credible in this regard, than Wall Street Cheerleader Jim Cramer.
The Miss California situation is a huge deal!
Being punished for exercising her rights to free speech is an affront to all Americans.
That is why obama scrubbed any mentioning of prop8 on his web site.
What happened to Miss California by the militants is the beginning of a backlash.
I mentioned this back in December but I was called a gay hater..
I will say it again…keep pushing the envelope of the gay marriage and watch what happens.
Closets may be full again!
I am glad that Hannity, Beck, Miss California, Limbaugh, Trump are all harping on the fact that she has been attacked for having the same exact position as the POTUS.
Except there’s no proof that she was “punished” for her opinion about gay marriage. Regardless of the views she described, her answer was not well delivered. IMO, she’s being used by both sides of this issue.
Uh. I beg to differ. Hilton says she was ahead at this point in the pageant. He gave her a zero (but voted for a president who has the same opinion and without a telepromptr is not much more articulate). So. She is within her rights to claim that the crown was taken away due to her opinion on an issue that has little or no bearing on her “beauty.” I have not heard her make these claims because it would insult the woman who did win. She has more class in her little finger than that butt Perez Hilton has in his self important body. I haven’t visited his website since. He’s an axx.
Many religious, and non-religious, individuals argue from their beliefs that marriage is between a man and a woman. Gay activists argue that marriage is a LGBT right, that banning same-sex marriage is a form of discrimination.
Since I’m for same-sex marriage, I hope individuals can change their minds on this issue. However, yesterday I googled “Same-sex marriage status in the United States by state” and discoverd that 30 states (California is included at this juncture in the list) have banned such marriages by adding an amendment to their state constitutions. 12 of these states are southern and 18 are western (includes mid-west and plains states, and Alaska and Hawaii).
I’ll add 2 other findings:
1. the LGBT community makes up a small percentage of the population, estimates of 4 or 5% (there was difficulty in finding an up-to-date count); therefore, turning over these state bans will take time via millions of people changing traditional mind-sets
2. without the protection of the marriage contract, married gay couples lose in many areas: intestate succession of property, adoption and custody of children, social security payments, income tax reductions, employee family health care (most), public pensions, and estate tax benefits to name a few areas of exclusion.
Of the gay couples I know and have read about, it sure looks like a marriage to me.
We here ought to discuss this issue in a post or open thread.
Where does it stop?
Will the next step be for courts to order religious institutions to allow gay marriages in churches and temples that do not permit them because of religious laws and thereby the very basis of separation of church and state?
There was a woman on cable news yesterday advocating for the right to be married to her husband and her girlfriend at the same time. Polygamy cannot be far away if gay marriage is permitted.
I am very much in favor of gay couples having civil unions and equal protection under the law as married couples do.
You put the stakes out to allowing gays to marry. These marriages can take place at city hall. Polygamy remains illegal.
The limits are re-set. And that’s where it stops.
“And that’s where it stops.”
From your keyboard to a judge’s ear.
Nonsense.
Religious institutions already have the right to refuse to marry people who can get married in a civil ceremony. Ask anyone in a religiously mixed family.
So what’s the difference making that the same for gays?
If that’s where it ends.
I am not sure it will end there.
I agree SM….
Being punished for exercising her rights to free speech is an affront to all Americans.
Bullshit. You’re using that same old fundy straw man argument. NO COURT has ever forced a Catholic church be party to the interfaith marriage of a Catholic to a Baptist, nor has any court ruled that a person wishing to marry someone of another faith be required to change his/her faith in order to fulfill the marriage. There are denominations, and whole religions, where one person may be required to convert to his/her future spouse’s religion in order for the couple to get married in that church.
I have yet to hear of any gay or lesbian couple demanding that they be married inside any specific church, especially one that refuses to accept same-sex marriage. The only people who hold to this outdated bullshit argument are of the same mindset that would have refused service to an interracial couple 50 years ago.
As to this additional crap over polygamy, yes, one person really constitutes a whole movement. The simple reality is that polygamy does exist in this country (and while it’s not legal, the government doesn’t usually go out of its way to prosecute polygamists unless minors are involved–usually in the sense of child “brides”). But, so what? WHO is really hurt by polygamy? Are you? Am I? No. The key point is CONSENT.
