Obama aides avoid 'are you better off' question

[I AM NOT THAT GUY 5,715]

For President Obama and his aides, the question is not "are you better off now than you were four years ago?"

The question is: Remember how bad the economy was when Obama took office in January of 2009?

"We were this close to a Great Depression, and because of the leadership of this president we staved that off," said senior adviser David Plouffe on ABC's This Week. "We've clearly improved from the depths of the recession."

Obama campaign adviser David Axelrod, who was asked the 'are you better off' question on Fox News Sunday, cited statistics -- 29 straight months of job growth, 4.5 million private sector jobs created on Obama's watch.

"I can say that we're in a better position than we were four years ago in our economy in the sense that when this president took office, we were losing 800,000 jobs a month," Axelrod said.

He added: "I think the average American recognizes that it took years to create the crisis that erupted in 2008 -- and peaked in January of 2009 -- and it's going to take some time to work through it."

http://content.usatoday.com/communities/theoval/post/2012/09/obama-aides-avoid-are-you-better-off-question/1#.UEOBYtYib6M

So, I guess the answer is a sheepish "no".

"Every president since the Great Depression who came before the American people asking for a second term can look back at the last four years and say with satisfaction, you're better off than you were four years ago -- except Jimmy Carter, and except this president." -- Mitt Romney

[웃 910]

Who is not better off than they were 4 years ago?

September 14, 2008

Lehman Files for Bankruptcy; Merrill Is Sold

In one of the most dramatic days in Wall Street’s history, Merrill Lynchagreed to sell itself on Sunday to Bank of America for roughly $50 billion to avert a deepening financial crisis, while another prominent securities firm, Lehman Brothers, filed for bankruptcy protection and hurtled toward liquidation after it failed to find a buyer.

The humbling moves, which reshape the landscape of American finance, mark the latest chapter in a tumultuous year in which once-proud financial institutions have been brought to their knees as a result of hundreds of billions of dollars in losses because of bad mortgage finance and real estate investments.

But even as the fates of Lehman and Merrill hung in the balance, another crisis loomed as the insurance giantAmerican International Group appeared to teeter. Staggered by losses stemming from the credit crisis, A.I.G. sought a $40 billion lifeline from the Federal Reserve, without which the company may have only days to survive.

The stunning series of events culminated a weekend of frantic around-the-clock negotiations, as Wall Street bankers huddled in meetings at the behest of Bush administration officials to try to avoid a downward spiral in the markets stemming from a crisis of confidence.

“My goodness. I’ve been in the business 35 years, and these are the most extraordinary events I’ve ever seen,” said Peter G. Peterson, co-founder of the private equity firm the Blackstone Group, who was head of Lehman in the 1970s and a secretary of commerce in the Nixon administration.

It remains to be seen whether the sale of Merrill, which was worth more than $100 billion during the last year, and the controlled demise of Lehman will be enough to finally turn the tide in the yearlong financial crisis that has crippled Wall Street and threatened the broader economy.

Early Monday morning, Lehman said it would file for Chapter 11 bankruptcy protection in New York for its holding company in what would be the largest failure of an investment bank since the collapse of Drexel Burnham Lambert 18 years ago, the Associated Press reported.

Questions remain about how the market will react Monday, particularly to Lehman’s plan to wind down its trading operations, and whether other companies, like A.I.G. and Washington Mutual, the nation’s largest savings and loan, might falter.

Indeed, in a move that echoed Wall Street’s rescue of a big hedge fund a decade ago this week, 10 major banks agreed to create an emergency fund of $70 billion to $100 billion that financial institutions can use to protect themselves from the fallout of Lehman’s failure.

The Fed, meantime, broadened the terms of its emergency loan program for Wall Street banks, a move that could ultimately put taxpayers’ money at risk.

Though the government took control of the troubled mortgage finance companies Fannie Mae and Freddie Maconly a week ago, investors have become increasingly nervous about whether major financial institutions can recover from their losses.

How things play out could affect the broader economy, which has been weakening steadily as the financial crisis has deepened over the last year, with unemployment increasing as the nation’s growth rate has slowed.

