Simon Maierhofer has written the article Bank of America: ‘Oops, We Cheated Accidentally’.

I’ll try to capture some key points of what he wrote by quoting some paragraphs in his article.

Unfortunately for BofA, the process of borrowing does not remove the obviously toxic assets from their balance sheets. Those so called unintended mishaps occurred for six quarters from from 2007 to 2009. The classification error involved more than $10 billion in repos.

Of course BofA did not volunteer that information. It was a required response to a courteous letter the SEC sent to 19 large financial institutions inquiring about their repo practices. Can you imagine what kind of information they’d get if the SEC dug even deeper.
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Keep in mind that the combined assets of the four biggest banks are roughly about $7.5 trillion. Assuming those banks overvalue their assets by just 25%, a $1.8 trillion problem is yet waiting to the hit the fan.
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Bear markets are the best auditors. Falling prices reveal the ugly truth of such practices as the BofA story above.

The article Facts Belie GOP Fear-Mongering About Coming Medicare Cuts is written by Rep. Jim McDermott D-Wash., the only psychiatrist among the 16 medical doctors serving in Congress.

Apparently the facts also show that the Republicans are the ones who have done what they accuse the Democrats of having done.  It is amazing that the Republicans know exactly what frightening things to accuse the Democrats of doing,  They only have to go through the list of things that Republicans have done or thought of doing to come up with something,

In 1997, the Republican-controlled Congress passed the Balanced Budget Act (which I voted against) that created something called the Medicare Sustainable Growth Rate, also referred to as SGR. The SGR is an enormously complicated formula that determines how much Medicare will pay a physician for the different services they provide seniors during a doctor’s visit.

Ultimately, the formula has been a disastrous failure and has forced doctors who accept Medicare patients to face ever-increasing pay cuts. Can you imagine if your boss told you that you might soon face a pay cut of as much as 20 percent and to expect more cuts to come down the pike?

To prevent this from happening, Congress has had no choice but to override those cuts in time increments from 1 year down to 30 days. And Republicans have been little help in recognizing the need to correct this very serious problem: just two years ago, the late Sen. Ted Kennedy had to make a surprise appearance on the Senate floor amid his battle with brain cancer to cast the deciding vote to override a pay cut of over 10 percent. His vote was needed because Republicans apparently had no qualms about significantly reducing the pay of the doctors who serve our nation’s senior citizens.

If Republicans are so fearful of cutting Medicare, why did they come up with the above legislation in 1997?

The article Working Together to Address the Failings of the Obama Administration is by Laura Bonham one of the founding members of Progressive Democrats of America.

This is a response to the article I mentioned in the post whose alternative title was There’s Just No Pleasing Some Left Wingnuts.

I find Laura Bonham’s approach to be one that I would more likely want to follow than one of constantly undermining the current Democratic Party.  If you punish your friends equally as you do your enemies, what is the incentive for your friends?

In There’s Just No Pleasing Some Robber Barons, Robert Scheer talks about the displeasure at some of the former corporate backers of Obama at his “unfriendliness” to corporate America.

I suppose I could have made a separate blog post titled “There’s Just No Pleasing Some Left Wingnuts” with a link to the article When Will We Take Responsibility for the Obama Presidency’s Failings? No one is proposing taking actual responsibility. That would be too much like work.

In the article U.S. Delays Test of Device That Could Seal Gulf Well there are two points of view expressed.

Kent Wells, a senior BP vice president, said scientists from the industry and government were reviewing the test procedures. “This test is so important that a decision was made to give them another 24 hours,” he said at a Wednesday morning briefing in Houston. “We don’t want to end up with a test with inconclusive results.”

That is the management point of view from the inappropriately named BP vice president, Kent Wells. Would you delay a test because it might be inconclusive?

Here is the more believable story from way down the chain of command closer to the actual work being done

A technician involved in the effort said that at the center of the debate was the issue of whether shutting in the well was worth the risk. A pressure buildup might damage the well bore, making it more difficult to eventually seal the well through the relief well.

Maybe the technician should be dubbed Mr. Wells.

In the article We’re in a Recession Because the Rich Are Raking in an Absurd Portion of the Wealth Robert Reich explains why growing income inequality is the fundamental problem driving all of our other economic ills.

… when earnings accumulate at the top, people at the top invest their wealth in whatever assets seem most likely to attract other big investors. This causes the prices of certain assets—commodities, stocks, dot-coms or real estate—to become wildly inflated. Such speculative bubbles eventually burst, leaving behind mountains of near-worthless collateral.

In other words, above a certain level of wealth, there is nothing useful left for the wealthy to invest in.

This is another version of the story  Emphasis on Growth Is Called Misguided, which I posted on September 24, 2009. In that post, I mentioned that

This story resonates with what I recently read in the book The Economic Naturalist’s Field Guide: Common Sense Principles for Troubled Times by Robert H. Frank.

The Dodd-Frank Financial Reform Bill is a Valuable Step Forward is the subject of a blog on the Brookings Institution web site. According to the author, Douglas J. Elliott, Fellow, Economic Studies, Initiative on Business and Public Policy

“I believe that the bill, combined with regulatory changes that are in train, will move us perhaps two-thirds of the way from where we are now on financial regulation to where we should be. In the real world, this is grounds for real congratulations. It is impossible to achieve legislative perfection when transforming such a major sector of the economy. In addition to the obvious constraints created by politics and vested interests, we simply do not always know the right answers, given how complex and inter-related modern financial institutions and markets have become. Even experts legitimately disagree on important points.”

It’s only a blog, so don’t expect a lot of detail to back up the opinion of the author..