Obama, five years after the bankruptcy of Lehman: "We are not where we need to be"

 

The president of the United States, Barack Obama, attends the second day of the G20 summit that hosts the city of St. Petersburg 

US President Barack Obama recalled on Monday the fifth anniversary of the bankruptcy of investment bank Lehman Brother , which triggered the biggest financial crisis since the crash of 1929, and recalled that there is still work to be done to prevent the recurrence of problems that led to those crises.

Obama says that when Lehman filed for bankruptcy he began “the worst crisis of our lives” In a media appearance, the president recalled September 15, 2008, the day the giant Lehman Brothers filed for bankruptcy, as the historical event that led to “the worst economic crisis of our lives”.

“We have cleared the ruins of the financial crisis and we have begun to lay the foundations for a new prosperity and economic growth ,” Obama said today, recalling that the US has once again created wealth and has gone from an unemployment rate of more than 10% to 7.3%.

 

Obama said that since his arrival at the White House in 2009, his priority has been to put an end to the effects of a crisis that ruined large financial institutions, sank Wall Street and brought the US to its worst recession since World War II, effects that They are still noticeable in the global economy.

“In a matter of a few days and weeks of fear, some of the biggest investment banks in the world went bankrupt, markets collapsed and banks stopped giving loans to families and small businesses,” the president recalled. At the end of 2008, the Gross Domestic Product of the first world economy fell at an annualized rate of 8 percent and some 800,000 jobs were destroyed per month, something that dragged all the major world economies and widened with a public debt crisis like the one that suffers Europe.

The president recalled that there is work to be done to reduce inequality in the United States. Obama stressed that his government encouraged spending on infrastructure, on public services, modified mortgage regulations, rescued the automotive sector and got approval for a health reform to extend the medical coverage to the most vulnerable.

However, he acknowledged that “we are not where we need to be” and there is work to be done to reduce inequality in the United States between rich and poor and to put definitively the new banking regulations before the end of the year.

It’s been more than three years since Congress approved the financial reform known as ‘Dodd-Frank’, but even two thirds of the regulations contained in that mammoth legislative project have not been implemented, even though they are seen by the Obama administration as the basis to prevent a new financial collapse .

In a statement, Treasury Secretary Jack Lew described the 2008 crisis as a unique event in modern economic history, which was not due to a single cause, but to an accumulation of “excessive risks, too much debt and a structure regulator out of phase “.

Lew, who was a top investment executive at Citigroup between 2006 and 2008, called for a rush to complete the remaining elements of financial regulations, since “it’s not about writing the new rules and then leaving the field.”

The causes of the crisis now enjoy golden retreats President Obama said that, after the progress of the last five years, many are still “struggling to stay in the middle class” and it is necessary “to put ladders of opportunity for the poorest”, and he recalled that the richest 1% of Americans own 20% of the country’s wealth. With this motive, he requested the commitment of the Congress, especially of the Republican opposition, to approve a budget that replaces the automatic cuts initiated at the beginning of this year, and measures to finance public investments and improvements in education and health.

Meanwhile, five years later, some of the executives in the most relevant positions on Wall Street and responsible for not having warned of the dangers of credit practices too risky, such as “subprime mortgages”, now enjoy golden retreats, remember the means .

Richard Fuld, CEO of Lehman Brothers when he filed for bankruptcy, now owns a discreet firm of advisors and keeps his fortune of more than 500 million he amassed between 2000 and 2007 thanks to practices considered abusive and fraudulent.

Despite the profound changes in Wall Street, many of those responsible for the irresponsible behavior that led to the 2008 crisis have not responded criminally for their management.

Jimmy Cayne, CEO of Bear Stearns, another of the big promoters of “junk mortgages,” retired with a fortune of nearly $ 90 million in premiums and spends his days in bridge tournaments.

 

The Congress will debate on Tuesday the creation of Hispanicbonds and the solution to the preferred ones

The Economy and Competitiveness Committee of the Congress will meet on Tuesday with the aim of discussing, among other issues, the socialist proposal to create Hispanicbonds to support the financing of the autonomous communities, as well as the requests of several parliamentary groups for the Government to give a solution to those affected by the commercialization of preferred shares.

The Economy and Competitiveness Committee of the Congress will meet on Tuesday with the aim of discussing, among other issues, the socialist proposal to create Hispanicbonds to support the financing of the autonomous communities, as well as the requests of several parliamentary groups for the Government to give a solution to those affected by the commercialization of preferred shares.

Thus, the members of this parliamentary committee will meet on Tuesday from 11.30 am to discuss, first, the proposed law of the Plural Left (IU-ICV-CHA) urging the Government to coordinate with the Commission National Stock Market (CNMV) a “comprehensive review” of convenience tests.

The group asks that the “subscription contracts for any financial risk product that are not appropriate to the client’s knowledge profile or the risks that it wants to take,” be sanctioned, and that entities that “ignored the legal requirements for the commercialization of this type of products “.

In the same line, it claims that the CNMV be required to guarantee “in the future” that performs its functions in this matter, and coordinate with the Bank of Spain the necessary actions to guarantee the return of the initial capital. The Plural Left also calls for measures for financial entities to stop “systematically ignoring” the rules of conduct and a Law of Transparency and Quality in the Marketing of Financial Products, to be presented at the next session.

