The AIG Bailout Scandal
William Greider
The Nation
August 6, 2010
http://www.thenation.com/article/153929/aig-bailout-scandal

The government's $182 billion bailout of insurance giant
AIG should be seen as the Rosetta Stone for
understanding the financial crisis and its costly
aftermath. The story of American International Group
explains the larger catastrophe not because this was the
biggest corporate bailout in history but because AIG's
collapse and subsequent rescue involved nearly all the
critical elements, including delusion and deception.
These financial dealings are monstrously complicated,
but this account focuses on something mere mortals can
understand-moral confusion in high places, and the
failure of governing institutions to fulfill their
obligations to the public.

Three governmental investigative bodies have now pored
through the AIG wreckage and turned up disturbing facts-
the House Committee on Oversight and Reform; the
Financial Crisis Inquiry Commission, which will make its
report at year's end; and the Congressional Oversight
Panel (COP), which issued its report on AIG in June.

The five-member COP, chaired by Harvard professor
Elizabeth Warren, has produced the most devastating and
comprehensive account so far. Unanimously adopted by its
bipartisan members, it provides alarming insights that
should be fodder for the larger debate many citizens
long to hear-why Washington rushed to forgive the very
interests that produced this mess, while innocent others
were made to suffer the consequences. The Congressional
panel's critique helps explain why bankers and their
Washington allies do not want Elizabeth Warren to chair
the new Consumer Financial Protection Bureau.

The report concludes that the Federal Reserve Board's
intimate relations with the leading powers of Wall
Street-the same banks that benefited most from the
government's massive bailout-influenced its strategic
decisions on AIG. The panel accuses the Fed and the
Treasury Department of brushing aside alternative
approaches that would have saved tens of billions in
public funds by making these same banks "share the
pain."

Bailing out AIG effectively meant rescuing Goldman
Sachs, Morgan Stanley, Bank of America and Merrill Lynch
(as well as a dozens of European banks) from huge
losses. Those financial institutions played the
derivatives game with AIG, the esoteric practice of
placing financial bets on future events. AIG lost its
bets, which led to its collapse. But other gamblers-the
counterparties in AIG's derivative deals-were made whole
on their bets, paid off 100 cents on the dollar.
Taxpayers got stuck with the bill.

"The AIG rescue demonstrated that Treasury and the
Federal Reserve would commit taxpayers to pay any price
and bear any burden to prevent the collapse of America's
largest financial institutions," the COP report said.
This could have been avoided, the report argues, if the
Fed had listened to disinterested advisers with a less
parochial understanding of the public interest.

Fed and Treasury officials dismiss this critique as
second-guessing of tough decisions they had to make in
the fall of 2008, amid the fast-moving global crisis.
Yet two years later, those controversial decisions
remain highly relevant. Public anger has not abated. It
fuels the election turmoil that this year threatens to
bring down incumbents in both parties who voted for bank
bailouts.

Although the AIG bailout was carried out in the waning
days of George W. Bush's presidency, the popular sense
of injustice has deeply scarred Barack Obama, since he
too adopted a forgiving approach toward culpable
financial interests. Obama came to office intent on
restoring public trust in government. His indulgence of
the mega-banks led to the opposite result.

More to the point, the AIG story raises real doubts and
suspicions about how the government will respond next
time. Or whether the new financial reform legislation
actually corrects government's deference to the
pinnacles of private financial power. Massive federal
intervention was certainly necessary, the Warren panel
agrees, including quick action to forestall AIG's
bankruptcy. But government declined to demand anything
in return.

The AIG rescue was done in ways that had "poisonous
effects" on the financial marketplace and public
opinion, the report concluded. Cynical expectations were
confirmed, both for citizens and financial players. Some
financial firms are simply "too big to fail," it seems;
Washington will not let them collapse, no matter what
the president claims.

The most troubling revelation in this story is the
astonishing weakness of the Federal Reserve and its
incompetence as a faithful defender of the public
interest. In the lore of central banking, the Fed is
awesomely powerful and intimidating. As regulator of the
banking system, it has life-and-death influence over
banks. As manager of the economy, it has open-ended
authority to intervene in the financial system to
restore stability, as the central bank did massively
during the crisis.

