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Dumb things bloggers say

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Alright, I have a mea culpa here. Check out this quote from June 2008:

Bank of America’s Ken Lewis is trying to crack a big nut in taking on Countrywide Financial to its balance sheet. To date, BofA has been fairly successful in limiting its writedowns during this credit crisis, but there are any number of problems attendant with the Countrywide transactions. I thought surely BofA would recognize these risks and back out of the Countrywide deal. But, it looks like full steam ahead. Some of these may cause BofA to be exposed to major financial losses in the future.

-More reason BofA is crazy to take on Countrywide

It’s three years since I wrote that now and I think we are definitely seeing this was the right call. Here’s the thing though: In August – two months later – I wrote:





-Ex-Countrywide CEO is the new Ken Lay

Did you get that last sentence: “But, one thing is for sure: we will see convictions at Countrywide.”

That was dumb. Now I know that the best way to rob a bank is to own one.

Lesson learned.

P.S. – watch Bill Black regale you with tales about the Great American Bank Robbery. That may put some context around how very wrong I was – and also why the President will pay at the polls for high unemployment despite what some polls say. I think James Carville would say: It’s the bailouts, stupid.

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About Edward Harrison



  1. F. Beard

    Now I know that the best way to rob a bank is to own one. Edward Harrison

    Poetic justice, I say. The business model of banks is to steal purchasing power from all money users including and especially the poor (since they are considered less “credit-worthy”) and savers who are not interested in going into debt.

    1. Linus Huber

      Well, that implies that these guys own the bank. In actuality they are not more than employees. The owner of a bank would suffer if the bank would be destroyed. These guys rob and walk away with pockets full of money while the mess they leave behind is for investors and tax payers to resolve. It is poor and simply the clearest form of theft. I am still convinced that once markets drop again relentlessly, the mood will change to pessimistic and those guys will end up in jail.

      1. dearieme

        Quite right: it’s stunning the extent to which executives loot the shareholders – and not just in banks. Company governance law needs reform.

          1. Nathanael

            Because they’re getting cheated.

            Now, I know they say “you can’t cheat an honest man”, but seriously, it’s reasonable to have some sympathy for *anyone* who was cheated.

            The bank execs have been cheating *everyone*, which is quite extraordinary. Normal criminals are careful to only cheat some people. Cheat enough people, eventually you get caught, and then *everyone* wants your head on a pike and you have no defenders. Cheat only one group of people, and behave like a saint to another, and you have defenders.

          2. steelhead23

            A reply to Nathanel below. The bank execs have NOT cheated everyone. Through PACs and other devices, they have enriched, not cheated, politicians. The real trick is knowing who to bribe. They have spent well. Also, there is a kind of extortion going on. All those 401ks in the stock market could be toast if the big boys decided to collapse the market – or, if you go after them, the market would respond badly, it would cause global instability (gasp!), etc. Actually, the elites never actually say these things directly to the president. They merely “explain” the situation to Timmy, and he corrects the president’s thinking. Eventually, taking on the criminal banksters becomes “unthinkable” so their crimes go ignored.

          3. F. Beard


            I draw the line at bank owners. Their business is cheating the entire population.

  2. Jim Tarrant

    Totally agree about your bad call back then but am not sure about how much Obama will lose in the polls. It’s all relative. If the opposition of Obama is truly Neanderthal – and they manifestly are – when even Romney and the other Mormon are buying into Constitutional amendments for balanced budgets, denying the existence of science, and reducing the deficit so unemployment skyrockets even more then the American public are going to vote him back in while holding their collective noses.

    Of course, the problem Obama faces is motivating a totally deflated voting base (democrats and left-leaning indies). This is the real problem not the Repug opposition. If the latter are fired up and the former are dispirited, then he truly has a problem.

    1. James


      SURELY you jest in even asking that question. Right? I find it hard to believe that anyone could even POSSIBLY pose it otherwise.

      1. ambrit

        Dear James;
        Your namesake, James Carville, did indeed point out that “It’s The Economy Stupid!” He was right then, and I’ll wager he is right now. The suggestion made on another thread that all Obama has to do is manufacture another war to whip up a ‘patriotic’ frenzy to insure re-election is what is beginning to worry me. This self absorbed ‘Elite’ wannabe is capable of anything. He has already demonstrated a facility with Doublespeak.

      1. ambrit

        Mr Strether;
        Considering the depths of depravity the banks are sinking to, and the well nigh inevitable ‘correction’ loomimg on our horizon, a berth in GS would seem to be poetic justice. It would be like him visiting the Plain of Jezreel just as the Anti Christs’ motorcade shows up. (Conflation or coincidence? You be the Judge.)

    2. John


      One only needs to ask, “What would Karl Rove do?” to see that that was the entire point of the exercise. They knew the way the winds were blowing in 2008, and that the Bush Administration was just about the most hated in history. The progressives were out in force. What to do? Give them two possibilities (Clinton and Obama) to run under their banner, win and then betray them — poke them in the eye.

      Imagine the hit to the morale. Very few will try that again.

      1. Nathanael

        This remains a stupidly dangerous game to play, given the large numbers of unemployed veterans and unemployed persons with gun training, who were made liberals by Bush. It’s driving people to consider completely outside-the-system action, and that is the *last* thing the powers that be should want.

    1. decora

      Barry: “Too Big to Fail” is a fascinating phrase, people have said it goes back to the Continental Illinois failure in the 80s, but is that true?