What will happen to Merrill’s 60,000 employees or Lehman’s 25,000 employees remains unclear. Worried about the unfolding crisis and its potential impact on New York City’s economy, Mayor Michael R. Bloombergcanceled a trip to California to meet with Gov. Arnold Schwarzenegger. Instead, aides said, Mr. Bloomberg spent much of the weekend working the phones, talking to federal officials and bank executives in an effort to gauge the severity of the crisis.

The weekend that humbled Lehman and Merrill Lynch and rewarded Bank of America, based in Charlotte, N.C., began at 6 p.m. Friday in the first of a series of emergency meetings at the Federal Reserve building in Lower Manhattan.

The meeting was called by Fed officials, with Treasury Secretary Henry M. Paulson Jr. in attendance, and it included top bankers. The Treasury and Federal Reserve had already stepped in on several occasions to rescue the financial system, forcing a shotgun marriage between Bear Stearns and JPMorgan Chase this year and backstopping $29 billion worth of troubled assets — and then agreeing to bail out Fannie Mae and Freddie Mac.

The bankers were told that the government would not bail out Lehman and that it was up to Wall Street to solve its problems. Lehman’s stock tumbled sharply last week as concerns about its financial condition grew and other firms started to pull back from doing business with it, threatening its viability.

Without government backing, Lehman began trying to find a buyer, focusing on Barclays, the big British bank, and Bank of America. At the same time, other Wall Street executives grew more concerned about their own precarious situation.

The fates of Merrill Lynch and Lehman Brothers would not seem to be linked; Merrill has the nation’s largest brokerage force and its name is known in towns across America, while Lehman’s main customers are big institutions. But during the credit boom both firms piled into risky real estate and ended up severely weakened, with inadequate capital and toxic assets.

Knowing that investors were worried about Merrill, John A. Thain, its chief executive and an alumnus of Goldman Sachs and the New York Stock Exchange, and Kenneth D. Lewis, Bank of America’s chief executive, began negotiations. One person briefed on the negotiations said Bank of America had approached Merrill earlier in the summer but Mr. Thain had rebuffed the offer. Now, prompted by the reality that a Lehman bankruptcy would ripple through Wall Street and further cripple Merrill Lynch, the two parties proceeded with discussions.

On Sunday morning, Mr. Thain and Mr. Lewis cemented the deal. It could not be determined if Mr. Thain would play a role in the new company, but two people briefed on the negotiations said they did not expect him to stay. Merrill’s “thundering herd” of 17,000 brokers will be combined with Bank of America’s smaller group of wealth advisers and called Merrill Lynch Wealth Management.

For Bank of America, which this year bought Countrywide Financial, the troubled mortgage lender, the purchase of Merrill puts it at the pinnacle of American finance, making it the biggest brokerage house and consumer banking franchise.

Bank of America eventually pulled out of its talks with Lehman after the government refused to take responsibility for losses on some of Lehman’s most troubled real-estate assets, something it agreed to do when JP Morgan Chase bought Bear Stearns to save it from a bankruptcy filing in March.

A leading proposal to rescue Lehman would have divided the bank into two entities, a “good bank” and a “bad bank.” Under that scenario, Barclays would have bought the parts of Lehman that have been performing well, while a group of 10 to 15 Wall Street companies would have agreed to absorb losses from the bank’s troubled assets, to two people briefed on the proposal said. Taxpayer money would not have been included in such a deal, they said.

Other Wall Street banks also balked at the deal, unhappy at facing potential losses while Bank of America or Barclays walked away with the potentially profitable part of Lehman at a cheap price.

For Lehman, the end essentially came Sunday morning when its last potential suitor, Barclays, pulled out from a deal, saying it could not obtain a shareholder vote to approve a transaction before Monday morning, something required under London Stock Exchange listing rules, one person close to the matter said. Other people involved in the talks said the Financial Services Authority, the British securities regulator, had discouraged Barclays from pursuing a deal. Peter Truell, a spokesman for Barclays, declined to comment. Lehman’s subsidiaries were expected to remain solvent while the firm liquidates its holdings, these people said. Herbert H. McDade III, Lehman’s president, was at the Federal Reserve Bank in New York late Sunday, discussing terms of Lehman’s fate with government officials.