Yet the Fed was strangely passive and compliant when it
came to demanding cooperation and sacrifice from the
largest financial institutions. Timothy Geithner was
then president of the New York Federal Reserve Bank, the
lead regulator of Wall Street's largest banks. He
briefly insisted they must accept the burden of rescuing
AIG. But the bankers called his bluff and blew him off-
and Geithner deferred to their wishes. The taxpayer
bailout followed. The episode is relevant to the future,
because Geithner is now Obama's Treasury Secretary and
in charge of preventing the next taxpayer bailout.

In the early autumn of 2008, mayhem swept through global
financial markets. It engulfed AIG on Monday morning,
September 15. Lehman Brothers had just failed. Panicky
credit markets were seizing up. American International
Group, largest insurance company in the world, was
hemorrhaging capital, rapidly sinking toward bankruptcy.
At the New York Fed, Geithner had the problem covered,
or so he thought.

Geithner informed top executives of Wall Street's most
important financial houses-Jamie Dimon of JPMorgan Chase
and Lloyd Blankfein of Goldman Sachs-that the banking
industry, not the Federal Reserve, must step up and do
the rescue. Geithner told them it was "inconceivable
that the Federal Reserve could or should play any role
in preventing AIG's collapse."

That Monday morning, Geithner summoned representatives
from Goldman and the JPMorgan bank to Fed offices and
told them to organize a private-sector consortium of
major lenders to provide the emergency liquidity loans
that would keep AIG afloat until things settled down. It
was presumed JPMorgan would be the lead lender; Goldman,
as an investment bank, could help AIG sell off assets to
raise capital. Given the Fed's blessing, other banks
were expected to cooperate.

The New York Fed president did not need to threaten
anyone. This was the gentlemanly way in which the
central bank can invoke its informal authority, with
numerous precedents in the past. Prodded by the Fed and
Treasury, major banks had done something similar back in
1998 to save the hedge fund Long Term Capital
Management, whose collapse threatened a chain reaction
on Wall Street. During the Latin American debt crisis of
the 1980s, the Fed had used its overbearing influence to
make leading US banks grant concessions and write down
outstanding loans-a grudging "workout" that saved
Mexico, Brazil and Argentina from default but also saved
some famous New York banks from imploding.

This time, the entire system was at risk, so virtually
everyone was vulnerable. Geithner expected the biggest
banks to package a substantial bridge loan that would
give AIG the time to sell assets and raise capital, an
orderly resolution. After all, AIG was an insurance
corporation, not a bank. The Fed had no direct
regulatory authority over it. Geithner had gotten an
early glimpse of AIG's troubles in the summer, when its
CEO approached him and asked for access to the Fed's
discount window, the place banks go for short-term
liquidity loans. Geithner turned him down, but learned
how deeply Wall Street and Europe's leading banks were
entwined in AIG's troubles.

The problem was derivatives. During the housing bubble,
AIG had reaped a fortune selling derivative contracts
based on mortgage-backed securities-hedging devices that
made investors feel safe holding these assets. When the
bubble burst and housing securities plummeted in value,
AIG's derivatives became its instrument of self-
destruction. The counterparties, as per their contract,
demanded immediate payment to cover their losses-more
and more capital, as housing prices continued to fall.
Goldman Sachs, almost alone among big banks, had bet
right on the housing bubble. Now it was aggressively
collecting on its bet.

The bankers' committee assembled at the Fed worked all
day and into the night, joined by AIG, the New York
State insurance regulators, with investment bank Morgan
Stanley acting as Treasury's new adviser. The group
drafted a "term sheet" that toted up AIG's exposure. It
would need as much as $75 billion, they estimated.

In Washington, Treasury Secretary Henry Paulson kept his
distance, while fighting other bonfires. Paulson assured
reporters the meeting under way at the New York Fed had
nothing to do with a government bailout for AIG. "What's
going on in New York is a private-sector effort,"
Paulson said.

Sometime after midnight, the bankers called to say,
sorry, they were not interested. There would be no
private-sector rescue. According to Thomas Baxter,
general counsel at the New York Fed, notification came
on Tuesday morning, not from the principal executives of
Goldman and JPMorgan but from a bankruptcy lawyer,
Marshall Huebner, advising JPMorgan on AIG's problems.
The New York Fed immediately hired him as its own lawyer
and proceeded to do what the bankers had refused to do-
bail out AIG.