If some people would spend as much time worrying about the REAL threats to marriage (like spousal abuse, divorce, infidelity) as they do worrying about same-sex couples getting married, things would be a hell of a lot better.
As to this “civil union” shit, when currently “married” heterosexual couples agree to their being “civilly united” instead of having a *special* term for their state-sanctioned joinings, I’ll be happy to accept civil unions for gays instead of pushing for marriage. (I’d also appreciate those con-servatives most loudly arguing against same-sex marriage agree to put an end to their “serial marriages”. It would also be nice if the Catholic Church would cut out its hypocrisy and religious fiction of “annulment”.)
I got bored with fast-forwarding through Hannity last night who devoted an unbelievable 45 minutes (!) to the Miss California non-news story
The Miss California situation is a huge deal!
Being punished for exercising her rights to free speech is an affront to all Americans.
EXACTLY!!!! For anyone who voices dissent in our ‘new age of hope and change’, it’s piano wire, meat hooks and really lame ‘comedy’.
I agree with you Seattle Moss. This young woman spoke from her heart and was very tactful not to offend those who have a different opinion. And she has been castagated for speaking truthfully. People may not care ’cause it’s only a beauty contest. My feeling is that everybody’s right to free speech needs to be protected. The left has become vile in its attacks on those that don’t agree with them. We remember Hillary and Bill, Joe the Plumber, and of course Gov Palin. I’m not surprised at this point, but disappointed at the deafening silence by “women’s organization. Where is NOW?
Please. That woman’s a damned hypocrite.
She uses her “moral values and beliefs” when they suit her.
Please explain, in as many words as needed, how posing seminude and getting a boob job, and then entering a beauty contest is evidence of her deep values and her Christian heritage.
She has no problems (like so many other religious hypocrites) in picking and choosing the Bible to suit her needs and ignoring those things that don’t.
I’d note that NOW opposes beauty pageants (and has done so, due to their reliance on something incredibly superficial, for decades). Why the fuck should NOW be defending the woman?
Congrats Josef
You have just become the image of Perez Hilton on this blog…
BARF!!
If the Californian beauty queen has a right to her “opinion” , then people have the same right to criticize her.
I am very tired of prejudiced opinions being called “moral truths and values”. It is simple. If one has these prejudicial opinions, then keep them to yourself and out of my life and the law. If you personally don’t believe “gay marriage” is right for you, then simply don’t get one. You may still be married by any Elvis Impersonator of your choice.
The Christian Church was not involved in marriages until the 8th Century. Until then, it was considered to be a matter of the state. The church simply blessed the union if the couple so desired. When the church took on as the sole definer of what is a marriage, it simply was not between a man and a woman, but only certain men and women. In present day Israel, many couples live without being married or travel abroad to be married simply because Israel only legally recognizes religious marriages. However, many couples cannot get their church or temple to marry them because it does not meet the particular “religious definition” of marriage. Therefore, I think some people should be careful of exactly what they wish for, since many of them might not pass the “religious test” themselves.
Getting breast augmentation is unchristian?!
In whose bigoted little world?
What farce.
Prejean answered a question put to her. She was polite, tactful, and honest.
But fascist thugs on the left don’t like her opinion, her personal beliefs, so they’re attacking her like a nest of vipers.
Shame on them all.
I think it is worth remembering after all this melancholy, that it was Spitzer who called himself the “steamroller” if anyone got in his way as Governor. It was Spitzer who was being investigated for a gross misuse of the government to frame other elected officials for which he was well on his way for being impeached. In fact his gross abuse of power could have landed him in jail. And had his sexual escapades not happened he would have been an even bigger embarrassment.
Spitzer is a very bright man who had enormous potential but still has an out-of-control ego.
Before the sexual escapades were realized, Democrats wanted Spitzer out almost as much as Republicans.
Good idea to have him as an advisor as long as he does not have to run for anything.
Very good points, Termo.
Spitzer has me going both ways. In this case, pointing to the Fed, Geithner’s inside track, and the need for systemic change in our regulatory enforcement are good. (But do you expect me to believe he was not part of this racket as governor? Where was he then? Hmm…)
Other times (May 7 on Morning Joe) he has stated our problems stem from capitalism and libertarianism. Which is it–the Fed’s management or capitalism (which we have not had since the Fed’s inception)?
