Jeffrey Sachs, Not Detail-Oriented

Jeffrey Sachs, a Columbia prof reduced to blogging at The Huffington Post, is drawing traffic with his denunciation of the Geithner-Summers for buying toxic assets.  His concern is insider dealing:

Insiders can easily game the system created by Geithner and Summers to cost up to a trillion dollars or more to the taxpayers.

Here's how. Consider a toxic asset held by Citibank with a face value of $1 million, but with zero probability of any payout and therefore with a zero market value. An outside bidder would not pay anything for such an asset. All of the previous articles consider the case of true outside bidders.

Suppose, however, that Citibank itself sets up a Citibank Public-Private Investment Fund (CPPIF) under the Geithner-Summers plan. The CPPIF will bid the full face value of $1 million for the worthless asset, because it can borrow $850K from the FDIC, and get $75K from the Treasury, to make the purchase! Citibank will only have to put in $75K of the total.

Citibank thereby receives $1 million for the worthless asset, while the CPPIF ends up with an utterly worthless asset against $850K in debt to the FDIC. The CPPIF therefore quietly declares bankruptcy, while Citibank walks away with a cool $1 million. Citibank's net profit on the transaction is $925K (remember that the bank invested $75K in the CPPIF) and the taxpayers lose $925K. Since the total of toxic assets in the banking system exceeds $1 trillion, and perhaps reaches $2-3 trillion, the amount of potential rip-off in the Geithner-Summers plan is unconscionably large.

Insiders can do this easily!  Sachs goes on, without apparent irony:

What is incredible is that lack of the most minimal transparency so far about the rules, risks, and procedures of this trillion-dollar plan.

What is incredible is that a fellow with Sachs' background would tackle this topic without doing the minimum amount of homework about the published rules and procedures. 

Back when the program was announced the Treasury included draft term sheets outlining the conditions for establishing Public-Private Investment Partnerships in both the Legacy Loans and Legacy Securities programs.

Let's see how easy it would be for an insider to set up a scam partnership as described by Sachs; these are the first two paragraphs from the Legacy Loans term sheet, the plan which offers 85% financing:

The FDIC will oversee multiple PPIFs which will be established to own and manage pools of assets. These PPIFs will be vehicles established to purchase pools of loans and other assets from insured depository institutions (“Participant Banks”) under criteria established by the FDIC. Equity in the PPIFs will come from private investors (“Private Investors”) and the UST. The PPIFs will issue FDICguaranteed debt to expand purchasing power.

The FDIC will provide oversight for the formation, funding, and operation of new PPIFs that will purchase assets from banks.

and a bit later:

A third party valuation firm (“Third Party Valuation Firm”) selected by the FDIC will provide independent valuation advice to the FDIC on each Eligible Asset Pool.

...Private Investors may not participate in any PPIF that purchases assets from sellers that are affiliates of such investors or that represent 10% or more of the aggregate private capital in the PPIF.

Each PPIF must agree to waste, fraud and abuse protections to be defined by UST and the FDIC in order to protect taxpayers.

Hard to believe Sachs read that and still thinks it would be easy for Citibank to pull the scam he describes when every step, from the selection of equity investors to the selection of assets to the issuance of FDIC-backed debt is monitored by the FDIC.  Or, it's hard to believe that Sachs thinks that the FDIC has the competence to oversee a reorganization of Citbank but not the competence to prevent an obvious, foreseen, forbidden self-dealing scam.  And I find it hard to believe that a Citi employee would risk a civil suit, fines, and disbarment from the securities industry just to help his employer defraud the US government.

But maybe Sachs was hypothesizing about the Legacy Securities program, where the maximum allowable leverage is 50%.  In that program Citi would have to qualify as a Fund Manager (should be doable); now we have to read all the way to page three to get this:

A Fund Manager may not, directly or indirectly, acquire Eligible Assets from or sell Eligible Assets to its affiliates, any other Fund or any private investor that has committed 10% or more of the aggregate private capital raised by the Fund. Private investors may not be informed of potential acquisitions of specific Eligible Assets prior to acquisition.

So self-dealing is specifically prohibited and would occur under the watchful eye of both Treasury and FDIC.  But other than that, it should be easy.

AS DAY FOLLOWS THE NIGHT:  Paul Krugman endorses the Sachs screed; presumably he has not attempted to familiarize himself with the basic details of this either.  I especially like this:

Jeff Sachs comes down hard on the Geithner plan, and his worries need to be taken seriously.

