Tag: recession

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Education Globalization Reading

Latest read: 13 Bankers

Reading 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown can be considered a good introduction to the country’s long relationship between Wall Street and Congress.  A new reference for how our country began its relationship with Wall Street and the massive changes during the Reagan, Clinton, W. Bush and Obama Administrations reveal how well the financial elite have directed legislation in Congress.
To read about how our republics leaders’ viewed banking was a refresher.  Of course it would be a great insight to hear their views of the 2007-2009 financial collapse and the new banking world we must struggle through.

Clearly Congress was pitched a bill of goods manipulated by Wall Street. That simply bit them in the ass.  I was amused to see how they were asking for the government to bail them out when their house of cards folded in on them.  And yet I’m amused to read and listen to “specialists” or “experts in the field” in the financial marketplace or even the vast field of TV “analysts” who say the government is socialist for ”buying” the banks.

TARP was issued under W. Bush?  If the Treasury did not step in and bail out Wall Street we would be in the middle of a global revolution.  Sure — ignore it all and watch our entire economy totally collapse.

I was impressed with the book’s level of detail surrounding the relationships between W. Bush and Obama’s senior leadership (who transitioned to the Democratic White House) and their twisted histories with the major banks on Wall Street.  Its clear the amount of money funneling through Congress today provides Wall Street with a clear avenue to set policy — and even give away free money.  Well its not exactly free…the money handed to Wall Street to protect their horrible investment decisions on terms they could bargain for collectively.  And of course they all took it.

As Jamie Dimon from JPMorgan Chase stated, somehow during the financial  collapse they managed to have the best year in the company’s history — and paid out billions in bonus compensation while most Americans who purchased their products lost everything:  jobs, mortgages and ultimately their future as a result of the recession that followed.

13 Bankers blog
13 Bankers - Simon Johnson

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Cyberinfrastructure Design Education Globalization Innovation OpenSource Technology

Hot, Flat, and Crowded 2.0

Sometimes a 2.0 release is viewed as a fix for shortcomings in the initial release of just about any product….except this update from Tom Friedman: Hot, Flat, and Crowded 2.0: Why We Need a Green Revolution–and How It Can Renew America.
I quickly read version 1.0 as soon as it hit bookshelves and was just amazed at Friedman’s writing about the state of research, business and culture surrounding our planet. Missed reading this when it was originally released?

Yet as of late I have been reading so much about Wall Street’s clusterf*ck that I missed his update Hot, Flat, and Crowded 2.0: Why We Need a Green Revolution–and How It Can Renew America.

An overview to the version 2.0 release:Friedman explains how global warming, rapidly growing populations, and the astonishing expansion of the world’s middle class through globalization have produced a planet that is “hot, flat, and crowded.”  In this Release 2.0 edition, he also shows how the very habits that led us to ravage the natural world led to the meltdown of the financial markets and the Great Recession.  The challenge of a sustainable way of life presents the United States with an opportunity not only to rebuild its economy, but to lead the world in radically innovating toward cleaner energy.  And it could inspire Americans to something we haven’t seen in a long time—nation-building—by summoning the intelligence, creativity, and concern for the common good that are our greatest national resources.

In vivid, entertaining chapters, Friedman makes it clear that the green revolution the world needs is like no revolution before. It will be the biggest innovation project in American history; it will be hard, not easy; and it will change everything from what you put into your car to what you see on your electric bill. This is a great challenge, Friedman explains, but also a great opportunity, and one that America cannot afford to miss. Not only is American leadership the key to the healing of the earth; it is also our best strategy for the renewal of America.

Or consider the following accolades for his writing:

  • A New York Times Book Review Notable Book of the Year
  • A Washington Post Best Book of the Year
  • A Businessweek Best Business Book of the Year
  • A Chicago Tribune Best Book of the Year
  • A New York Times Book Review Notable Book of the Year
  • A Business Week Best Business Book of the Year
  • A Christian Science Monitor Best Book of the Year
  • A Pittsburgh Post-Gazette Best Book of the Year
  • A Booklist Editors’ Choice Best Book of the Year
  • Finalist for the Dayton Literary Peace Prize
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Education Globalization Innovation Reading

Latest read: On the Brink

A financial crisis is a terrible thing to waste. Treasury Secretary Henry Paulson faced the largest crisis in our country’s modern history with a great opportunity.  His first hand account of the near collapse of our financial economy is detailed in On the Brink: Inside the Race to Stop the Collapse of the Global Financial System.
on the brinkHis strongest writing are the 20 pages in the book’s Afterward, written one year after his departure from Treasury with the opportunity to look back and reflect upon the events and the solutions including TARP and the role of the G20.

