That said, I think part of the business community’s complaint about Obama has merit. Although there are many “innovation” initiatives ongoing in this administration, they are not well coordinated or a top priority or championed by knowledgeable leadership. This administration is heavily staffed by academics, lawyers and political types. There is no senior person who has run a large company or built and sold globally a new innovative product. And that partly explains why this administration has been mostly interested in pushing taxes, social spending and regulation ”” not pushing trade expansion, competitiveness and new company formation. Innovation and competitiveness don’t seem to float Obama’s boat. He could use a buoyant growth strategy.

What might that include? I asked two of the best people on this subject, Robert Litan, vice president of research and policy at the Kauffman Foundation, which specializes in innovation, and Curtis Carlson, the chief executive of SRI International, the Silicon Valley-based innovation specialists.

Carlson said he would begin by creating a cabinet position exclusively for promoting innovation and competitiveness to ensure that America remains “the world’s new company formation leader.” “Secretary Newco” would be focused on pushing through initiatives ”” including lower corporate taxes for start-ups, reducing costly regulations (like Sarbanes-Oxley reporting for new companies), and expanding tax breaks for research and development to make it cheaper and faster to start new firms. We need to unleash millions of entrepreneurs.

Read it all.

In light of the current financial crises, many banks are starting to turn down students’ requests for loans. In some cases, before a degree is even earned. Without a job and without a degree to, presumably, get a higher paying job, these people are left without a way to repay their debts. And, it gets worse”¦.

Whereas the homeowners who defaulted on their loans were able to declare bankruptcy in many cases, student loans cannot be discharged by bankruptcy. In turn, these young people are left with very few options for repayment and are burdened by a debt that is not going away any time soon. The balance will increase through interest, fees, service charges, etc. until it extinguishes their chances to get a home loan or even find a life partner (i.e. many people would rather not take on a $2,000/month payment just to be married to someone).

In reality, many of these new graduates are left with a singular option ”“ the federal Income-Based Repayment plan, or IBR, if they qualify….

Read the whole piece.

I’ll reiterate that from our perspective, the essential difficulty of the market here is not Greece, it is not the Euro, it is not Hungary, and it is really not even the slow pace of job growth in the latest report. The fundamental problem is that we have not, as a global economy, accepted the word “restructuring” into our dialogue. Instead, we have allowed our policy makers to borrow and print extraordinarily large band-aids to temporarily cover an open wound that will not heal until we close the gap. That gap is the difference between the face value of debt securities and the actual cash flows available to service them. The way to close the gap is to restructure the debt. This will require those who made the bad loans to accept the associated losses. By failing to do that, we have failed to address the essential problem faced by the world, which is that we have created more debt than we are able to service.

A few observations. First, I remain convinced that the other shoe to drop is not Greece or Spain or Hungary, but rather a second wave of major credit strains here in the U.S. related to fresh delinquencies from exotic adjustable rate mortgages.

Second, it is a delusion to interpret economic statistics suggesting an economic turnaround over the past year without factoring out the extent to which that has been driven by unsustainable levels of deficit spending.

Read it all.

We are drifting. We take comfort in bits of good news, but we are in dangerous waters; the Great Recession is being starkly revealed as a global crisis with the US, the traditional engine of recovery, sputtering on every cylinder. The US government responded with dramatic financial support by transferring money to the household sector. But outside of these transfers the personal income of Americans is still declining; the residential market remains stagnant at best; consumer growth is nominal. The only real energy in the economy has come from the cessation of inventory liquidation, which is now the main factor in rising industrial output and any modest improvement in the economy.

The mood of US households is despondent. In May only 11.3 per cent believed they would see their income rise in the following six months, while 16.6 per cent thought they would see it decline. This is the first time in over four decades that more people believe they will be worse off than better. Any massive fiscal and monetary stimulus that might reverse the trend is likely to be politically unsustainable given the growing concern over the exploding national deficit.

Wherever you look the scene is bleak. Leading economic indicators fell in April ”“ unusual at such an early stage in the up-cycle. Jobless claims were up by 25,000 to 471,000. And up again above expectations in the first three weeks of May ”“ raising the four-week moving average to a level consistent with 100,000, or more, net job losses. For the past several months, claims have been nowhere near the levels of 400,000 and less that in the past were consistent with sustained job creation. We are not enjoying the normal cycle of economic improvement.

