Worse than the US budget: the shadow financial industrial governmental complex

[marmar]

from the Christian Science Monitor:



Worse than the US budget: the shadow financial industrial governmental complex

By Rocky Vega
Guest blogger / February 19, 2010

This was a surprising concept to come across in the Wall Street Journa l… the “shadow government, the financial industrial complex.” Yet, what sounds at first like conspiracy theorizing is actually a sound criticism of the fact that the US government has basically ignored the lessons of the financial crisis and is more or less gearing up for a round two.

Despite entering into the first downturn so recently, and currently watching the Greek meltdown unfold, the US economy is still a mess. Worse still, the financial system has only grown larger, more complex and interconnected, and increasingly risk-seeking in different and dangerously innovative ways.

As described by the Wall Street Journal:

“Our budget deficit is a problem, but it’s not the core issue.

“Our shadow government, the financial industrial complex, is our potential Greece. High unemployment lingers, higher interest rates are on the horizon and U.S. aid to the mortgage markets is coming to an end. Government guarantees in the markets will be withdrawn leaving them exposed to the whims of confidence.

“Amid that uncertain state, Wall Street is chugging along as if the last few years were merely a blip. At Citigroup Inc., the financial innovators are readying a new, complex derivative that would act as kind of financial crisis insurance. Citigroup believes the derivative, dubbed CLX, won’t put Citi or taxpayers at risk, but they concede the contracts aren’t foolproof, a story we’ve heard before.” ............(more)

The complete piece is at: http://www.csmonitor.com/Money/The-Daily-Reckoning/2010/0219/Worse-than-the-US-budget-the-shadow-financial-industrial-governmental-complex

[Vidar]

1. K&R.

[dkf]

2. It is a joke that citigroup of all companies thinks they can insure against financial collapse.

They make me ill.

[Number_Six]

3. And there were those on the Titanic....

...who said "Well, the stern's not underwater, let's go there!"

Ironic. The same gasoline that started the fire is to be used to put it out, eh?

The mind boggles...