The Bankers Summit and Some Significant No-Shows

Some White House Banking summit.

A one on one with Jamie Dimon and a few second tier, TARP-bound moneylenders.

John Stumpf of Wells Fargo is running late but surely on his way. Tied up signing some last minute foreclosures. The opening topic must be how to spin 26% credit card interest rates as a consumer benefit.

Ken Lewis of Bank of America is there. LOL. Trying to pick up an unemployment check and cop a plea.

It appears that Goldman's Lloyd Blankfein, John Mack of Morgan Stanley, and Dick Parsons of Citgroup will not be able to make the meeting today with The One regarding executive pay and the failure to lend by the Wall Street Welfare Queens.

The excuses are not the usual: end of year performance reviews, too busy with the office redecorators, trying to settle the tab at Scores, on hold with the Neiman Marcus trophy-wife and office-chippy department, making plans to fix the Superbowl.

The boys were flying commerical to show their solidarity with the homeless people who fly coach, and are encountering traffic delays on their flights out of New York to Washington. Reagan National Airport is closed by fog. It doesn't get much more symbolic than that. Are Dulles and BWI are closed too? No. Jeez, these guys don't bother with alternate plans to visit the White House?

"We're sorry Timmy, but frankly the President DID call him a 'fat cat' last night on 60 Minutes. Did you really expect our guy to show up for coffee today like nothing happened? Larry had assured us that he knows his place. Besides, it worked better when he came up to see us the last time anyway."

It would be cool to be sitting at the gate with Lloyd. Think he is schmoozing there with the people? "Bagels and coffees for the terminal, on me."

Jamie did not condescend to act the plebe, and flew down in his corporate jet. And we do think Vikram was particularly ballsy in sending a delegate, executive figurehead, with a note that he is too busy negotiating the repayment of TARP in order to secure those year end bonuses for the troops.

Note to Lloyd and John and Dick, if you are traveling commercial from NYC to Washington in the winter, you take the train. And if flying you leave early or come down the night before, with dinner at The Palm. I recommend the peas and onions as your side. Carville hangs at the bar sometimes. He's a fun kind of guy.

It is always iffy when flying into National in the winter, except on Oligarch Express. Even Senators know that, and their feet barely touch the ground when they walk.

The Wall Street boys don't bother to show up for a command performance at the White House on some lame travel excuse, except for house banker and Treasury Secretary to be Jamie. Lloyd doesn't need to be Treasury Secretary because he already has one.

This is too good. You can't make this stuff up.

Propaganda, Western Style: Moscow Memories II

As regular readers know, Le Proprietaire was doing business in Russia, mostly in Moscow and St. Pete, in the 1990's as part of the overall international business portfolio during his past corporate life.

It was an exciting and somewhat nerve-wracking experience, but one that vividly drove home certain lessons about government, currency, and the resilience of the human spirit that have served well in the following decade. Moscow Memories of 1997

I have to admit I was not aware of this series about Russia by the Wall Street Journal, given a long term preference for The Economist and The Financial Times. Thanks to Zero Hedge for bringing this story about it from The Nation (which I would have never read, being a long time conservative) about the Journal and Steve Liesman to light.

As someone involved there I can say that anyone who did not perceive the growing crisis was living in a bubble, or carrying some particularly optimistic slant in their outlook.

The decline of the Russian economy was oppressive, palpable, almost on everyone's mind. Hard to miss, even at the occasional showy party in English thrown by western corporations for an audience largely made up of ex-pats. The move out of the rouble into just about anything else with substance was becomng a groundswell, later to become unstoppable default. Any presentation about a Russian venture in the 1990's had better contain some plans regarding currency risk.

But why bring this up now? Le Cafe has no particular squabble with the Liesman, and since we do not watch CNBC anymore, are largely immune to whatever it is he says that does not appear in a youtube excerpt, generally involving his getting owned by Rick Santelli.

We bring it up because this article below exposes the typical modus operandi of the Western press, now and over the past twenty years. Carry a party line until the situation explodes, cover it up and distract the public with phony debates and verbal circuses, and then back to give breaking coverage of Armageddon, with a twist of shared guilt. No one is to blame.