Paulson was certainly the right type of person for the job having served as the former Chairman and Chief Executive Officer of Goldman Sachs.  He previously served in the Nixon administration as an assistant to John Ehrlichman during the Watergate scandal.

Although reluctant to accept the job as United States Treasury Secretary under George W. Bush, Paulson acknowledged upon his arrival in Washington a credit crisis was on the horizon.  Clearly Paulson notes he was naive of regulatory powers in Washington and any suggestions of financial reform in an election year were all dead on arrival.

It’s worth repeating that between March and September 2008, eight major US financial institutions failed — Bear Stearns, IndyMac, Fannie Mae, Freddie Mac, Lehman Brothers, AIG, Washington Mutual and Wachovia.  Six of them in September alone.
Paulson jumps right out of the gate on page 1 as all Americans would have wanted:

Do they know it’s coming Hank? President Bush asked me.  “Mr. President we’re going to move quickly and take them by surprise.  The first sound they’ll hear is their heads hitting the floor….For the good of the country I proposed we seize control of the companies, fire their bosses and prepare to provide $100 billion of capital support for each.”

Regrettably its not Wall Street but rather Fannie Mae and Freddie Mac, the government backed lending institutions (GSEs) that Paulson is addressing.  Paulson should could have done the same for Lehman, Bear Stearns.and ALL the other institutions since they received taxpayer money to keep them afloat….on their yachts.
–When you learn that someone at a financial company made a 1 Billion bonus (yes a billion for one person) you can see where the ship was heading…right into the rocks.

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Education Globalization Reading

Latest read: House of Cards

After ripping through Too Big to Fail it seems natural to continue understanding the collapse of Bear Stearns with House of Cards: A Tale of Hubris and Wretched Excess on Wall Street to get a bit under the hood of how the collapse of Wall Street almost killed our economy.  The book’s focus is the last two weeks of life at Bear Stearns.
House of CardsMost would agree Bear Stearns was the “perfect storm” in hilighting whats wrong with Wall Street.  Trusted executives who cannot lead their company or explain products they are selling.

Author William Cohan even points out as Bear Stearns was collapsing two executives were in Nashville playing in a bridge card game tournament.

I was rather amused that with their ‘tough guy’ reputation on Wall Street, in the end the executives at Bear Stearns, facing the closure of their firm were actually considering filing chapter 11 to force a major collapse of the Western financial marketplace.

Known as their “nuclear option” Bear Stearns actually considered triggering the collapse of the US economy because they were unable to secure their quickly falling stock price at an “acceptable” price during negotiations with the Federal Reserve and JPMorgan Chase in their final hours of operations.  And in the end, many of those tough guys ended up crying at their desks.

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Design Education Globalization Innovation Network Reading Technology

Latest read: The Age of Turbulance

I finished Alan Greenspan‘s book The Age of Turbulence Adventures in a New World and learned it was more than I expected from the former Chairman of The Federal Reserve.  And with the recession still in high gear it was also good timing.
The Age of TurbulanceBeyond his sheer volume of knowledge regarding the economy, global markets and international finance I was most impressed with Greenspan’s simple yet immense observation: America needs an overhauled K12 educational system for our country to have a strong economy in 2030.

The impact of Technology, Globalization & Innovation as he outlines should not be overlooked regarding educational reform.  I must admit the real interest for most readers would be to jump the chapter that addresses the recession.  Its worth taking the time to read the book in full.

Greenspan’s impact in Washington, the economy and Republican politics spans Presidential administrations from Nixon to W. Bush.  Greenspan has enjoyed a pretty interesting life.  I was most struck not by his interest in music but rather his high school music partner Stan Getz.  His comments about his role in Y2K for the government and financial markets and the impact of fiber optic networks were welcoming for any geek or fanboy.

There is just a huge amount of economic learning you can pickup from his 25 chapters.  My favorite chapters surprisingly fall in a row:

19. Globalization and Regulation
20. The “Conundrum”
21. Education and Income Inequality
22. The world retires. But can it afford to?

There are some amazing things you can learn from an economist.  His view of W. Bush’s administration and their loss of focus on the economy was eye opening.  Bush never changed any economic plans beyond what he promised during his election campaign.  W. Bush repeatedly ignored The Fed’s view of the sliding economy and needed changes over the close of his Presidency and handed his successor an economy with financial, housing and automotive markets in crisis.

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