JPMorgan and Goldman offered no public explanation for
rejecting Geithner's proposal. The public wasn't ever
told the banks were asked to do their part. Nor did
Federal Reserve officials argue with the decision or try
to apply persuasive pressures. It did not put the
squeeze on to convince the bankers they must accept some
kind of sacrifice in the interest of sharing the pain.
Nor did Geithner threaten to pursue an alternative
strategy that could have forced the banks to negotiate
the terms. This was considered out of the question,
though the central bank has employed all these tools on
past occasions.

In a subsequent hearing, Damon Silvers, the AFL-CIO
policy director who is a member of Warren's oversight
panel, asked Baxter, "When you're pulling together the
private sector to solve a problem that they've created
of the type that AIG represented, is it typical to
accept no for an answer?" Baxter fudged. "Well, I
started out by saying there was nothing typical about
the crisis," he replied. He talked in circles and never
answered the question.

If the bankers refused to participate, the Fed had to
move fast to stanch the bleeding. AIG faced another
downgrade from credit rating agencies (the same agencies
that had given triple-A blessings to mortgage
securities). The Fed adopted the bankers' "term sheet"
as its operating guide and swiftly created a revolving
credit fund of $85 billion.

Late on Tuesday, the central bank lent $12 billion to
AIG. The next day, it lent another $12 billion. This was
only the beginning. The AIG operation became a gigantic
spigot for circuitously distributing public money to
private banking interests. As the New York Fed pumped
more money into AIG, the insurance giant pumped it right
out the door to satisfy the demands from counterparties
like Goldman Sachs. Having helped scuttle the private
rescue, Goldman collected $13 billion from this backdoor
public assistance. The Fed did not stop AIG's
hemorrhage. It began financing it, with no questions
asked.

The Fed has always insisted this financial daisy chain
was not designed to pump more capital into the leading
banks. "This was not about the banks," a senior vice
president of the New York Fed told the New York Times.
If not, then why did the Federal Reserve work so hard to
keep their names secret? Fed lawyers labored for months
to prevent disclosure of the beneficiaries. Ranking
Federal Reserve governors coldly rejected as
"inappropriate" the repeated Congressional demands to
know the names. If it wasn't about helping those banks,
why did the Fed not pause to reconsider its initial
decision and develop a less costly approach? It became
instead the paymaster for AIG's failed derivative
contracts-conducting business as usual in the midst of
national emergency.

This process continued for nearly two months and swelled
to horrendous proportions before the Federal Reserve
finally figured out a way to turn off the spigot. In
November, it arranged a complex swap, known as "Maiden
Lane," in which the government paid off counterparties,
acquired the remaining derivative contracts and
extinguished them. The bankers again collected roughly
full value on assets that were then selling in financial
markets for less than 50 cents on the dollar.

The Fed claimed victory for the public, but in reality
the game was already lost, despite the generous public
financing. AIG was facing another downgrade, and
everyone understood this one would probably be fatal-
triggering the bankruptcy the Fed had tried to avoid.
After the bankers had gotten the money, they graciously
agreed to settle.

Back in September, when the Federal Reserve hired
JPMorgan's lawyer as its own, there was no public outcry
because the public didn't know about it. Marshall
Huebner of the law firm Davis Polk & Wardwell was an
expert in corporate bankruptcy and would help the Fed
get up to speed quickly. The arrangement was not illegal
and not unethical, given the precious distinctions the
legal profession makes on ethics. JPMorgan gave its
lawyer consent to switch sides, though Huebner's firm
continued to represent the Morgan bank (Davis Polk
graciously gave the Fed a 10 percent discount of
Huebner's $1,000-an-hour billing rate). The Federal
Reserve limited his advice to AIG matters. Huebner later
also became Treasury's lawyer when it added TARP funds
to AIG, though the Fed and Treasury do not have
identical interests.

What was troublesome about swapping lawyers? There was a
"third client" in this matter-the American public-who
faced huge exposure to losses but didn't have its own
lawyer in the room. The central bank, with its high
sense of rectitude, would insist it represents the
public interest. The Congressional Oversight Panel did
not buy that.

The government, the Warren report said, "put the efforts
to organize a private AIG rescue in the hands of only
two banks, JPMorgan Chase and Goldman Sachs,
institutions that had severe conflicts of interest as
they would have been among the largest beneficiaries of
taxpayer rescue."

Once the immediate panic subsided, the Fed did not seek
out alternative opinions and proposals on what to do
next, either from independent debtor counsel or even
from AIG's bankruptcy lawyer. "By failing to bring in
other players, the government neglected to use all of
its negotiating leverage," the report observed.