Not seriously enough to probe whether the Treasury plan is conscious of these issues and attempts to address them, but seriously.

UNREPORTED:  I suggest Sachs devote himself to not researching this possibility - Citigroup could set up fake companies that submit phony credit card bills to Citbank; Citi then bills its cardholders and Citi pockets the extra cash!  Instant recapitalization.

OK, it wouldn't be legal, but don't think of it that way; think of it as gaming the payments system.

Next up - Sachs gets an email from Nigeria!

MORE:  If Conor Clarke is with me, who will stand against me?  And, he is more succinct!  The Anon Lib admits that maybe the Sachs example is not so compelling but is surely correct that other gaming opportunities abound.  Lindsay Beyerstein of Majikthise is clueless:

If this plan is going forward, Congress better be drafting legislation to stop banks from buying up their own overvalued assets with our money through front companies. But if Congress is going to start regulating what kinds of companies bailed-out banks can invest in, why not just nationalize the banks already?

Yeah, we hope Congress gets right on that, even though Treasury and FDIC have already thought about it.  As to the notion that preventing banks from self-dealing is no simpler or more complicated than going ahead and nationalizing them, wow.

And yes - we have been down this road.

Comments

[clarice]

AHA!! Just as I expected TM is....A Geithner tool.AKKKKKKKKKKKKK

[clarice]

Today's project--persuade Paterson to stay in the race for Governor..His dem friends are trying to run him off:
"It took just two months for Paterson's favorability rating to plunge from 54% to 29% - a rate Siena poll spokesman Steve Greenberg called "staggering."

http://www.nydailynews.com/news/2009/04/06/2009-04-06_gov_paterson_gets_message_from_top_democ.html>Stay the course, Gov

[Oldtimer]

I am one of those gazillions of lurkers who come to JOM for insight, wisdom, entertainment and humor. I hope one of you financial whizzes could explain to me why we're not investigating the major players involved in the bank bail-outs. I've smelled rats all over the place since this hideous situation began --- anyone">http://www.marketwatch.com/news/story/new-keating-five/story.aspx?guid={41FFA69F-B034-4940-B7EA-A6B1E219E7FD}&siteid=yahoomy">anyone else smell those rats?

[ajacksonian]

Gotta love Geithner: Head of the NY Fed, causes the problems, designs the bailout, forgets whats in it, decries whats in it, then remembers he might have had something to do with it, and then complains that the previous heads of the Federal Reserve regions were incompetent.

Including himself.

No matter what he comes up with, and it could be 'the perfect plan', he will then forget the details, mess it up, forget about it, have problems pointed out to him, decry the abuses, remember he made it and then blame the incompetence of the Treasury Dept.

Just you wait.

Feiler Faster Thesis at work and that speeds up the churn of everything. In no time at all we will be wondering if Madoff might not have been a better candidate for the Federal Reserve... his skills to convince folks out of money would serve him well on this... send him overseas to get some cash out of other Nations. 'You want to do a G-20? Well, you know you need some money down to play in that club...'

Geithner? He could make the perfect plan and it would still get screwed up.

Just why is Geithner at the Federal Reserve and not the next in line for a perp walk?

[Appalled]

TM:

I fear you have understated the importance and unadulterated brilliance of Dr. Sachs. From his bio at the HufPo (or PuffPo, if you prefer):

Jeffrey D. Sachs is the Director of The Earth Institute, Quetelet Professor of Sustainable Development, and Professor of Health Policy and Management at Columbia University. He is also Special Advisor to United Nations Secretary-General Ban Ki-moon. From 2002 to 2006, he was Director of the UN Millennium Project and Special Advisor to United Nations Secretary-General Kofi Annan on the Millennium Development Goals, the internationally agreed goals to reduce extreme poverty, disease, and hunger by the year 2015. Sachs is also President and Co-Founder of Millennium Promise Alliance, a nonprofit organization aimed at ending extreme global poverty.

He is widely considered to be the leading international economic advisor of his generation. For more than 20 years Professor Sachs has been in the forefront of the challenges of economic development, poverty alleviation, and enlightened globalization, promoting policies to help all parts of the world to benefit from expanding economic opportunities and wellbeing. He is also one of the leading voices for combining economic development with environmental sustainability, and as Director of the Earth Institute leads large-scale efforts to promote the mitigation of human-induced climate change.

