Out-of-touch millionaires with close ties to Wall Street have steered our economic policy for too long. As Larry Summers leaves the National Economic Council, President Obama should replace him with a real progressive who will stand up to the banks and fight for an economy that works for all Americans.

Municipal bonds are the next housing crisis. Does the Federal government bail out the states?

I’m shocked, shocked to learn from TPM’s Brian Beutler that Republican Minority Leader John Boehner advocated a federal bailout of BP to help them pay the massive bill for damages from their company-caused oil disaster. Then, realizing what he’d just said, Boehner’s spox ran for semantic cover.

Warren Buffet gave a prophetic pronouncement back in 2003 about the Derivatives market, seeing the exponential dangers of this “paper-thin” type of investment.

Buffet did not mince words. He called them “financial weapons of mass destruction“:

Buffett warns on investment ‘time bomb’
BBC – 4 March, 2003

The derivatives market has exploded in recent years, with investment banks selling billions of dollars worth of these investments to clients as a way to off-load or manage market risk.

But Mr Buffett argues that such highly complex financial instruments are time bombs and “financial weapons of mass destruction” that could harm not only their buyers and sellers, but the whole economic system.
[...]

Some derivatives contracts, Mr Buffett says, appear to have been devised by “madmen”. [...]

BBC Link

If there were only some way, to “Hedge that Bet” — against the ever present risk of Foul Weather.

No Worries — Where there’s a Market Risk, there’s always a Wall Street Way!

How does your Obligation to make your Mortgage Payments, turn into some unseen Investor’s “Income Stream”?

Easy — thanks to Derivatives and CDO’s (Collateralized Debt Obligation).

For the mere Price of Admission, those unseen Investor’s get to divvy up your Mortgage Payments, among themselves — long as they “promise to pay off” that Debt, WHEN, for whatever reason, you are no longer able to make those Obligatory Payments …

Piece of Cake!

Geesh … WHAT could ever go wrong with this picture?

We’ve been making believe that all of our problems are simply the result of the last eight years of republican rule and that simply electing democrats was going to ‘fix’ it.

Geithner, Obama Kowtowing to “Massively Corrupted” Banks, Galbraith Says

Why are we avoiding the obvious question; why is the financial sector still making the rules if they have no money?

What are economists saying about the deal? (Hat Tip: Economists View)

1. Krugman [2, 3],

2. DeLong,

3. Economists’ for Obama

4. Interfluidity

5. Justin Fox

6. Adam Levitin

7. Dean Baker