In fact, the Congressional Oversight Panel found an
incestuous stew of private financial players in the AIG
case, who switched their allegiance between public and
private roles numerous times. Severely conflicted
loyalties are commonplace on Wall Street. The Fed saw
nothing wrong with it.

Goldman Sachs always claimed it was fully hedged against
loss, even if AIG went bankrupt, but the oversight panel
discovered a crucial gap in its protection. Goldman
would have been more vulnerable if the Fed had succeeded
in arranging a "voluntary" workout by the private banks.
Such a deal could have compelled Goldman and other
counterparties to make concessions-accept a "haircut,"
as Wall Street financiers put it. Goldman helped dump
that possibility.

Morgan Stanley, another investment bank that had its own
near-death experience in the fall of 2008, got a similar
though much smaller benefit while also acting as adviser
to the Treasury Department. The Federal Reserve provided
both Goldman and Morgan Stanley with shelter from the
storm by designating each as a "bank holding company,"
even though neither owned many retail banks. The status
gave them access to emergency loans at the Fed's
discount window-just in case.

JPMorgan Chase was vulnerable in a different way. It was
not a counterparty holding AIG derivatives, but the
Morgan bank was itself the banking industry's largest
issuer of derivatives. It held $9.2 trillion in credit
derivatives-four times its capital assets-and many
trillions more in other forms of derivatives. By its
actions, the Fed greatly reduced the risks for the
Morgan bank.

"The rescue of AIG distorted the marketplace by
transforming highly risky derivative bets into fully
guaranteed payment obligations," the COP explained. "The
result was that the government backed up the entire
derivatives market, as if these trades deserved the same
taxpayer backstop as savings deposits and checking
accounts."

Bankers will be bankers. But what about the Federal
Reserve? The oversight panel expressed sympathy for the
circumstances Fed officials faced, but drew a harsh
conclusion: "By adopting the term sheet developed by the
private sector consortium and retaining most of its
terms and conditions, the Federal Reserve Bank of New
York chose to act, in effect, as if it were a private
investor in many ways, when its actions also had serious
public consequences whose full extent it may not have
appreciated."

That summarizes the moral confusion of the Federal
Reserve. In a state of national emergency, it was acting
under the business-as-usual expectations of the private
financial system, while skipping lightly over the public
consequences. This quality was most clearly demonstrated
in the choices it did not make. The oversight report
explains in detail the alternative approaches the Fed
did not even explore. The central bank has insisted that
none of these were pursued because they were either
unworkable or prohibited. The explanations tend to be
legalistic and narrowly argued in the logic of Wall
Street investors.

To put it crudely, the Fed could have taken some key
players in a back room and discreetly banged their heads
together. Central bankers do this on occasion with
uncooperative bankers. In extreme circumstances, the Fed
can apply formidable powers of persuasion. Most bankers
do not wish to provoke the Fed's disfavor, especially
when the system is wobbly and they might need the
central bank's help to survive. This time the Fed did
not even try.

Timothy Geithner told panel members he does not think it
is the Federal Reserve's role to use the tools at its
disposal to induce the banks it regulates to do
something they do not want to do. That posture
implicitly gives the high ground to the regulated banks-
their choice, not the government's.

Baxter, general counsel at the New York Fed, testified
that the Fed did not seek to pressure banks into
compromising on their contract rights. "We see that as
an abuse of regulatory power," he said. Scott Alvarez,
general counsel for the Federal Reserve Board in
Washington, testified, "We had no legal authority to
force anyone to take actions they did not want to take
and at this time in this economic circumstance, they did
not want to provide assistance to a struggling firm. So
there was nothing more that we could do."

The oversight panel did not accept these claims of
regulatory impotence. Neither do many Wall Street
veterans familiar with the Fed's potential power. Given
the scale of the crisis, the Fed could have decided to
organize a joint public-private consortium to handle
emergency lending for AIG. That inevitably pushes
counterparties to make their share of concessions, like
the "haircuts" creditors typically accept to settle
corporate bankruptcy cases.

The Fed could not force them to accept, but it could
make refusal very awkward. Any holdouts could be "named
and shamed" and held up for public scorn-as bankers who
accepted public bailouts but refused to do their part.
There's nothing irregular about that. Such "workouts"
are standard practice when major creditors have to
resolve problems of indebted companies. Typically they
will settle for less to avoid the enormous costs and
delay of long-running bankruptcy litigation. Martin
Beinenstock of the law firm Dewey & LeBoeuf testified:
"A fundamental principle of workouts is shared
sacrifice, especially when creditors are being made
better off than they would be if AIG were left to file
bankruptcy."

