Apparently the FDIC has a new policy- blame it on the blogs: [Hat tip to Mish!]
The federal agency insuring bank deposits learned that it can’t afford to ignore the blogs following its seizure this month of IndyMac Bank, the largest bank failure since the 1980s.
"The blogs were a bit out of control," Sheila Bair, chairman of the Federal Deposit Insurance Corp., told the San Francisco Business Times after a speech in San Francisco this week.
That’s putting it mildly. Following the FDIC’s takeover of IndyMac on July 11, widely followed blogs were speculating on bank runs on some of California’s largest banks based on nothing more than people waiting for their branch to open or large deposits moving between financial institutions.
The FDIC plans to pay closer attention to the blogosphere in the future.
"We’re very mindful of the media coverage and blogs in controlling misinformation. All I can say is were going to continue to stay on top of it," Bair said. "The misinformation that came out over the weekend fed a lot of depositors’ fears."
Personally, I see a lot more misinformation on the mainstream financial news than I do on the reputable blogs- I wonder why Bair doesn’t doesn’t worry about misinformation in the media, regardless of the source?
In Mish’s post he stated:
When I first saw the headline "The FDIC plans to pay closer attention to the blogosphere" I thought, WOW the FDIC is going to watch the only people that have called the housing bubble and banking problems accurately: blogs.
Silly me. Instead, Sheila Bair wants to shut off the only source of information as to how unsound the banking system and FDIC is.
Doomers- support your local blogs. Do you want to depend on economists and the MSM for your economic information?
twist -
After all, perhaps it’s only fair, as we’ve been busy watching them
Doomers might like to re-read the classic Doom post “Subprime Spillover Discussion - and a Bit of Business” (April 7, 2007)
John-
What is increasingly getting annoying is how selective government agencies are getting in their definition of “misinformation”.
Apparently a comment like:
Is OK, even though a rumor like that can send a stock flying- only to come back down to earth in a couple of days.
Versus a comment like:
That, apparently, is misinformation.
If the FDIC were saying False and inaccurate information drove up this market beyond its fundamentals, and now false and inaccurate information can do the same thing on the way down. We are going to hold ALL media responsible for the veracity of what they publish. that would be one thing, but this is ridiculous.
Why single out bearish comments, but not bullish? Selective banning of shorts, but not longs? Singling out blogs, but not MSM?
It looks to me like the FDIC is more worried about upsetting the apple cart than making sure that people have accurate information to base financial decisions on.
Dear Sheila,
“Why are you yelling at me? I didn’t take the **** from the *** **** water, so don’t go abusing me.”
Canadians will recognize that I chose the moderate response to Ms Bair’s intervention. Is this the sort of thing she doesn’t want to hear?
“What’s up with the covered bond push?”, by London Banker, RGE Monitor, July 25, 2008.
Don’t you love it when bloggers get pissy?
Paulson, Bernanke and Bair! Oh, my!
Here’s another take on blogger chill, and one more kick at that NAB mark-to-market thingie before it disappears down the memory hole.
“Capital Markets in the US are in Complete Shambles”, by Prudent Speculation, iStockAnalyst, July 25, 2008.
John- #4
Mr. Twist loved your quote- now he says he’s trying to decide which to watch while eating his breakfast “Democracy at work” [C-SPAN] or “Pompom TV” [You know.]
He actually just said something from the other room about the Republicans slowing down the Senate vote this morning. Maybe I’d better go see what’s up.
Igor, it’s not “shocking”. Go have a bowl of spam for breakfast and wake up a little.
Remain calm, all is well. (Again, nauseously, Kevin Bacon in Animal House).
Actually I have a better comment for Ms. Bair: Grow up. Lenders and their officers who wildly benefited from the greed frenzy, yet who are now caught up in the emergence of truth, numbers, and economics in their enterprises, need to understand that the pendulum swings both ways. Banks are not public service agencies any more than oil companies are, and yet when the greed and malinvestment practices are discovered, you get after people who are trying to expose and discuss the truth. None of these institutions needed to acquire subprime or Alt-A assets, nor did they need to only maintain minimally conforming capital ratios. Goodbye, Ms. Bair, I hope you weren’t on the public rolls long enough to extract post-employment benefits from U.S. taxpayers.