Lehman’s filing is unlikely to resemble those of other companies that seek bankruptcy protection. Because of the harsher treatment that federal bankruptcy law applies to financial-services firms, Lehman cannot hope to reorganize and survive. It was not clear whether the government would appoint a trustee to supervise Lehman’s liquidation or how big the financial backstop would be.

Lehman has retained the law firm Weil, Gotshal & Manges as its bankruptcy counsel.

The collapse of Lehman is a devastating end for Richard S. Fuld Jr., the chief executive, who has led the bank since it emerged from American Express as a public company in 1994. Mr. Fuld, who steered Lehman through near-death experiences in the past, spent the last several days in his 31st floor office in Lehman’s midtown headquarters on the phone from 6 a.m. until well past midnight trying to save the firm, a person close to the matter said.

A.I.G. will be the next test. Ratings agencies threatened to downgrade A.I.G.’s credit rating if it does not raise $40 billion by Monday morning, a step that would cripple the company. A.I.G. had hoped to shore itself up, in party by selling certain businesses, but potential bidders, including the private investment firms Kohlberg Kravis Roberts and TPG, withdrew at the last minute because the government refused to provide a financial guarantee for the purchase. A.I.G. rejected an offer by another investor, J. C. Flowers & Company.

The weekend’s events indicate that top officials at the Federal Reserve and the Treasury are taking a harder line on providing government support of troubled financial institutions.

While offering to help Wall Street organize a shotgun marriage for Lehman, both the Fed chairman, Ben S. Bernanke, and Mr. Paulson had warned that they would not put taxpayer money at risk simply to prevent a Lehman collapse.

The message marked a major change in strategy but it remained unclear until at least Friday what would happen. “They were faced after Bear Stearns with the problem of where to draw the line,” said Laurence H. Meyer, a former Fed governor who is now vice chairman of Macroeconomic Advisors, a forecasting firm. “It became clear that this piecemeal, patchwork, case-by-case approach might not get the job done.”

Both Mr. Paulson and Mr. Bernanke worried that they had already gone much further than they had ever wanted, first by underwriting the takeover of Bear Stearns in March and by the far bigger bailout of Fannie Mae and Freddie Mac.

Outside the public eye, Fed officials had acquired much more information since March about the interconnections and cross-exposure to risk among Wall Street investment banks, hedge funds and traders in the vast market for credit-default swaps and other derivatives. In the end, both Wall Street and the Fed blinked.

http://www.nytimes.com/2008/09/15/business/15lehman.html?pagewanted=all

[I AM NOT THAT GUY 5,715]

tl:dnr

[slim 1,533]

I pose this question to my lefty-** buddy all the time. I take it a little further back though because he's always talking about the needs of the poor outweighing the right of the rich to keep what's theirs. "But they need that money."

He was previously unaware that entire populations of poor people did not exist prior to government "free money" programs. "But poor people are better off today than they were in the 1950s." Yeah. Keep believing that, buddy.

Lefty-libtards are hilarious. They measure their "success" by how much free money they give away. "Look how many people are on food stamps now. That's obviously a great program because it's working so well!"

How's that kool-aid?

[웃 910]

tl:dnr

Here is the short version

September 14, 2008

Lehman Files for Bankruptcy; Merrill Is Sold

In one of the most dramatic days in Wall Street's history, Merrill Lynch agreed to sell itself on Sunday to Bank of America for roughly $50 billion to avert a deepening financial crisis, while another prominent securities firm, Lehman Brothers, filed for bankruptcy protection and hurtled toward liquidation after it failed to find a buyer.

The humbling moves, which reshape the landscape of American finance, mark the latest chapter in a tumultuous year in which once-proud financial institutions have been brought to their knees as a result of hundreds of billions of dollars in losses because of bad mortgage finance and real estate investments.