Can you remember the coverage of the tech bubble of 2000 by the media? Giddy excitement as the numbers climbed higher, with reassurance as they turned down that this was just a temporary setback.

And I will never forget, as the stocks collapsed and people were wiped out, the CNBC regular arrogantly saying "Well, no one FORCED them to buy those stocks."

Keep this in mind, because we are nearing that point again, with the western media reassuring its public that all is well, while the insiders sell, and the grifters and grafters are draining the nation of its wealth, while the propaganda puppets mouth the slogans of the day. And after it blows up, they will shift gears without an afterthought, keeping the public mind moving on, trusting to the collective amnesia of a distracted populace.

As they said on Bloomberg this morning regarding the crisis just passed, 'We are all to blame; the regulators, the government, the rating agencies, the banks, and the public who was apathetic, who failed to act."

And then they moved on to let us know that Ashley Dupre will be providing a weekly advice column in the NY Post. Romance with a financial twist?

The difference here, at least it seems to me, is that the American public is still a believer in what the government says. The Russian people, at least by that time, did not. So perhaps there are a few more good years left.

The Nation
The Journal's Russia Scandal
By Matt Taibbi & Mark Ames
October 4, 1999

Just before Christmas in 1997, as a tumultuous stock-market
crisis ravaged emerging markets in every corner of the globe, readers of the
Wall Street Journal were treated to some good news: Russia was going to emerge
from the mess unscathed. While conceding that "few debt markets outside
Southeast Asia were hit harder by recent financial turmoil than Russia's," the
Journal's Moscow bureau chief, Steve Liesman, added quickly that "many analysts
believe an equally strong rebound may be in the offing." Moreover, Liesman
wrote, investors were rapidly coming to the realization that "Russia's problems
are far different and, for the moment, less dire than those that undermined
Asian economies." The December 16 piece was headlined, "Russian Debt Markets Due
for Rebound."

A few weeks later, Liesman and the Journal used even
stronger language to trumpet Russia's economic merits. They chided investors who
were too busy "fretting over Asia's financial crisis" to notice what they called
"one of the decade's major economic events: the end of Russia's seven-year
recession."

The Journal's prediction was more than a little precipitate.
Instead of getting better, things in Russia got worse. A lot worse. Nine months
after Liesman declared that Russia's debt market was due for a rebound, and just
over seven months after proclaiming the end of the Russian recession, the
Journal--like most US newspapers--found itself having to explain the near-total
collapse of Russia's economy and capital markets...

Read the rest here: The Journal's Russia Scandal - Matt Taibbi, The Nation 1999

Reading for the Weekend

"The people asked him, “What should we do?”

He replied, “If you have two shirts, give one to the poor. If you have food, share with those who are hungry.”

Even public officials came to be forgiven and asked, “Teacher, what should we do?”

He replied, “Collect no more than the law requires, do not engage in graft and corruption.'

And What should we do?” asked some soldiers and peacekeepers.

John replied, “Do not extort money or make false accusations. Be content with your just wages.”

Luke 3:10-14

The Trend in the Freddie Mac US Housing Price Index

I suspect that the US Treasury and the Fed will continue to monetize the decline in housing prices and the mortgage market. We may see an inflation so that this trend is never realized in nominal values. Ultimately, the government may bury most of the losses in a currency devaluation.

US Housing: Four More Years to Fall - Michael White

"The exhaustive Freddie Mac price index fell 2% nationwide in the 3rd quarter and analysis of its data predicts prices will continue to fall for the next four years.

While Freddie announced Tuesday that its purchase-only index has gained for the past two quarters, the “Classic Series” of the Conventional Mortgage Home Price Index, which includes refinance appraisals as well as purchase values, has fallen 9% from the high in June 2007 and 3.8% for this year.

The projections say homeowners have lost only $1 for every $3 they can expect to lose in the end.

The trends show values will fall for four years through September 2013. Readers should take this estimate as an educated guess. The estimate may have greater relevance than forecasts described in mainstream-media headlines which typically fail to place new data within a long-term trend..."