Read it all.

(Please note the headline above is the one given to this piece today in the local paper in the op-ed section–KSH).

“The United States faces a fundamental disconnect between the services that people expect the government to provide, particularly in the form of benefits for older Americans, and the tax revenues that people are willing to send to the government to finance those services,” Douglas Elmendorf, director of the non-partisan Congressional Budget Office, writes in a May 17 blog post.

Addressing the current tax and spending gap to make fiscal policy sustainable is “an urgent task for policy makers,” Elmendorf says.

Read it all.

Terrorism and federal government debt tie as the most worrisome issues to Americans when they consider threats to the future wellbeing of the U.S. Four in 10 Americans call each an “extremely serious” threat, with healthcare costs ranking a close third.

Read it all.

Almost everything Congress has done in recent months has made private businesses less inclined to hire new workers. ObamaCare imposes new taxes and mandates on private employers. Even with record unemployment, Congress raised the minimum wage to $7.25, pricing more workers out of jobs. The teen unemployment rate rose to 26.4% in May, and for those between the ages of 25 and 34 it rose to 10.5%. These should be some of the first to be hired in an expansion because they are relatively cheap and have the potential for large productivity gains as they add skills.

The “jobs” bill that the House passed last week expands jobless insurance to 99 weeks, while raising taxes by $80 billion on small employers and U.S-based corporations. On January 1, Congress is set to let taxes rise on capital gains, dividends and small businesses. None of these are incentives to hire more Americans….

It’s always a mistake to read too much into one month’s jobs data, and we still think the recovery will lumber on. But if Ms. Romer wants this to be more than a jobless recovery, she and her boss should drop their government-creates-wealth illusions and start asking why so many private employers remain on strike.

Read it all.

A shadow fell across America’s economic recovery on Friday, as the Labor Department’s monthly report showed that private sector job growth was considerably weaker than expected.

The headline numbers suggested a reason to be optimistic ”” employers added 431,000 jobs and the jobless rate fell to 9.7 percent from 9.9 percent in April. But the underlying numbers showed that almost all of the job growth came from the 411,000 workers hired by the federal government to help with the Census. Most of those jobs will disappear in a few months.

By contrast, the private sector created 41,000, far short of expectations of 150,000 to 180,000 jobs. And the number of long-term unemployed, those who out of work for 27 or more weeks, remained at its highest rate since the Labor Department began collecting such data in the 1940s.

“It’s a very, very grudging labor market,” said Joshua Shapiro, chief economists for MFR Inc. “A growing amount of evidence now points to this recovery taking a long time.”

Read it all.

Yesterday was my 58th birthday. If I were a Greek worker I could retire. Although pension payments in Greece normally start around 61, special provisions allow anyone to retire at 58 if they have been in employment for 35 years. That, as it happens, is how long I have been at work. My index-linked pensions from the Greek Government would be worth 75 to 90 per cent of the average salary in the country, guaranteed for the rest of my life by the State.

If you want to know why Greece is going bankrupt and why the euro seems to be on the verge of disintegration, look no farther. The best argument I have ever heard for a break-up of the euro was this observation in a German newspaper: “The Greeks go on to the streets to protest against an increase of the pension age from 61 to 63. Does this mean that Germans should extend the working age from 67 to 69, so Greeks can enjoy their retirement?”

This, however, is not another article about self-indulgent Greeks and self-righteous Germans. The battle over bailouts in Europe is only a sideshow compared with the great social conflict that lies ahead all over the world in the next 20 years. This will not be a struggle between nations or social classes, but between generations ”” and it is a conflict that, in Britain, begins in earnest this year. The end of the Second World War in May 1945 marked the start of the baby boom, which lasted until the mid-1960s. Now, 65 years later, the corresponding retirement revolution is about to shake up our society, economy and political institutions.

Read it all

In retrospect, the pattern seems clear. Years before the Deepwater Horizon rig blew, BP was developing a reputation as an oil company that took safety risks to save money. An explosion at a Texas refinery killed 15 workers in 2005, and federal regulators and a panel led by James A. Baker III, the former secretary of state, said that cost cutting was partly to blame. The next year, a corroded pipeline in Alaska poured oil into Prudhoe Bay. None other than Joe Barton, a Republican congressman from Texas and a global-warming skeptic, upbraided BP managers for their “seeming indifference to safety and environmental issues.”