In 2004 and 2005 he was named among the 100 most influential leaders in the world by Time Magazine. He was awarded the Padma Bhushan, a high civilian honor bestowed by the Indian Government, in 2007. Sachs lectures constantly around the world and was the 2007 BBC Reith Lecturer. He is author of hundreds of scholarly articles and many books, including the New York Times bestsellers Common Wealth (Penguin, 2008) and The End of Poverty (Penguin, 2005). Sachs is a member of the Institute of Medicine and is a Research Associate of the National Bureau of Economic Research. Prior to joining Columbia, he spent over twenty years at Harvard University, most recently as Director of the Center for International Development. A native of Detroit, Michigan, Sachs received his B.A., M.A., and Ph.D. degrees at Harvard University.

A man of this record and set of globally significant responsibilities does not have time to do research into the plausibility of his great thoughts. He merely thinks, types, and lets memeorandum (and Krugman) do the rest.

There are advantages to an editor, sometimes...

[Rick Ballard]

"received his B.A., M.A., and Ph.D. degrees at Harvard University"

Wow! I don't know if I've ever seen a triply credentialed moron.

[Thomas Collins]

John Kemp makes a persuasive argument that, looking at private debt in addition to public debt, we are in for a time in which bankrupcty, debt restructuring and inflation are necessary to clean up the current mess.

Perhaps Kemp has been discussed before here; if so, I must have missed the discussion. Although Kemp's analysis is big picture, it seems to make sense. Many of us are looking for a "fix" when there is no easy fix during a period of necessary credit contraction.

[Thomas Collins]

The Kemp analysis, if correct, would suggest that G20 is just part of a worldwide Chapter 11 musical chairs game to see which private and public bodies get stuck with a disproportionate share of the mess. With Volcker nowhere in sight and amateurs representing our interests, I fear it is the US that will be left without a chair when the music stops.

[MayBee]

Oh, Heavens, appalled. For a minute I thought you'd written the most hilarious parody ever.

[Charlie (Colorado)]

What is incredible is that a fellow with Sachs' background would tackle this topic without doing the minimum amount of homework about the published rules and procedures.

Frankly, I don't find this astonishing at all. Except for the delay, but then what we saw with the Palin rumors is that they would be stated, debunked, go quiet for a week or so, then be restated as if they were a wild new story. So here's this one, restating something Ezra Klein was pushing a week or so ago -- which was either picked up by JournoList or happened to be repeated by a number of known JournoList members the same day. Now, it reappears, still lacking any sort of thought or independent examination.

But then think about some of the other stories we've been hearing:

- "banks are getting the money and using it to improve their balance sheets" (and it was for what, again?)
- "AIG is getting money and paying it out to banks" (who did they owe it to?)
- "People are getting paid *bonuses*" (Except OMG they were retention bonuses, salary)
- "Why aren't they shutting AIGFP down?" (they are.)

and a dozen others.

[Phelps]

In his defense, if the only thing stopping someone from doing it is the watchful eye of the Fed and Treasury, then I would say this has a very high probability of being successful. It's like plotting a bank robbery... if you can only figure out how to distract Deputy Fife.

[Charlie (Colorado)]

I hope one of you financial whizzes could explain to me why we're not investigating the major players involved in the bank bail-outs.

I'm guessing that you don't have a TV? There are more investigations going on that you can shake a stick at. Try google.

[Charlie (Colorado)]

Wow! I don't know if I've ever seen a triply credentialed moron.

As far as I know, there are only two schools in the US, maybe in the world that will let someone do all three degrees and then teach at the same school. Those being Harvard and MIT. Everyone else feels some breadth of experience is essential.

[Charlie (Colorado)]

TC, have you got a link for that? The other argumens I've seen on that sort of thing haven't been very persuasive, usually depending on things like comparing long-term debt to GDP (read "income").

[Thomas Collins]

TM, and Rick, you are both being too harsh on Sachsie-baby. Aren't you aware that Triple Crimson are not expected to learn how to go to http://financialstability.gov/, find the programs in question and actually read them? As Leona Helmsley might say, that's for the little people!!

By the way, I have LUNed the Financial Stability web site for those non-Triple Crimson out there who actually feel the need to inform themselves on the actual facts, as opposed to the facts as Triple Crimson (and Nobel Prize winning NYT oped writers) conceive them.