Spitzer is a smart guy–I see some political positioning for a comeback going on here. Regardless, I support anyone who takes on the Fed.
I still haven’t done all of my homework but, I cannot find any inconsistency with Cramer’s statement some big banks are fine and Spitzer’s statement, we’re in a mess. Cramer is basing his conclusion on the fact that, banks that were in trouble because of bad lending practices and received tax bailouts are getting better, even able to absorb other banks; and Spitzer bases his conclusion on the fact that, the infrastructure is the same and so, it is only a matter of time before these businesses, too big to fail, will require another bailout to remain solvent.
Yeah, Susan, I go with Spitzer, too.
The difference is Cramer wants you to buy BOA and Spitzer wants you to beware of the entire freaking potential for further mess down the road. I am in agreement with Spitzer. Cramer is happy to see the chairs reshuffled and calls it change.
I wonder how many of these banks will stand when inflation hits. It will be very hard to sale any paper that only gets you 4 to 5 percent when interest rates are double digits.
The banks sheets look better, but they are holding onto TARP money that makes the balance sheet look better.
They are not lending…And they are holding onto foreclosed homes. Once those foreclosed homes (which are being held as assetts on the balance sheets at inflated values) are released to the market, the balanace sheets drop and home prices depress again.
We are far from recovery and Spitzer knows it. Cramer wants you to put money back in the market. The DJIA is no indicator of where our economy really is.
Spitzer knows this.
Yup. The recent stock market gains were due to the Fed’s expansion of credit. We are a very long way from any recovery.
I just learned this from reading Paul Krugman’s book. (That is, the DJIA does not measure the overall health of the economy.)
Why can’t we go to a system in which all people, homosexuals included, to get the legal and financial benefits of what we now call marriage, must for matter of public interest first get a civil union certificate? If they then want to make it a religious union, they can go to whatever religious authority they want to get the marriage certificate. Then the gay community could fight the religious organizations and leave politics out of it.
I have always felt that gay couples should have the same legal and financial rights that heterosexual couples have. In fact, since I am protesting marriage after two failed ones, I refuse to marry the man I call my husband (my common law he is) simply because my protest is that it should be as hard to get married as it is to get divorced. (My last ex kept me in court for over seven years!) So I often facetiously say I am for gay marriage because gay couples should also have the right to “enjoy” the divorce courts.
The religious ceremony should be different from the civil procedure.
I know this is something others have said, but I just never get a good explanation about why a religious person would oppose that system. I just don’t get it.
The biggest problem comes with that other word “divorce”.
Under a purely religious marriage ceremony, divorce would not be allowed. Some churches can be incredibly harsh on divorced parishioners/congregants (even to a point where both divorcés are forced out of the church) and some denominations would not allow divorce, except where cruelty is involved.
The civil law FINALLY (during the 1960s and 1970s) began excising* itself from the entanglements of religious law by doing away with “fault” divorce. We really do not want a return to those days. No one benefits from a marriage where the couple is largely forced to stay together when they no longer want it.
*I was going to write “divorcing”, but changed my mind.
Spitzer gets my vote too Susan. Thanks, by the way, for offering both videos to contrast the different points of view.
Jim Cramer is a buffoon. The man has no credibility whatsoever. He’s rude; coarse; and a liar, to boot. Spitzer wins this debate hands down.
Elliot spitzer is an idiot he has no idea what is going on in the real world all he is a spoiled rich kid. the only way he know how to conduct business is through blackmail.
This comes from
http://www.stonezone.com
When Governor David Paterson fired the head of the New York Commission on Public Integrity because of the agency’s willful attempt to leak information and derail the Spitzer/Troopergate investigation, he replaced him with… a stooge of Eliot Spitzer.
Although Commission officials were accused of keeping Spitzer’s top aides apprised of material facts uncovered in the investigation, Paterson has appointed Michael Cherkasky, a longtime Spitzer pal and dirty tricks operative.
Spitzer’s right and Cramer’s a piece of shit. This has been another in the series Simple Answers to Simple Questions.