Much of this indifference stemmed from an obsession with profits, come what may. But there also appears to have been another factor, one more universally human, at work. The people running BP did a dreadful job of estimating the true chances of events that seemed unlikely ”” and may even have been unlikely ”” but that would bring enormous costs….

Read it all.

….here’s this week’s question:

If you were advising Congress and the White House, what would you recommend they do about offshore drilling? Cut it off and sharply cut back on environmental risks? Or continue it so that we can be less dependent upon foreign oil until alternative energies are easily accessible?

Read all the responses.

”¢NCA currently maintains more than 2.9 million gravesites at 130 national cemeteries in 39 states and Puerto Rico, as well as in 33 soldiers’ lots and monument sites.

Ӣ Approximately 295,600 full-casket gravesites, 90,200 in-ground gravesites for cremated remains, and 75,200 columbarium niches are available in already developed acreage in our 128 national cemeteries.

”¢ There are close to 19,000 acres within established installations in NCA. Nearly half are undeveloped and””with available gravesites in developed acreage””have the potential to provide approximately 4.7 million gravesites.

Ӣ Of the 130 national cemeteries, 70 are open to all interments; 20 can accommodate cremated remains and the remains of family members for interment in the same gravesite as a previously deceased family member; and 40 will perform only interments of family members in the same gravesite as a previously deceased family member.

Read the rest also.

For much of the rich world, however, the most important consequences of Europe’s mess will be fiscal. Governments must steer between imposing premature austerity (in a bid to avoid becoming Greece) and allowing their public finances to deteriorate for too long. In some countries with big deficits, the fear of a bond-market rout is forcing rapid action. Britain’s new government spelled out useful initial spending cuts this week. But the emergency budget promised for June 22nd will be trickier: it needs to show resolve on the deficit without sending the country back into recession.

In America, paradoxically, the Greek crisis has, if anything, removed the pressure for deficit reduction, by reducing bond yields. America’s structural budget deficit will soon be bigger than that of any other OECD member, and the country badly needs a plan to deal with it. But for now, lower bond yields and a stronger dollar are the route through which American spending will rise to counter European austerity. Thanks to its population growth and the dollar’s role as a global currency, America has more fiscal room than any other big-deficit country. It has been right to use it.

The world is nervous for good reason. Although the fundamentals are reasonably good, the judgment of politicians is often unreasonably bad. Right now that is what poses the biggest risk to the world economy.

Read the whole thing (emphasis mine).

The European financial crisis may look and smell rather different to the American banking crisis of a couple of years ago, but strip away the details ”“ the breakdown of the euro, the crumbling of the Spanish banking system to take just two ”“ and what you are left with is the next leg of a global financial crisis. Politicians temporarily “solved” the sub-prime crisis of 2007 and 2008 by nationalising billions of pounds’ worth of bank debt. While this helped reinject a little confidence into markets, the real upshot was merely to transfer that debt on to public-sector balance sheets.

This kind of card-shuffle trick has a long-established pedigree: after the dotcom bust, Alan Greenspan slashed US interest rates to (then) unprecedented lows, which helped dull the pain, but only at the cost of generating the housing bubble that fed sub-prime. It is not so different to the Ponzi scheme carried out by Bernard Madoff, except that unlike his hedge fund fraud, this one is being carried out in full public view.

The problem is that this has to stop somewhere, and that gasping noise over the past couple of weeks is the sound of millions of investors realising, all at once, that the music might have stopped.

Read it all.

Are you worried that we are passing our debt on to future generations? Well, you need not worry.

Before this recession it appeared that absent action, the government’s long-term commitments would become a problem in a few decades. I believe the government response to the recession has created budgetary stress sufficient to bring about the crisis much sooner. Our generation ”” not our grandchildren’s ”” will have to deal with the consequences….

The question we need to ask is this: If we don’t change direction, how long can we travel down this path without having a crisis? The answer lies in two critical issues. First, how long will the capital markets continue to finance government borrowings that may be refinanced but never repaid on reasonable terms? And second, to what extent can obligations that are not financed through traditional fiscal means be satisfied through central bank monetization of debts ”” that is, by the printing of money?

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The M3 figures – which include broad range of bank accounts and are tracked by British and European monetarists for warning signals about the direction of the US economy a year or so in advance – began shrinking last summer. The pace has since quickened.

