Rewind to Inauguration Day in January. President-elect Obama ushered in a new administration with much fanfare and hope for C-H-A-N-G-E. Now 12 months later, it's business as usual. Take a trip down memory lane as we recall some of the highlights (and lowlights) of 2009 in the accompanying clip. 

We have a problem with that!  Enormous bonus payouts for executives. Toxic, dangerous assets that remain on banks' balance sheets. The same executives running firms they took to the brink with risky investment choices. The "too big to fail" institutions took the global economy to the precipice -- but were saved with hefty rescue packages thanks to American taxpayers -- are now bigger than ever.

As summarized by one of our most popular Tech Ticker guests Howard Davidowitz, "I have a problem with that!" So do many Americans as populist outrage rises.

In fact, it's anything but business as usual for American workers who are grappling with 10% unemployment -- the highest level in 26 years -- and no guarantee the economic bottom is in place for 2010. 

While the $787 billion stimulus package has yet to filter down to local communities, it's no wonder Americans are asking: "Where's MY bailout?"...

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From The Business Insider, Dec. 24, 2009:

The New York Times delivers a front-page expose on the original Goldman Sachs scandal: How the firm created derivatives (synthetic CDOs) to allow investors to bet on the housing market, sold the CDOs to clients who wanted to bet on additional housing market gains, and then went short the same CDOs because Goldman believed the housing market would crash.

The outcome, of course, was the same as it usually is: Goldman made a killing, on both the product origination fees and the proprietary bets.  Goldman's clients, meanwhile, got crushed.

One observer likens this to buying insurance on a house and then burning the house down:

“The simultaneous selling of securities to customers and shorting them because they believed they were going to default is the most cynical use of credit information that I have ever seen,” said Sylvain R. Raynes, an expert in structured finance at R & R Consulting in New York. “When you buy protection against an event that you have a hand in causing, you are buying fire insurance on someone else’s house and then committing arson.”

But is it really a scandal?

If you view Wall Street the old-fashioned way, yes: The firm sold its clients a product and then bet against it.  This allowed Goldman to make money two ways instead of just one: Product origination fees and trading profits, all at its clients' expense.

If you take a more realistic view of Wall Street, however, this is just an everyday reality.  Wall Street firms like Goldman sit between buyers and sellers, and they also buy and sell on their own behalf.  Every single transaction these firms conduct entails a conflict of interest: Everyone is always making bets, and someone is always winning and losing them.  It's just not obvious until later which party that is.

The way we suspect Goldman viewed its behavior in the housing scenario above is as follows:

• Clients are desperate for products with which to bet on the housing market

• We can help our clients by creating those products and get paid handsomely for doing so. 

• We're negative on the housing market, so we can use the products bet against the housing market.  If we're right, we'll make some money there, too.

Don't forget that the buyers of Goldman's CDOs were among the most sophisticated investors in the world.  These investors were paid to analyze the housing market and make smart investment decisions based on that analysis.  The investors did their analysis and concluded that the housing market was going to go up.  Goldman did its own analysis and came to the opposite conclusion.  But it was at least relatively a fair fight. ...

Click here for the full post.

More coverage from The Business Insider:

• Goldman blasts the NYTimes hit-job
• How Goldman screwed its clients in the housing collapse

"The recovery will be slow and things will be fairly fragile," and that might be the best we can hope for in 2010, according to Nariman Behravesh chief economist at Global Insight, the world's largest economic forecasting and consulting firm.

"Any number of risk could knock us back down into recession," Behravesh tells Aaron and Henry in the accompanying clip. These risks include botched monetary policy by the Fed, a major retrenchment of consumer spending in the face of rising unemployment, and another chapter to the financial crisis.

Behravesh isn't saying it's the most likely scenario; but at 20% the probability is "too high" for his liking.

On the flip side, he forecasts an equally high probability of a strong recovery. "There's a lot of pent up demand for consumer spending for cars, for housing," he says. "And that could be released a lot sooner and lot more powerfully than anyone is talking about."

But the more likely scenario is a slow and sluggish economic recovery, Behravesh says, predicting unemployment remains high in 2010, peaking at 10% before falling back to the 9% range by year's end. That will provide a headwind for consumers, who will spend at a slower rate than in the past.

From The Business Insider, Dec. 22, 2009:

Heads up to Marc Faber fans: Mr. Gloom Boom Doom has given an extensive interview with the Economic Times of India, laying out some specific ideas for the coming year.

You can read a full transcript here. Among other things, he likes wheat, sugar, and natural gas, and he hates the US for all the obvious reasons

Perhaps his most surprising, uber-contrarian call is that he's bullish on... Japan! He says it's the ultimate contrarian play:

So Marc Faber what are your keen investment themes and ideas for 2010?

I avoid US government bonds I think as a contrarian you really want the contrarian play. You should buy Japanese stocks and Japanese banks this is the absolute contrarian play. Nobody is interested in Japan all the funds have withdrawn money from Japan they have given up on Japan I guarantee you the economy would not do well, forget about the economy the population is shrinking but you can have an economy that does not do well but the companies do well that is a big difference and I think the Japanese banks are very depressed. All the banks in Asia have actually recovered very strongly but not the Japanese banks so as a contrarian play I would look at that.

