SCARED OF THE PROBLEMS NOW FACING AMERICA?THE WORST IS YET TO COME.

GREETINGS,

“Stiglitz Says Banking Problems Are Now Bigger Than Pre-Lehman
Share | Email | Print | A A A

By Mark Deen and David Tweed

Sept. 13 (Bloomberg) — Joseph Stiglitz, the Nobel Prize- winning economist, said the U.S. has failed to fix the underlying problems of its banking system after the credit crunch and the collapse of Lehman Brothers Holdings Inc.

“In the U.S. and many other countries, the too-big-to-fail banks have become even bigger,” Stiglitz said in an interview today in Paris. “The problems are worse than they were in 2007 before the crisis.”

Stiglitz’s views echo those of former Federal Reserve Chairman Paul Volcker, who has advised President Barack Obama’s administration to curtail the size of banks, and Bank of Israel Governor Stanley Fischer, who suggested last month that governments may want to discourage financial institutions from growing “excessively.”

A year after the demise of Lehman forced the Treasury Department to spend billions to shore up the financial system, Bank of America Corp.’s assets have grown and Citigroup Inc. remains intact. In the U.K., Lloyds Banking Group Plc, 43 percent owned by the government, has taken over the activities of HBOS Plc, and in France BNP Paribas SA now owns the Belgian and Luxembourg banking assets of insurer Fortis.

While Obama wants to name some banks as “systemically important” and subject them to stricter oversight, his plan wouldn’t force them to shrink or simplify their structure.

Stiglitz said the U.S. government is wary of challenging the financial industry because it is politically difficult, and that he hopes the Group of 20 leaders will cajole the U.S. into tougher action.

G-20 Steps

“We aren’t doing anything significant so far, and the banks are pushing back,” he said. “The leaders of the G-20 will make some small steps forward, given the power of the banks” and “any step forward is a move in the right direction.”

G-20 leaders gather next week in Pittsburgh and will consider ways of improving regulation of financial markets and in particular how to set tighter limits on remuneration for market operators. Under pressure from France and Germany, G-20 finance ministers last week reached a preliminary accord that included proposals to claw-back cash awards and linking compensation more closely to long-term performance.

“It’s an outrage,” especially “in the U.S. where we poured so much money into the banks,” Stiglitz said. “The administration seems very reluctant to do what is necessary. Yes they’ll do something, the question is: Will they do as much as required?”

Global Economy

Stiglitz, former chief economist at the World Bank and member of the White House Council of Economic Advisers, said the world economy is “far from being out of the woods” even if it has pulled back from the precipice it teetered on after the collapse of Lehman.

“We’re going into an extended period of weak economy, of economic malaise,” Stiglitz said. The U.S. will “grow but not enough to offset the increase in the population,” he said, adding that “if workers do not have income, it’s very hard to see how the U.S. will generate the demand that the world economy needs.”

The Federal Reserve faces a “quandary” in ending its monetary stimulus programs because doing so may drive up the cost of borrowing for the U.S. government, he said.

“The question then is who is going to finance the U.S. government,” Stiglitz said.

To contact the reporters on this story: Mark Deen in Paris at markdeen@bloomberg.netDavid Tweed in Paris at dtweed@bloomberg.net

Last Updated: September 13, 2009 14:38 EDT

DeliciousDiggFacebookLinkedInNewsvinePropellerYahoo! Buzz”————————————-MESSENGER ELIJAH MUHAMMAD;”The Fall of America

CHAPTER 62

The Worst is Yet To Come

——————————————————————————–

1 According to radio and television, and according to individual conversation — and according to conversation heard between government officials concerning their problem of trying to find a way to peace for their people — and a way to find stoppage of the fall of their money market and unemployment — and a stoppage to the revolutions between the dissatisfied and the dissatisfied — and to find a way to be able to eat — and to keep the hungry eating from his own labor — pacification is offered but it does not satisfy.

2 With nations rejecting peace offers and nations laughing and making mock of you for ever seeking peace and friendship — as it is written, ‘Peace is desired more than fine gold!’

3 Now to see all of these things coming to pass — things that we did not know that we would see. We did not know that we would see such a Goliath — such a giant — falling.

4 Goliath! who has defied the nations of the earth t come out and fight with them, as Goliath did before Israel. Now, nations make mock of the great giant of the earth, America.

5 The sword within and the sword without! Trouble seems to have no end. And with tens of millions of free Black slaves crying for freedom, justice and equality from the white slave-master — and the white slave-master wanting to deceive the Black slave and make promises that the white slave-master does not intend to fulfill to his free Black slave —

6 And with the free Black slave thinking that he will eat some crumbs of freedom, justice and equality from his white slave-master — the free Black slave will be gravely deceived!

7 The white slave-master cannot free himself from his enemies, not to think of the white slave-master freeing himself from the consequences of the dissatisfied world.

8 So, with “The Worst Yet To Come,” I say to you my Black brothers and my Black sisters fly to Allah; and come follow me! There are some intelligent white people who know and who will bear witness with me that the worst is yet to come!”

Click here for reuse options!
Copyright 2009 Hiram's 1555 Blog