[Thomas Collins]

See LUN, CHACO. Perhaps I am wrong that Kemp is using data on total private debt. I am going to reread the article and see if I've missed something.

[matt]

with the bunch of crooks in charge so far, it's plausible. Where has the money gone so far is the $64 question.

[Thomas Collins]

In defense of certain triple credentials, I have found that Triple Eagles (BC, BC High and BC Law) are pretty sensible people. Having no BC or Harvard credentials to my name, I feel I can render these judgments as a non-insider.

[Thomas Collins]

Make that BC High, BC and BC Law. Triple Eagles complete high school before doing the undergraduate thing. :-))

[Oldtimer]

I'm guessing that you don't have a TV? There are more investigations going on that you can shake a stick at. Try google.

I had more in mind, the player's: Geithner, Summers, Paulson, et al, and the Executive Branch..

[cathyf]

Oldtimer, you missed the one I think is the most glaring -- Cuomo who was publicizing the home addresses of the AIG execs was Clinton's HUD secretary. The guy who implemented the CRA revisions after the Boston Fed published their "study" which "showed" that minorities with poor credit ratings were not really deadbeats, so if banks turned them down for mortgages it could only be because the bankers were racists.

[Jim Glass]

What is incredible is that a fellow with Sachs' background would tackle this topic without doing the minimum amount of homework about the published rules and procedures.

I used to think that about Krugman, but ... you know ... it works, as far as getting the big audiences, the million blog hits, appearing with Bono... Sachs is a rock star now. For a guy who doubtless spent most of his life as a high-school math nerd, then as the adult professional version of a high-school math nerd, it has to be intoxicating.

Krugman in his earliest days at Slate once wrote:

I do not think of myself as an all-purpose pundit.

I remember once (during the air phase of the Gulf War) seeing John Kenneth Galbraith making pronouncements on TV about the military situation, and telling friends that if I ever start pontificating in public about a technical subject I don't understand, they should gag me.

In other words, I have nothing to say about awful news that isn't totally obvious.

Wow, a rather different guy. But how many people knew who he was then?

Now he's a big media star -- and Sachs is one of the guys following his lead seeking the psychic and tangible rewards of joining the circus.

[Rick Ballard]

TC,

Kemp is comparing an income statement to a balance sheet. Again. If he wants to play with GDP then he needs to come up with an interest expense item as an offset. If he wants to use a debt number then he might give some thought to finding the asset offset number.

He might also give a nanosecond of thought to the concept that interest expense for Bob is interest income for Bill. Kinda like all that debt liability is on someones books as an asset. It's one of those funny ideas that seem to be mislaid occasionally.

[matt]

it would be nice if we had some good businessmen and accountants in positions of power to be able to explain it to the dimwits in words of two syllables or less.

[matt]

In defense of MIT, TC, I would point out that there are a number of disciplines where there really is nowhere else to do cutting edge work. As to Harvard, there are many alternatives.

[sbw]

Hey! Click and Clack were MIT weren't they?

[Thomas Collins]

Rick, wouldn't there be times in which Bob's interest income isn't supported by productivity gains and expected productivity gains in the future, but, say, by Ben throwing funning money into the picture? And isn't a historical increase in total debt to GDP some indication of this?

Matt, I can't in any way dump on MIT. The MIT folks I have known have been uniformly nice to me. Of course, that may be because their brainpower is so above mine they view me as a humorous pet!

[Thomas Collins]

I meant "funny" money, Rick, but on second thought, "funning" money might work in the context!

[narciso]

I can't be that charitable about Sachs, he was a true believer about austerity plans in Russia, and Bolivia directed by his pals of course, which worked in various degrees to create a backlash that brought forth Putin and Morales. Then like Daniel Ellsberg
he saw the light, and dissavowed everything
he ever thought before

[Rick Ballard]

TC,

Private debt encompasses both personal and business debt. The debt liability in business is generally offset by the value of the asset purchased or created. Your point has some validity wrt personal debt used to "enjoy a lifestyle" which current income does not support but mortgage debt dwarfs consumer credit and cars account for the majority of consumer credit. There are physical assets which must be matched to the debt liability in order for any argument to be coherent wrt "too much" or "too little". There is no question that personal finance interest paid/income ratios are at an all time high but conflating personal and business debt to create a "private" debt/GDP ratio actually tells me absolutely nothing.