The stock of money fell from $14.2 trillion to $13.9 trillion in the three months to April, amounting to an annual rate of contraction of 9.6pc. The assets of insitutional money market funds fell at a 37pc rate, the sharpest drop ever.

“It’s frightening,” said Professor Tim Congdon from International Monetary Research. “The plunge in M3 has no precedent since the Great Depression. The dominant reason for this is that regulators across the world are pressing banks to raise capital asset ratios and to shrink their risk assets. This is why the US is not recovering properly,” he said.

Read it all.

One definition of “tweak” is “small adjustment.” One example of vast understatement is Wisconsin Sen. Herb Kohl’s assessment that “tweaks” are all that is needed to guarantee Social Security’s fiscal sustainability. He offered that absurd assurance last week on a projected $5.3 trillion shortfall in the system over the next 75 years.

As chairman of the Senate Special Committee on Aging, Sen. Kohl should take special care to be more candid about what it will take to save Social Security. And we all should be especially wary about extremely long-range social spending forecasts, which have an expensive tendency to underestimate eventual costs.

Yet citing research by panel staff, Sen. Kohl told The Associated Press, “Modest changes can be made over time that will keep the program in surplus. They are not draconian, as the report points out, and they can be done and will be done.”

“Modest changes”?

Read it all.

The level of U.S. debt has reached a point at which economic growth traditionally begins to slow, a bipartisan fiscal commission making recommendations to the White House and Congress was told Wednesday.

The gross U.S. debt is approaching a level equivalent to 90 percent of the country’s gross domestic product, the level at which growth has historically declined, said Carmen Reinhart, a University of Maryland economist.

When gross debt hits 90 percent of GDP, Reinhart told the commission during a hearing in the Capitol, growth “deteriorates markedly.” Median growth rates fall by 1 percent, and average growth rates fall “considerably more,” she said.

Reinhart said the commission shouldn’t wait to put in place a plan to rein in deficits.

Read the whole thing-.

The causes of Japan’s lethargy and deflation rest in a failure to push ahead with structural reforms such as in postal savings or cuts to corporate tax rates that would unleash animal spirits, not a shortage of liquidity.

Mr. Bernanke may take comfort that Japan’s situation is in key respects different from America’s. For instance, U.S. households are more prone to consuming than their Japanese peers, and American banks and companies less averse to risk (sometimes to an extreme, as we’ve discovered in the past few years). Mr. Bernanke’s own exceptionally easy monetary policy has already filtered through the economy and has shown up in higher prices in nations pegged to the dollar and in higher global commodity prices (until the recent flight to the safety of dollar assets).

Still, for an economist who has famously examined Japan’s lost decade to avoid a recurrence in America, Mr. Bernanke could usefully come away from his Tokyo sojourn with a few updated lessons in mind. The most important message he could spread when he gets back to Washington is that for all monetary policy’s importance, it’s no substitute for pro-growth fiscal and regulatory policies.

Read the whole article.

The United States suggested Europe’s debt crisis would have minimal impact on global growth, but China took a more pessimistic view, warning it would impact demand for its exports and other regions would suffer too….

“The euro zone problems haven’t been cleaned up yet,” said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo. “And even though the global economy is definitely showing more signs of recovery than it did 6 months ago, worry continues that the euro zone’s woes will put a brake on this growth.”

Read it all.

The effort to stanch the vast oil spill in the Gulf of Mexico was mired by setbacks on Monday as state and federal officials feuded with BP over its failure to meet deadlines and its refusal to stop spraying a chemical dispersant.

The oil company had indicated that it could stem the flow of oil on Tuesday by trying a procedure known as a top kill, in which heavy fluid would be pumped into the well. But on Monday morning the company’s chief operating officer said the procedure would be delayed until Wednesday. At the same time, BP was locked in a tense standoff with the Environmental Protection Agency, which had ordered the company to stop using a chemical dispersant called Corexit by Sunday. But BP continued spraying the chemical on Monday despite the E.P.A.’s demand that it use a less toxic dispersant to break up the oil. The company told the agency that no better alternative was available.

At a news conference Monday in Louisiana, state and federal officials continued to hammer BP over its response to the spill.

“BP in my mind no longer stands for British Petroleum ”” it stands for Beyond Patience,” said Sen. Richard J. Durbin of Illinois, the No. 2 Democrat in the Senate. “People have been waiting 34 days for British Petroleum to cap this well and stop the damage that’s happening across the Gulf of Mexico.”