The alternatives described by the COP report are
variations on this same theme of accountability-the
equity of threatened bankers stepping up to "share the
pain" alongside their public benefactors. Any of these
other solutions would have been difficult and involved
mind-bending legal complications. But the reality was
that the largest financial players were far more
vulnerable and dependent on the government than they or
the Fed would acknowledge.

Instead of pumping out more billions, the central bank
could have supplied short-term credit to AIG, while
announcing that this was only a temporary measure to get
through the storm. The Fed could then have declared it
was preparing the insurance company to file for regular
bankruptcy. This would put creditors on notice: they
faced a long and expensive legal tangle in which they
were unlikely to get everything they wanted. That would
give them a strong incentive to negotiate a settlement
for something less than 100 percent. As leading
creditor, the Federal Reserve would have a lot of
influence on the parties the bankruptcy judge helped or
penalized.

This approach was roughly the strategy for bailing out
General Motors. Government expended billions, but it
also claimed the role as the lead player and asserted
control-demanding new management and a thorough
reorganization of the corporation. In this "managed
bankruptcy," every GM stakeholder took a hit-the workers
and shareholders, but also the creditors. Fed defenders
cite legal obstacles that made the AIG case different.
And the Fed was also reluctant to take control of AIG,
even after it became 80 percent owner.

Citing legal inhibitions seems a strange excuse for the
Federal Reserve to invoke. During the larger crisis, the
central bank dispensed trillions of dollars in
imaginative and unprecedented ways, often with no
explicit authority. The law is deliberately vague and
says the Fed can lend to virtually anyone in "exigent
circumstances." The Fed itself gets to define what that
vague phrase means.

The Federal Reserve proved to be a weak and unreliable
regulator for the public interest, but blamed its
weakness on inadequate laws. That excuse has now been
taken away by the new financial-reform legislation,
which gives the central bank more explicit legal
authority to intervene and take control of troubled
financial institutions. The Fed has always been able to
do this-if it had the nerve to use its implicit powers
in strong-armed ways. For longstanding reasons, it has
lacked the will.

The Fed is now in the crosshairs and will be tested by
future events. Officials may issue threats and warnings,
but market players and the general public will remain
skeptical until the central bank actually seizes an
errant financial institution, disassembles its dangerous
elements and shuts it down. That alone is needed to
destroy the cynical assumption among investors,
depositors and bankers that the unacknowledged doctrine
of "too big to fail" still reigns. Taking this action
would of course deliver a great shock to the financial
system. That is why I doubt the Fed will do it.

The Congressional Oversight Panel did not address the
new law and its potential effectiveness. What follows is
my analysis, based on many years of observing the
central bank during its turmoil of the past generation.
The Fed is weak for many reasons, some revealed in the
AIG story, but like any proud institution, it dares not
speak candidly about its predicament. The political
system is likewise still too intimidated to challenge
the myth and mystery, but sharp questions have been
raised since the financial crisis. If I am right, a
stronger reform critique will be forthcoming when the
Fed fails again to put its public obligations ahead of
the banks.

One weakness is embedded in the institutional culture of
the Fed-its chummy relations with the most powerful
institutions and the moral confusion between public
purpose and private returns. In some ways, these traits
date back to the Federal Reserve's origins in 1913, when
this hybrid government agency was created, melding
public and private interests. Regulated bankers
participate side by side with their regulators. The
central bank's obligation to protect the "safety and
soundness" of the financial system often becomes a
euphemism for defending bank profitability. These
qualities might conceivably be bleached away with
fundamental reform of the venerable institution.
Ideally, it could start with the conflicted loyalties so
obvious at the powerful New York Fed.

Even in that unlikely event, the Federal Reserve will
still be handicapped by the other great source of its
weakness-the structural imbalance of power in which the
banking giants can easily outgun their principal
regulator. We saw how that happened in the AIG story
when the bankers called Geithner's bluff, after which he
retreated obediently.