[Fresh Air]

The exact thing Sachs writes about was explained in an internet "chalk talk" over a week ago by an economist, or someone who calls himself an economist. I will try to dig up the link. Lucianne had it, I believe. Anyway, not only is the idea wrong, it's not even novel.

[richard mcenroe]

Columbia's Nicky de Genova prayed for 'a million Mogadishus' in Iraq; Geithner seems to be praying for 'a thousand Enrons.'

His plan,coupled with the recent relaxation of 'mark to market' rules seems incredibly dangerous to me.

[richard mcenroe]

Matt, I'm no economist but I watch one on TV: Lemme give it a whack

[Pofarmer]

Pretty good analysis of AIG, CDO, CDS's etc.

From............

Rolling Stone.

LUN.

[Rick Ballard]

TC,

That Fed mortgage debt table is brand new. I could write a great scare story based on the increase from '04-'08. A 33% increase in total mortgage debt outstanding in just five years is rather significant.

I'd also note that the table labeled USDEBT.1 produced by Kemp lists the L.1 table of the BEA NIPA 1.1.5 GDP data as the other. Take a look at his chart and the tables and see if you can make his end points match the data from the FED and BEA. The chart refers to a base of 1952 so the value of a 2008 dollar is .12 cents. I have no idea what the Y axis units are but dollars don't seem to fit.

[narciso]

It leaves out a lot, Po. like the role of Cuomo, Cisneros, and Martinez and Jackson
to be fair, and the Boston Fed study and the CRA revisions, and the role of Gorelick, Johnson, and Co, but it does provide an intriguing motive for the Stevens
prosecutory witchhunt, that it would never had occurred to me, his inquiry into Congressional oversight of the Fed, this is what is called 'burying the lead:

"None other than disgraced senator Ted
Stevens was the poor sap who made the unpleasant discovery that if Congress didn't like the Fed handing trillions of dollars to banks without any oversight, Congress could apparently go fuck itself — or so said the law. When Stevens asked the GAO about what authority Congress has to monitor the Fed, he got back a letter citing an obscure statute that nobody had ever heard of before: the Accounting and Auditing Act of 1950. The relevant section, 31 USC 714(b), dictated that congressional audits of the Federal Reserve may not include "deliberations, decisions and actions on monetary policy matters." The exemption, as Foss notes, "basically includes everything." According to the law, in other words, the Fed simply cannot be audited by Congress. Or by anyone else, for that matter."

It occurs to me that the TARP and the regulatory mechanism attached to the Treasury, is very much like the events
at Jeckyll Isle and the the founding
of the Fed. A totally unaccountable unreviewable institution arising out of a crisis, which of course could never be challenged for their atrocious track record.

[Rick Ballard]

Whoops -

lists the L.1 table of the FedFlow of Funds (Page 58)and the BEA etc.

[Valens]

Isn't this the very same guy who writes a column in scientific american? The one who sid that socialism works well, just look at europe... And then proceeds to bash Hayek, where it was very clear that he hadn't ever read the man's work??? As far as this jackass and his pronouncements are concerned: Consider the source. What a political hacking idiot.

[Pofarmer]

Rick

I posted links here a week or so back to both debt and equity tables. Now, I haven't found much that gives an actual "balance sheet" so to speak. But, what I found, certainly looked like debt climbing at about 2x assets, and that was fairly old data.

[sbw]

Po, Rolling Stone did a better job reporting the first time around with Hunter Thompson's Gonzo journalism.

Now, I wouldn't wrap a fish with it for fear goop would leak out of the holes in the articles.

It's not even good entertainment -- which Thompson certainly offered. I have a Steadman of Leonardo using a drawing machine in my bedroom.

[narciso]

Right, sbw, at least Hunter admitted that drugs 'colored' his perspective, what's Taibbi's excuse, although as the reporter for the trade journal of Sinaloa and Medellin, one wouldn't doubt the same factors are involved.

[Rick Ballard]

Pofarmer,

That's given on the first page of the Flow of Funds:

At the end of the fourth quarter of 2008, the level of domestic nonfinancial debt outstanding was $33.5 trillion; household debt was $13.8 trillion, nonfinancial business debt was $11.1 trillion, and total government debt was $8.6 trillion.
Household net worth—the difference between the value of assets and liabilities—was an estimated $51.5 trillion at the end of the fourth quarter of 2008, $5.1 trillion dollars less than in the preceding quarter. For 2008 as a whole, household net worth fell $11.2 trillion.

