The Political Bridge

McClatchy Newspapers: The Goldman Sachs Group Bet Secretly on an U.S. Housing Crash

WASHINGTON — In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting.

Goldman's sales and its clandestine wagers, completed at the brink of the housing market meltdown, enabled the nation's premier investment bank to pass most of its potential losses to others before a flood of mortgage defaults staggered the U.S. and global economies

Are President Obama's New Small Business Adminstration's(S.B.A.) Initiatives Intended as a Political Plum for Senator Olympia Snowe?

 The New York Times, October 21, 2009

What is striking about the S.B.A. initiatives is not just the size of the increases but whom they appear meant to impress. The new loan limits closely track increases proposed by Olympia Snowe, the senator from Maine (who was the only Republican to vote for the Baucus Health-Care Bill...

In August, Ms. Snowe introduced legislation titled the “Next Step for Main Street Credit Availability Act of 2009.”

(Click Senator Snowe to read more about this Act)

Former Federal Reserve Chief, Paul Volcker, Wants to Break Up the Big Investment Banks: The Obama Administration is Saying NO

(Former Fed Chief Paul Volcker is another hero of mine. I believe that it was he not Ronald Reagan that safe the American economic system during the 1970s and 1980s period of stagnation, DrTed)

From the NY Times, October 20, 2009

The aging Mr. Volcker (he is 82) has some advice, deeply felt. He has been offering it in speeches and Congressional testimony, and repeating it to those around the president, most of them young enough to be his children.

He wants the nation’s banks to be prohibited from owning and trading risky securities, the very practice that got the biggest ones into deep trouble in 2008. And the administration is saying no, it will not separate commercial banking from investment operations...

The Kentucky Retirement Systems Makes First Hedge Fund Move with Arrowhawk Capital Partners's First Hedge-Fund Plan

Pensions and Investments: October 1, 2009

 Kentucky Retirement Systems, Frankfort, will invest up to $200 million in a direct investment in Arrowhawk Capital Partners’s first hedge fund, Durable Alpha, which launched Sept. 1.

The hedge fund investment is the first for the $12 billion system.

Funding comes from a 5% target allocation to absolute-return strategies approved by KRS’ investment committee in February, CIO Adam Tosh said in an interview.

The Arrowhawk Durable Alpha Fund is a core, risk-controlled, multistrategy hedge fund open to institutional investors and sovereign wealth funds.

BBC: Professor Roubini Says "The World's Economic Crisis is Not Yet Over;" When Professor Roubini Speaks, Knowledgeble People Listen

Nouriel Roubini told the BBC that he is concerned about the growing gap between the "bubbly and frothy" stock markets and the real economy.

Over the last six months, the Dow Jones Industrial Average has risen about 45%.

But Mr Roubini says he sees an economy where consumers are "shopped out" and "debt burdened".

Based on the run up in share prices in recent months, investors appear to be betting that good times are around the corner. A view not shared by Mr Roubini. "The crisis is not yet over," the New York University professor said.