Protection for users

Protection for users

The debate on this issue will not end here, since immediately the Economic Commission will also discuss another initiative, of UPyD on this occasion, on the protection of users of financial products, in which magenta training demands “short” forms , approved and uniforms mandatory use by all financial institutions “for the contracting of this type of securities, as is already done with mortgages.

They also propose that a “greater separation” be promoted from commercialization and financial advisory activities in the entities, and that the Bank of Spain be able to “supervise the remuneration policies of financial entities, which allow them to combat the perverse incentives that generate Short-term behaviors. “

Improving the protection agencies of users of financial services by expanding their powers and means, and studying the possible unification of the currently dispersed investor protection organizations, to increase both their effectiveness and their social visibility, complete UPyD’s initiative .

The subject has already been discussed

The subject has already been discussed

In addition to these initiatives, other groups have presented proposals along the same lines. For example, last March, a proposal by the PSOE was rejected, in which it required guaranteeing the clients who purchased preferential shares the recovery of their initial capital and regulating the information that is given on these financial products.

Before the vote against the PP, the Socialists have chosen to register another proposal in which they ask the Government to prohibit by law the sale of preferred shares to retail investors and to guarantee those who subscribed in the past the return of one hundred percent of the nominal value of these bank securities.

CiU, for its part, has also presented a proposal -which has not yet been debated- requesting the Government to file a file with the banks that sold preferred shares to individual clients, as well as punishing those who may have violated the law, and present a bill of transparency and quality in the commercialization of banking products.

Guindos wants to give you a solution

Guindos wants to give you a solution

In addition, the Attorney General of the State, Eduardo Torres-Dulce, has announced that it is studying civil, and even criminal, to typify the marketing of these products and accommodate a consumer demand in defense of the interests of the consumers and users; and the Economy Minister, Luis de Guindos, acknowledged that “they should never have placed (these titles) among the small saver”, especially when institutional investors were already rejecting them, and promised to seek “an exit as much as possible”. possible “to this situation.

In fact, a subcommittee on Transparency in Information on Financial Products and Mortgages of Credit Institutions has already been constituted in the Congress, under the Economic Commission, which will hold its third session this Wednesday starting at 5:00 p.m. , with the organization of the works as the only point of the day.

HISPANOBONOS

On the other hand, the Economy Committee of Tuesday also has in its agenda the debate of a proposal not law of the PSOE in which urges the Government to negotiate with the autonomous communities within the Council of Fiscal and Financial Policy ( CPFF) the best formula to support the regional debt, either with Hispanic bonds, with guarantees or with direct loans from the ICO or the Treasury.

Its objective is to improve the debt rating of the autonomous communities -which in some cases reaches the ‘junk bond’, worse than that of some of the countries intervened- and to achieve a saving in financial expenditure with which to help achieve the objective deficit of 1.5% this year.

Thus, it is requested to open the possibility to each regional executive to choose the option that best suits them, or even to make a ‘mixed’ of several, between the State issuing debt through hispanobonos and negotiating with the communities how to distribute those funds, that the Treasury or the Official Credit Institute (ICO) go on the market and then grant direct loans to the communities; or that State guarantees are given to the issuance of regional debt.

This same Friday, the Vice President of the Government, Soraya Sáenz de Santamaría, explained in a press conference that the Executive has not yet approved this tool because it requires “punctual” legal changes that are being studied, and not because it is waiting for it to materialize. the sanitation of the bank.

 

the derby against Atlético

There were the knives, including mine, sharpened against Zidane for his disastrous decisions in  , when he suddenly gave Barça a chance to lose in Malaga and covered everything. Definitely, the Gaul is a lucky guy, which is not little in the world of football.

Bale, Benzema and Cristiano

I trust the coach in the gala team, where he left in Milan to conquer the Eleventh . It sounds logical. The shape states gave him equal. Well, it was not all bad, because Madrid dominated, it was better and I think more goal chances. Not many, but more.

Already ahead on the scoreboard, chaos came. It was obvious that Atletico was going to go up to the goal of the tie, the party was crying out to Zidane to get another midfielder to control the ball and his rival. And the Gaul removed Kroos to put Isco. The BBC, untouchable again.

There was a time when the BBC was compared to MSN . Not so long, in fact. Now, it sounds like laughing. To match Cristiano with Messi, you have to be very believing. Comparing the goals scored by Benzema with those of Luis Suárez makes me have homicidal tendencies. And Bale, the only one who could hold the pulse with Neymar, is injured every two times and has become a disaster.

What I mean by this is that Messi, Suárez and Neymar are untouchable and Luis Enrique does well to leave them on the field always, especially in decisive matches. But it is not the same with the trident of Madrid , especially with Benzema and the current Bale. Because the white team has one thing that does not have its eternal rival, a spectacular bench. There’s Isco, asking for more minutes in important matches. And Asensio, all talent. Also Kovacic, an ideal midfielder for the final minutes of matches as against Atlético.

Now comes the game in Munich, against Bayern. There he won 0-4 with the BBC in ’11’, by the way , but it is not advisable to always trust miracles. In this tie, Zidane must decide what kind of coach he wants to be, and that will depend on how many minutes Bale and Benzema play. Because Cristiano is something else.