The Geithner plan has now been leaked in detail. It’s exactly the plan that was widely analyzed — and found wanting — a couple of weeks ago. The zombie ideas have won.
The Obama administration is now completely wedded to the idea that there’s nothing fundamentally wrong with the financial system — that what we’re facing is the equivalent of a run on an essentially sound bank. As Tim Duy put it, there are no bad assets, only misunderstood assets. And if we get investors to understand that toxic waste is really, truly worth much more than anyone is willing to pay for it, all our problems will be solved.
To this end the plan proposes to create funds in which private investors put in a small amount of their own money, and in return get large, non-recourse loans from the taxpayer, with which to buy bad — I mean misunderstood — assets. This is supposed to lead to fair prices because the funds will engage in competitive bidding.
[…]
Or to put it another way, Treasury has decided that what we have is nothing but a confidence problem, which it proposes to cure by creating massive moral hazard.
Now admittedly, the NYTimes isn’t exactly the most liberal paper in the country and is unlikely to be an Obama cheerleader, but isn’t the lack of confidence argument at the base of why banks aren’t lending, etc? They’re afraid to lend out what they might not get back if things get worse. On the other hand, perhaps they’re just waiting for more handouts.
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Is this what new bank tellers will look like?
‘unlikely to be an Obama cheerleader’
That’s why their news pages never reported Wright’s Goddamn America comments.
http://tinyurl.com/6e3f3c
Tha banks and bankers aren’t afraid of anything – never were – still aren’t.
They always knew the government would have to bail them out when things went wrong – and they also knew it would eventually happen.
Do yourselves a favor and read this article:
The Looting of America’s Coffers
By David Leonhardt, New York Times, March 11, 2009
You can read it online, free. Google this (including quotes):
“the looting of america’s coffers”
It comes up first.
Now you can protect yourself on Wall St:
http://cafepress.com/CrazyDuckz.368797820#
#5–Alfie==the banks in trouble are as needed and necessary to a sound economy as are the Las Vegas gaming tables and for all the same reasons.
No. It does look like Obama and all other experts I have read so far really don’t have a clue.
Banking is banking. Lending is lending. Those are necessary. When you start leverage hedge funds on top of this you have the Vegas Mafia dressed as “free market capitalists.”
Silly so many people can’t see the forest for the trees.
I for one, welcome our new zombie overlords.
Another ten trillion in deficits over the next decade, and somehow this is a responsible budget.
Is the US becoming a banana republic?
“We Latin Americans know the pattern.”
“It starts with a cult of personality,” the Cuban explained. “One man declares himself the jefe, the caudillo, the big leader.”
…
“what comes next is nationalization.”
…
“The last step?” asked the Cuban. “Censorship. It won’t be obvious at first–they’re always too smart for that. But it will come.”
“Never,” replied the American. “We have the First Amendment.”
“And soon enough,” the Cuban said, smiling sadly, “you will also have the Fairness Doctrine.”
http://tinyurl.com/banrep
http://rollingstone.com/politics/story/26793903/the_big_takeover/1
Uncle Dave said: “Now admittedly, the NYTimes isn’t exactly the most liberal paper in the country and is unlikely to be an Obama cheerleader…”
File this under outrageous humor
I take the view that Congress and the Fed are trying to get the banks to act in an unwise and even foolish manner.
We do lack confidence. The question is should we feel confident? The next question is, Are the actions of Congress and the Fed making you feel more confident or less confident?
The Fed buying securities from the Fed to back the spending what we don’t have doesn’t make me feel all warm and cozy inside.
Obama’s too busy trying to milk the situation (along with pushing for more socialized healthcare, more taxes, etc. et.c) instead of just doing the damn job…which is to GET the banks ready/willing/able to lend. And for businesses to feel like it’s okay to start hiring a few people here and there.
As Rahm said (paraphrasing), “Never waste a crisis”. Time for Obama to toss that line of thinking and actually do the job he was voted in to do. Enough with Leno, basketball games, and late-night parties.
Until there is a bottom in the USA real estate market. You realy can’t put a true value on the CDO paper. The USA has not found that bottom yet. If the USA opened up immigration and let 6 million new people in the country. They would need houses and that would put a bottom in the real estate market. One thing the USA still has going for it is people still want to move there. This would cost next to nothing to do.
“Now admittedly, the NYTimes isn’t exactly the most liberal paper in the country and is unlikely to be an Obama cheerleader….”
How do you decrypt this?
#13: At least one person got my sarcastic comment.
It.s nice to finally hear the President speak and not cringe like a soft tyranny.