There isn't much missing regarding cumulative personal finances between the Flow of Funds data and BEA Personal Income data.

Read the Kemp piece carefully. He's pitching bankruptcy and he has an agenda. It ain't capitalism.

[halo]

There is a informative editorial in the WSJ today by Steven Gjerstad and Stphen L. Smith explaining why some bubbles are more destructive then others. Backed with solid stats and charts.

LUN

[Pofarmer]

Hadn't read the Kemp piece.

Thanks.

[Charlie (Colorado)]

He might also give a nanosecond of thought to the concept that interest expense for Bob is interest income for Bill. Kinda like all that debt liability is on someones books as an asset. It's one of those funny ideas that seem to be mislaid occasionally.

You know, I've wondered about this a lot recently. Best as I can tell, economists sometimes compare deb to GDP because it makes sense to wonder about the capability of the GDP to service the debt.

But then a lot of semi-numerate pundits (and a fair number of people who have been making a living predicting the Great Depression of Next Year for 20 years) use these figure to announce, as we've seen, that the "US is bankrupt" because the NPV of total future obligations like Social Security exceeds the current GDP.

Now, if this were stated in more ordinary terms, like a mortgage, it'd be obviously nuts: if someone has a mortgage for about 2× their gross income, and can service it with 20 percent of their revenue, we don't say they're bankrupt. But put the magical word "GDP" in there and is Something Else.

I suspect Kemp's making the same sort of category error; I'll have to think about it tomorrow though.

[TCO]

You know all this is vastly simplified if you let the market function, RINOs.

[Paul Zrimsek]

Empty sloganizing makes everything easier, come to think of it. Thanks for the tip, TCO!

[Rick Ballard]

"Best as I can tell, economists sometimes compare deb to GDP because it makes sense to wonder about the capability of the GDP to service the debt."

On an income statement GDP would be "total sales or total revenue". While not totally immaterial to the ability to service debt, it wouldn't be dispositive as to the amount of debt that a company could support. That would come at the EBIT line after deducting cost of sales and administrative expenses.

I would argue that the BEA Personal Income and Its Disposition table provides information that is much more relevant to a determination of the ability to service debt. Line 29 (Personal interest payments - Mortgage) divided by Line 26 (Disposable personal income) provides a ratio which is more illustrative than GDP/debt. Unfortunately, the ratio peaked in 1985 and is therefore useless for generating "We're, doomed, I tell ya, doomed" stories. What's worse is that the ratio has already dropped back below the '05 level. It's almost as if some invisible hand were at work.

[rhodeymark]

John Hussman of Hussman Funds isn't too impressed with Geithner's safeguards either. Where did the Financial Times get the idea that they wouldn't sham buy it themselves, but buy from each other? After all, it's a violation. Isn't PIMRock going to "eat them" on behalf of the bondholders? Fabulous! Apparently the Securities side is already drawing a resounding no mas!
LUN

[Pofarmer]

Thinking about the debt numbers. How much of that increase in total personal debt would be the result of car loans going from 2 years to 6-7 and home loans going from 10 years to 30?

[Charlie (Colorado)]

On an income statement GDP would be "total sales or total revenue". While not totally immaterial to the ability to service debt, it wouldn't be dispositive as to the amount of debt that a company could support. That would come at the EBIT line after deducting cost of sales and administrative expenses.

Yup, sure, exactly. I suspect economists use GDP/total debt because they're both relatively precisely measurable and easily available. It's the innumerate who make of it more than it says.

[Charlie (Colorado)]

John Hussman of Hussman Funds

I wondered where he went after Smith Barney folded. He always sounded so impressive on the commercials.

[bad]

I liked him better in "paperchase."

[rhodeymark]

I wondered where he went after Smith Barney folded. Touché
By the same token, his sense of smell should be more accutely tuned to the presence of caveloads of guano.

[rhodeymark]

Oh snap - I just got snarked. No soup for you.

[Rick Ballard]

How much of that increase in total personal debt would be the result of car loans going from 2 years to 6-7 and home loans going from 10 years to 30?

Cars would be Nonrevolving credit. It peaked as a percentage of disposable income in 1966 and is now some 20% lower. It has been much lower than it is now as recently as '99 but it fluctuates with the business cycle.

[TCO]

Let people settle up. There is no Constitutional right of Goldman Sachs to raid taxpayer pockets.

You RINO commy pussy split tails.