      1. Barry Popik

        I wrote a stub of “Too Big To Fail” in 2008. John Cobbs probably coined/popularized the term in his article, “When Companies Get Too Big to Fail,” in Business Week on January 17, 1975:

        There’s also “Too Big To Jail” and “Too Small To Bail” (both from at least 2008):

        FYI, I was reading GLD articles on Zero Hedge yesterday and just did a post on Ponce’s term, “If you don’t hold it, you don’t own it.”

  3. Brick

    There seems to be a belief that Countrywide represented the most obvious case of mortgage fraud and predatory lending, but what we are seeing now is that there were problems with most servicers and even BofA own servicing arm also seems to have fallen foul of not keeping its paper work in order.
    What is most upsetting is that back in 2004 mortgage servicing was already getting in a pickle with its paper work and a set of standards were introduced. Since then we have had a succession of weaker and weaker standards non of which seems to have been followed or enforced. Read the following article if you want to know why the servicers will never correct their methods.

    Politicians have a motive not to correct the problems because it ultimately will cost the person who takes out the mortgage money. They are unable to correct the mispricing of costs without a political backlash, and would prefer to muddle through trying to limit the backlash from bungled paper work and bad practices. The system is that politicians do what is politicially expedient not what is right, which ultimately undermines the rule of law. Some voters will already be picking up on this.

    What we should be seeing is convictions for regulators who have failed to regulate and have colluded with those they are supposed to monitor. The world has been full of those who misguidely thought they could escape the consequences of their actions, so the time to put things right is now. Who knows maybe law enforcement agencies are already upturning stones to see what is underneath.

  4. KnotRP

    [cross posted from CR, for your antidote for not jailing Angelo? No, but worthwhile just the same]

    CNBC just cut off Bob Geldoff before he could finish his little tour through reality….I unmuted for it,
    and couldn’t stop laughing…

    (it’s times like this when a pvr is just so worthwhile, as it can be rewound and played back, and rewound….)

    Tried to type parts of the interview:

    BOB: “…..there is a greater malaise at work here, there is an entire failure of leadership, um…almost globally at
    the moment….I can’t think of a single country where you would recommend political leadership at its zenith,
    um….and there’s a failure to grasp, I think, very fundamental issues, including amongst the media,
    like it’s almost a total collapse of the four estates….the political class has failed, the commercial class
    has failed utterly, the media are a disgrace…they’re so ludicrous….the questions you’re [interviewer] asking
    are the wrong questions, and the clerical class…the churches…have nothing to say.”

    INTERVIEWER: Uh, Bob, what questions should we be asking them, if you say they are the wrong ones?

    BOB: Something a little more fundamental. Something that’s more to do with the 21st century,
    rather than the 20th one. Um, that perhaps…uh…politics as they exist now are in a state of undeniable
    flux but we keep trying to cohere and adhere to an older [unintelligible...] system.
    The economics of now are disrupted by wholly new disruptive technologies. The media can’t come to terms
    with the diffusion of itself, and so any central messages are diluted because of diffusion of the media, and
    that’s true of the politics that we’ve learned to…..accommodate….and the economics, so it’s far more profound…
    existential type of change that’s taking place now, and I think there’s a general confusion….and if you’re unemployed,
    young, and you’re living in a confused social millieu, very few…tiny…people will
    erupt and seek…uh…not escape, it’s the wrong word…but just seek…..[PANIC CUTAWAY]“

    1. Toby

      Thanks KnotRP.

      I agree with Bob Geldoff. We are going through a total collapse of the defining stories of our age. The establishment, composed of the four pillars, as ‘sworn’ defender of these stories, simply cannot be a vehicle for midwifing the new, it can’t even detect the breakdown for what it is, and even if it could perceive what’s going on, would not disseminate this information since such would be a form of suicide.

      I’m convinced the new story will be about cooperation, emergence, steady state growth and abundance (among other things). Embracing it, developing it, nurturing it to robust health, will require a totally new socioeconomics, the dim outlines of which are just visible to us today. The one place we will not see an open discussion of this new paradigm–the establishment–still has considerable control of the debate, of people’s perceptions and interpretations of what is unfolding, but I think this control is unraveling. Deep change is not far off.

      1. KnotRP

        The funny part was CNBC having him on to sell a perspective, and then having to cut away from him because he was already
        off message, and getting progressively more so….it was pure
        comedy gold.

  5. Moneta

    As soon as you bring someone to court, you open the pandora’s box… the truth comes out and write-offs would have to happen.

    As long as we are in bailout and prop-up mode, no huge conviction will happen.

    If events lead to nationalization of write-offs, then we’ll need some scapegoats.

  6. Philip Pilkington

    It takes a big man… good work.

    Funny thing is, I would have agreed with you at the time. Oh, how times have changed, eh? When I were a lad this would have… no, wait, I was a 90s kid. When I were a lad this were hap’nin all the time!

    1. pebird

      I also feel for those poor banks who were forced to make loans to those predatory lenders.

      The title of the post is “Dumb things bloggers say”, not commenters.

      1. Philip Pilkington

        Oh, you misunderstood. He’s not saying a dumb thing. No, ‘he got a dumm thing to say’ — big difference.

  7. NOTaREALmerican

    No worries, Ed, none of us have comprehended just how corrupt the US has become.

    Live and learn, I guess.

  8. Karen Poniatowski

    Don’t despair, Ed. As Ken Lay has proved, the prosecution game doesn’t end until death…and then there’s still the estate to do after…I am in daily expectation that Cheny will either die in prison, or die…

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