Read it all.

It is past time to end the conspiracy of silence about Fannie Mae and Freddie Mac, government-sponsored companies that buy and sell mortgages and related securities. Both were taken over by the Treasury Department in 2008. So far Washington has shelled out $140 billion to keep them afloat. A Congressional Budget Office study says their losses could reach $400 billion. Other estimates put them at $500 billion.

In contrast, the net cost to date of TARP, after loan repayments and other government income, is $172.5 billion, nearly half of which is owed by the auto industry.

While optimists foresee the repayment of most TARP funds, the same cannot be said of Fannie and Freddie, which own well over a trillion dollars in risky mortgages and mortgage-backed securities.

Unlike TARP funds, the subsidies to Fannie and Freddie do not show up in the government’s budget. If they did, it would be even further out of balance.

Read it all.

Far be it for me to make a dicey situation dicier but you can’t smell the sulphur in the air right now and not think we might be on the threshold of an age of rage….

Whether in 1789 or now, an incoming regime riding the storm gets a fleeting moment to try to contain calamity. If it is seen to be straining every muscle to put things right it can, for a while, generate provisional legitimacy.

Act two is trickier. Objectively, economic conditions might be improving, but perceptions are everything and a breathing space gives room for a dangerously alienated public to take stock of the brutal interruption of their rising expectations. What happened to the march of income, the acquisition of property, the truism that the next generation will live better than the last? The full impact of the overthrow of these assumptions sinks in and engenders a sense of grievance that “Someone Else” must have engineered the common misfortune. The stock epithet the French Revolution gave to the financiers who were blamed for disaster was “rich egoists”. Our own plutocrats may not be headed for the tumbrils but the fact that financial catastrophe, with its effect on the “real” economy, came about through obscure transactions designed to do nothing except produce short-term profit aggravates a sense of social betrayal. At this point, damage-control means pillorying the perpetrators: bringing them to book and extracting statements of contrition. This is why the psychological impact of financial regulation is almost as critical as its institutional prophylactics. Those who lobby against it risk jeopardising their own long-term interests. Should governments fail to reassert the integrity of public stewardship, suspicions will emerge that, for all the talk of new beginnings, the perps and new regime are cut from common cloth. Both risk being shredded by popular ire or outbid by more dangerous tribunes of indignation.

Read it all (subscription required).

The resignation of Dennis C. Blair as director of national intelligence was the product of personal as well as institutional failings. A retired admiral with a distinguished record of service, Mr. Blair’s political judgment looked questionable from the beginning of his DNI tenure, when he nominated a former ambassador with close ties to China and Saudi Arabia — and crackpot views about the Israel “lobby” — to chair the National Intelligence Council. After the failed Christmas Day airplane bombing, Mr. Blair told Congress that the Nigerian suspect should have been questioned by the interagency interrogation group created by the administration for terrorism cases — only to acknowledge later that the team had not yet been launched.

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“Bond market vigilantes have already woken up in Greece, in Spain, in Portugal, in Ireland, in Iceland, and soon enough they could wake up in the U.K., in Japan, in the United States, if we keep on running very large fiscal deficits,” Roubini said at an event at the London School of Economics yesterday. “The chances are, they are going to wake up in the United States in the next three years and say, ”˜this is unsustainable.’”

The euro has touched a four-year low against the dollar on concern nations with the largest budget deficits will struggle to meet the European Union’s austerity requirements. Roubini, speaking in a lecture hall packed with students who then queued to meet him at a book-signing, suggested that the public debt burden incurred after the banking panic of 2008 may now cause the financial crisis to metamorphose.

“There is now a massive re-leveraging of the public sector, with budget deficits on the order of 10 percent” of gross domestic product “in a number of countries,” Roubini said. “History would suggest that maybe this crisis is not really over. We just finished the first stage and there’s a risk of ending up in the second stage of this financial crisis.”

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Grilled by skeptical lawmakers, Interior Secretary Ken Salazar on Tuesday acknowledged his agency had been lax in overseeing offshore drilling activities and that may have contributed to the disastrous oil spill in the Gulf of Mexico.

“There will be tremendous lessons to be learned here,” Salazar told a Senate panel in his first appearance before Congress since the April 20 blowout and explosion on the Deepwater Horizon rig.