The awkward secret, understood by savvy Fed governors,
is that the central bank has been steadily weakened by
the deregulation of banking and finance over the past
generation. As the Fed was deprived of various control
levers with which it used to discipline the banking
system, private financial power accordingly became
stronger-more reckless and more concentrated at the top.
As the mega-banks allied themselves with unregulated
hedge funds and leverage was multiplied through off-
balance-sheet gimmicks, the system became more powerful
yet also more fragile, a dangerous combination. Some
leaks have been plugged, but not all of them. And
bankers are good at finding new ones.

Savvy bankers understand what Fed officials understand-
the central bankers are trapped in a game of chicken
with important banks that can call their bluff. If the
Fed acts in a prompt fashion to curb or punish reckless
behavior before it get dangerous, the bankers will
accuse it of stifling profit and progress. Bank
examiners are chastened, told to back off.

If the Fed waits too long to intervene, as it regularly
did during the past twenty-five years, then it may be
faced with a far more dangerous situation: given the
globalization of financial markets, the system now
operates with a hair-trigger response to threatening
rumors or disclosures. We saw it happen in the fall of
2008. A broad panic raced around the world, freezing
credit markets, collapsing financial assets and bringing
down major institutions.

This discreet power struggle is never candidly
acknowledged by the governing institutions (who fear it
would weaken them further), but it has fed the growing
instability for several decades. Fed regulators have
lacked the nerve (or the hard evidence) to stop
dangerous practices by banks before they reach the
crisis stage. Yet once calamity appears imminent, it's
feared that taking action might provoke a wider
disaster-a global "run" by investors-since other banks
are engaged in similar behavior.

We might feel more sympathy for the Federal Reserve,
except its leaders have actively contributed to their
predicament. Paul Volcker, Fed chairman in the Carter
and Reagan era, privately grumbled that removing
ceilings on interest rates would weaken the central
bank's hand, but he reluctantly supported it. His
successor, Alan Greenspan, led cheers for liberating the
banks from government regulation. The consequences are
now fully visible.

The first "too big to fail" bailout, of Continental
Illinois Bank in 1984, was supervised by Volcker in
circumstances that would lead to other bailouts in later
years. Volcker knew the Chicago bank was drowning in bad
loans, so he demanded that the board of directors fire
its go-go chairman, Roger Anderson, and start writing
off the bad debt. The directors called Volcker's bluff
and did the opposite. At the climax, Volcker arranged a
federal rescue because he feared several other major
banks were similarly vulnerable. If the Fed didn't
rescue Continental, that could touch off something
worse.

"Yeah, maybe we should have nailed them," Michael
Bradfield, Volcker's general counsel, acknowledged
afterward (reported in my book Secrets of the Temple).
"What are you going to say? Goddamn it, as long as Roger
Anderson is chairman of your bank, we're not going to
lend any money at the discount window? You can say it
and it's pretty intimidating, but the directors can call
your bluff.. as a practical matter, you can't. The
consequences of refusing to supply liquidity support to
a bank are too severe."

In other words, the AIG case was not only about weak
regulators. Geithner was weak and easily spun around by
the bankers, but Volcker was a monumentally tough
regulator, and he made similar decisions when his bluff
was called. That comparison is my evidence for the
structural causes beneath politics and personalities.
Those deeper causes have not been fixed.

Lots of ordinary citizens have figured this out. If some
banks are too big to fail, then government should compel
them to become smaller banks. The harsh reality is that
our bloated financial sector is too large for the
economy it serves, its power too concentrated at the
top. Neither the president nor either political party is
yet ready to face the imperative of breaking up the
mega-banks. Until they do, the system will remain
unstable and prone to excesses, maybe worse.

Meanwhile, the Federal Reserve's dilemma has been made
much larger. It has been given broad discretion to
enforce many structural changes on the financial system.
But discretion can be fatal for regulators, as AIG
illustrated. It asks Fed leaders to get tough with their
principal clients, when Congress didn't have the nerve
to do the same. Congress needs to write hard-nosed laws
with concrete prohibitions and specific enforcement
triggers, not wishful requests. If the Fed again fails
to act, as I fear, another crisis becomes more likely.
If that occurs, the Federal Reserve will be the next big
subject for reform.

_____________________________________________

Portside aims to provide material of interest
to people on the left that will help them to
interpret the world and to change it.

Submit via email: [log in to unmask]
Submit via the Web: portside.org/submit
Frequently asked questions: portside.org/faq
Subscribe: portside.org/subscribe
Unsubscribe: portside.org/unsubscribe
Account assistance: portside.org/contact
Search the archives: portside.org/archive