Full transcript >

Click here to view the 3-part interview.

More coverage from The Business Insider:

Marc Faber: Dubai was just the tip of the sovereign default iceberg

What a difference a year makes. The stock market has come a long way in the past 12 months and so have President Obama's approval ratings, but in the opposite direction.

The latest WSJ/NBC News poll shows Obama's approval ratings have slipped below 50% for the first time in his presidency and have suffered the steepest first-year decline in modern American history.

There's good reason Obama's poll numbers have fallen, most notably his mishandling of the banks, as Henry and I discuss here and in the accompanying clip. Obama may talk tough about "fat-cat bankers" but the actions of his administration suggest policy is still being conducted at their behest.

Beyond "bailout fatigue", Americans are upset with Obama about the ongoing spending spree in Washington. On Thursday, the House passed a $290 billion increase to the government's debt ceiling as well as a $154 billion package aimed at boosting jobs and aiding state governments...

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"His creative leadership helped ensure that 2009 was a period of weak recovery rather than catastrophic depression, and he still wields unrivaled power over our money, our jobs, our savings and our national future," Time's Michael Grunwald writes. "The decisions he has made, and those he has yet to make, will shape the path of our prosperity, the direction of our politics and our relationship to the world. "

Bernanke was clearly at center of the government's response to the financial crisis and remains "the most important player guiding the world's most important economy," as Grunwald writes. By his own admission, the chairman didn't see the credit crisis of 2008 coming and was too slow to react. Still, all but his most strident critics agree Bernanke helped prevent an even worse outcome, possibly a second Great Depression.

But does Bernanke deserve to be "Person of the Year"?

From The Business Insider, Dec. 16, 2009:

The Treasury may have made some silly paper "profit" on its bailout of Citigroup (C) but the taxpayer may not get much of anything.

The Washington Post reports that as part of the bank's TARP payback agreement, it's quietly been given a $38 billion tax break by the IRS. Seriously.

The Internal Revenue Service on Friday issued an exception to long-standing tax rules for the benefit of Citigroup and a few other companies partially owned by the government. As a result, Citigroup will be allowed to retain billions of dollars worth of tax breaks that otherwise would decline in value when the government sells its stake to private investors.

While the Obama administration has said taxpayers are likely to profit from the sale of the Citigroup shares, accounting experts said the lost tax revenue could easily outstrip those profits.

So what specifically happened?...

More coverage from The Business Insider:

• Citi blasts Abu Dhabi for going back on promised $7.5 billion investment
• Citi to raise capital, pay back TARP

James Altucher of Formula Capital isn't afraid to take a controversial stand, as evinced by his recent defense of Goldman Sachs and attack on the solar industry.

But Altucher might have bitten off more than he can chew by challenging the down-home wisdom of Congressman Ron Paul in a recent piece for Huffington Post entitled: Why Ron Paul is Wrong.

Specifically, Altucher says the Texas Republican and hero to libertarians is wrong about his views on the bailouts and Fed policy, which Paul detailed in a column in Forbes entitled: Be Prepared for the Worst

In the accompanying video, Altucher explains why he thinks Paul is wrong about a number of issues, including:

• Whether or not the Fed is creating another asset bubble (or bubbles), and whether the central bank is right in trying to fuel some inflation.
• Whether Obama's $787 billion stimulus package is going to create jobs -- 70% of the package is yet to be spent -- or was just a huge waste of money.
• Whether the bank bailouts were worthwhile, relative to the alternative of letting the financial system collapse and enduring the economic hardships that surely would have followed.

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Unlike many politicians, that's not just campaign rhetoric. Tilton's firm has over $7 billion in equity and direct investments with more than 70 companies employing about 250,000 Americans. Most of the those jobs would have disappeared if Patriarch hadn't stepped in with loans and investments to those companies during times of duress, she says.

In recent months, Tilton has talked with Treasury officials, elected officials and just about anyone else who'll listen about her plan to spur similar loans to distressed companies via a public-private partnership.

In simple terms, the plan calls for $40 billion of government funds already allocated for TARP plus $10 billion of funds from private investors to be leveraged into a $200 billion vehicle to provide loans to small- and medium-sized businesses. Tilton call this The SME Rescue Loan Program and you can find more detail here.

The program would provide "rescue lending... to those companies that have been rejected by banks that will otherwise liquidate if they can't get the basic working capital they need to keep their businesses running," Tilton says...

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From The Business Insider, Dec. 15, 2009: 

Think the economy is being inflated by economic stimulus right now?

Well if that's the case, then get ready for a ride over the next two years.

The majority of Obama's stimulus hasn't even been spent yet. Thus the support won't disappear any time soon, and actually could accelerate. There's still another 70% to go.

Slate: Since it was passed in February 2009, only $237.6 billion (30 percent) of the $787 billion package has entered the economy. The tax cuts and infrastructure spending in the pipeline for 2010 and 2011 will support job creation. On Dec. 9, New Jersey Transit approved a $583 million contract for two construction firms to get cracking on a new commuter rail tunnel connecting New York and New Jersey under the Hudson River.

More from The Business Insider:

• • Get Ready for Epic Stimulus Spending Out of China in the Final Couple Weeks of December
• • Shocker: Washington DC Got More Stimulus Money Per Capita Than Any State in the Union