His appearances before two of the three Senate panels holding hearings Tuesday on the giant oil spill came as federal officials kept a wary eye on the expanding dimensions of the problem. The government increased the area of the Gulf where fishing is shut down to 46,000 square miles, or about 19 percent of federal waters. That’s up from about 7 percent before.

Read it all.

Herein lies the challenge: Small businesses, half of the private sector (and the most important part as far as jobs are concerned), have been heavily impacted by this credit crisis. Small businesses created 64% of new jobs over the past 15 years, but they have cut five million jobs since the onset of this credit crisis. Large businesses, by comparison, have shed three million jobs in the past two years.

Small businesses continue to struggle to gain access to credit and cannot hire in this environment. Thus, the full weight of job creation falls upon large businesses. It would take large businesses rehiring 100% of the three million workers laid off over the past two years to make a substantial change in jobless numbers. Given the productivity gains enjoyed recently, it is improbable that anything near this will occur.

Unless real focus is afforded to re-engaging small businesses in this country, we will have a tragic and dangerous unemployment level for an extended period of time. Small businesses fund themselves exactly the way consumers do, with credit cards and home equity lines. Over the past two years, more than $1.5 trillion in credit-card lines have been cut, and those cuts are increasing by the day….

Read it all.

“We have not relented on our principles,” Mr. [Jean-Claude] Trichet told Der Spiegel, the German newsmagazine, according to a transcript on the bank’s Web site. “Price stability is our primary mandate and compass.”

And in an interview broadcast on Sunday, the U.S. Treasury secretary, Timothy F. Geithner, signaled his confidence that Europe would resolve its debt crisis and that the American economy would withstand its impact. “Europe has the capacity to manage through this,” Mr. Geithner told Bloomberg Television. “And I think they will.”

As investors absorb the details ”” and the potential weaknesses ”” of the $1 trillion European rescue plan, Mr. Geithner seemed to be trying to draw a sharp, if implicit, contrast to remarks last week from another senior economic adviser to President Barack Obama, Paul A. Volcker. Mr. Volcker, a former Federal Reserve chairman, startled some investors when he spoke of a possible “disintegration” of the euro zone ”” a striking shift from his expressions of confidence of only two months earlier.

Read it all.

Earlier this week, the Bank of England Governor, Mervyn King, irked US authorities by pointing out that even the world’s economic superpower has a major fiscal problem -“even the United States, the world’s largest economy, has a very large fiscal deficit” were his words. They were rather vague, but by happy coincidence the International Monetary Fund has chosen to flesh out the issue today. Unfortunately this is a rather long post with a few chunky tables, but it is worth spending a bit of time with ”“ the IMF analysis is fascinating.

Its cross-country Fiscal Monitor is not easy reading and is a VERY big pdf (17mb), so I’ve collected a few of the key points. The idea behind the document is to set out how much different countries around the world need to cut their deficits by in the next few years, and the bottom line is it’s going to be big and hard (ie 8.7pc of GDP in deficit cuts around the world, which works out at, gulp, about $4 trillion).

But the really interesting stuff is the detail, and what leaps out again and again is how much of a hill the US has to climb. Exhibit a is the fact that under the Obama administration’s current fiscal plans, the national debt in the US (on a gross basis) will climb to above 100pc of GDP by 2015 ”“ a far steeper increase than almost any other country.

Read it all and look carefully at the graphs.

The New York attorney general has started an investigation of eight banks to determine whether they provided misleading information to rating agencies in order to inflate the grades of certain mortgage securities, according to two people with knowledge of the investigation.

The investigation parallels federal inquiries into the business practices of a broad range of financial companies in the years before the collapse of the housing market.

Where those investigations have focused on interactions between the banks and their clients who bought mortgage securities, this one expands the scope of scrutiny to the interplay between banks and the agencies that rate their securities.

The agencies themselves have been widely criticized for overstating the quality of many mortgage securities that ended up losing money once the housing market collapsed. The inquiry by the attorney general of New York, Andrew M. Cuomo, suggests that he thinks the agencies may have been duped by one or more of the targets of his investigation.

Those targets are Goldman Sachs, Morgan Stanley, UBS, Citigroup, Credit Suisse, Deutsche Bank, Crédit Agricole and Merrill Lynch, which is now owned by Bank of America.

Read it all.