I am surprised they are giving blogs that much credit. I mean how many unique visitors to blogs could create a run on a bank? And especially in those smaller markets.
The only misinformation allowed will be our misinformation.
BIG BROTHER
agnostic (#6) -
OK, here’s a thought experiment.
Ken runs a hedge fund. Barbie runs an oil company. Ken’s company processes money and Barbie’s processes oil — they are both paid in kind. Both are compensated to the tune of $1.2 billion a year. Every day of the year Ken goes to the office and leaves with a cheque for $3,287,671 in his pocket. Oil is at $150 / bbl. Every day of the year Barbie leaves work in a flat-bed truck trailing 21,918 barrels of oil.
I would suggest the pressure has been falling in the world’s fiscal plumbing recently. Wonder why?
Maybe it’s time we took this fiduciary responsibility thing a bit more seriously.
Why do they get away with it. Because they can. Because they own the system, politicians, media, etc. They control the money, it’s not ours. They that giveth, take awayeth. Its the way the world has always worked.
The best advice I have for the common man is:
a. avoid debt
b. build savings
c. spread risk
d. read blogs
e. and by all means live within it!
John -
I’ve been thinking more and more the last couple of days that we need to have both term limits and an elimination of the two-party system. For whatever that means.
Anybody who suggests that they can keep information off the Internet is showing a complete ignorance of it works. I won’t bore people with the obvious details; suffice to say, you shut one person up and ten will take their place.
As a person who works in tech and knows the underlying system that we call the Internet, I’m constantly dumbfounded by peoples’ lack of understanding of the thing. Heck, it was created by the government! You’d think that they, of all people, would know better.
Sandman,
You’re right. Shut one down and ten will take over. There seems to be some chilling talk going around about silencing different media. Talk radio being one. My theory, don’t look or listen if you’re easily offended. The only problem with the internet is no accountability. But it is what it is. Get over it.
OBEY AUTHORITY
This just in from the Ministry of Truth: “Debt is Wealth!”
Agnostic:
>>I’ve been thinking more and more the last
>> couple of days that we need to have both
>> term limits and an elimination of the two
>>-party system
I think the problems lie moreso in governments always doing special favors to groups that donated more to them, that they used to work for, that they hope to work for after getting out of office, etc.
Even with 3 or 4 parties, all of them could just be pandering to their own corporate bosses.
I’m more hopeful for an easier solution to the madness we have:
either
(1) Completely government-sponsored elections. (ie: people running are not allowed to collect ANY donation whatsoever from anyone, and thus are not accountable to anyone for “favors” when they get in office)
OR
(2) Absolute small-cap limits on political donations (eg. $1000 per person or business), with mandatory FULL database disclosure of every last person that has donated to a political campaign.
Both options should also be followed by much stricter guidelines ensuring that there is not even the slightest APPEARANCE of preferential treatment or favours being exchanged (eg. If you are vice-president, a company you used to head should NOT win billions in no-bid contracts in a war overseas that was started on suspicious grounds).
I would even be happy if politicians were kept on a somewhat generous payroll for a large number of years AFTER they leave office, BUT strictly forbidden from taking up employment elsewhere (ie: ensuring they are not moving on to get a fat-salary from a company in return for the favors they did just as they left office).
By the way, if you are wondering who Bush & Cheney have done favors while is office (that is, if you have been in a coma for the last 8 years), pay attention to who starts paying them $100,000 a pop for speaking at their dinners as of next year ( yes, because we all know they are both brilliant speakers and worth every penny, right?).
Make no mistake - Bush will be keynote speaker at some fancy Exxon galas in the not-so-distant future.
Here’s the word from my favorite business columnist in Denver, Al Lewis
Let’s muzzle truth to avoid meltdowns
http://www.denverpost.com/allewis/ci_10002384
Seems like all this talk about restricting free speech has everyone restless. Just veiled threats or are we staring at the future? What’s it gonna be “America home of the free, land of the brave” or AmeriKa the new Facsism?