But even as the fates of Lehman and Merrill hung in the balance, another crisis loomed as the insurance giantAmerican International Group appeared to teeter. Staggered by losses stemming from the credit crisis, A.I.G. sought a $40 billion lifeline from the Federal Reserve, without which the company may have only days to survive.

The stunning series of events culminated a weekend of frantic around-the-clock negotiations, as Wall Street bankers huddled in meetings at the behest of Bush administration officials to try to avoid a downward spiral in the markets stemming from a crisis of confidence.

"My goodness. I've been in the business 35 years, and these are the most extraordinary events I've ever seen," said Peter G. Peterson, co-founder of the private equity firm the Blackstone Group, who was head of Lehman in the 1970s and a secretary of commerce in the Nixon administration.

Though the government took control of the troubled mortgage finance companies Fannie Mae and Freddie Mac only a week ago, investors have become increasingly nervous about whether major financial institutions can recover from their losses.

What will happen to Merrill's 60,000 employees or Lehman's 25,000 employees remains unclear.

The meeting was called by Fed officials, with Treasury Secretary Henry M. Paulson Jr. in attendance, and it included top bankers. The Treasury and Federal Reserve had already stepped in on several occasions to rescue the financial system, forcing a shotgun marriage between Bear Stearns and JPMorgan Chase this year and backstopping $29 billion worth of troubled assets — and then agreeing to bail out Fannie Mae and Freddie Mac.

Outside the public eye, Fed officials had acquired much more information since March about the interconnections and cross-exposure to risk among Wall Street investment banks, hedge funds and traders in the vast market for credit-default swaps and other derivatives. In the end, both Wall Street and the Fed blinked.

http://www.nytimes.c...?pagewanted=all

[웃 910]

I pose this question to my lefty-** buddy all the time. I take it a little further back though because he's always talking about the needs of the poor outweighing the right of the rich to keep what's theirs. "But they need that money."

He was previously unaware that entire populations of poor people did not exist prior to government "free money" programs. "But poor people are better off today than they were in the 1950s." Yeah. Keep believing that, buddy.

Lefty-libtards are hilarious. They measure their "success" by how much free money they give away. "Look how many people are on food stamps now. That's obviously a great program because it's working so well!"

How's that kool-aid?

What has the genius-right done differently? Which party is the party of fiscal responsibility and budgetary discipline? Which party is known for consecutive surpluses? Which party is known for turning multi-TRILLION projected surpluses into multi-TRILLION actual deficits? Finally, when was the last time a Republican President balanced a budget and what were tax rates back in the glorious 1950s?

Here, take a look at your glorious 1950s tax rates. Reality has a way of dismantling your arguments. Were you and your buddy aware of the rates back then? Still like the 50s?

Edited September 2, 2012 by ☠

[I AM NOT THAT GUY 5,715]

Here is the short version

at the behest of Bush administration

So, your answer to a yes or no question is to blame Bush. I see.

[slim 1,533]

What has the genius-right done differently? Which party is the party of fiscal responsibility and budgetary discipline? Which party is known for consecutive surpluses? Which party is known for turning multi-TRILLION projected surpluses into multi-TRILLION actual deficits? Finally, when was the last time a Republican President balanced a budget and what were tax rates back in the glorious 1950s?

Here, take a look at your glorious 1950s tax rates. Reality has a way of dismantling your arguments. Were you and your buddy aware of the rates back then? Still like the 50s?

Where'd I say anything about parties?

You are part of the problem. You turn this into a party thing instead of stepping back and voting on individual candidates who will do the job. By the way, it was my lefty-** buddy who liked the 50s. Shouldn't be any surprise there since he has no problem with socialism.

[Mr. Big Dog 10,747]

My answer to the yes or no question is YES. I am much better off today than I was 4 years ago. I remember well wondering in early 2009 whether my company would be around tomorrow. Well, we're still around, in 2010 I got the job I've wanted for some time and I got a significant compensation bump with it to boot. My mortgage is still under water but thanks to HARP2 I had the opportunity to refinance at a much lower rate which will help me get out from under water in much less time. What can I say? Life is good.