Served by Jesse of Le Café Américain
These excerpts from the most recent TARP Congressional Oversight Panel Report make the risks in the US financial system abundantly clear.
Do you think that the Congress has the will and the ability to act on their recommendation, with the men currently in positions of power on the key Committees? Do you believe that the Obama Administration is capable of reforming itself and effecting genuine change with so many Wall Street denizens forming their policy?
“In order to advance a full recovery in the economy, there must be greater transparency, accountability, and clarity, from both the government and banks, about the scope of the troubled asset problem.”
We are persuaded that the government is waiting for the next wave of failures, or some exogenous event of catastrophic proportion, to provide their rationale to take new aggressive action.
But while the financial oligarchy is in control of the men in power, we doubt that these will be the right steps for the majority of Americans, the US economy, and its debt holders.
“There are a thousand hacking at the branches of evil to the one who is striking at the root.”
Henry David Thoreau
Congressional Oversight Panel – August 11 Report – The Continued Risk of Troubled Assets
“…But, it is likely that an overwhelming portion of the troubled assets from last October remain on bank balance sheets today.
If the troubled assets held by banks prove to be worth less than their balance sheets currently indicate, the banks may be required to raise more capital. If the losses are severe enough, some financial institutions may be forced to cease operations. This means that the future performance of the economy and the performance of the underlying loans, as well as the method of valuation of the assets, are critical to the continued operation of the banks.
…If the economy worsens, especially if unemployment remains elevated or if the commercial real estate market collapses, then defaults will rise and the troubled assets will continue to deteriorate in value. Banks will incur further losses on their troubled assets. The financial system will remain vulnerable to the crisis conditions that TARP was meant to fix.
…Part of the financial crisis was triggered by uncertainty about the value of banks’ loan and securities portfolios. Changing accounting standards helped the banks temporarily by allowing them greater leeway in describing their assets, but it did not change the underlying problem. In order to advance a full recovery in the economy, there must be greater transparency, accountability, and clarity, from both the government and banks, about the scope of the troubled asset problem. Treasury and relevant government agencies should work together to move financial institutions toward sufficient disclosure of the terms and volume of troubled assets on institutions‟ books so that markets can function more effectively. Finally, as noted above, Treasury must keep in mind the particular challenges facing small banks.
This crisis was years in the making, and it won‟t be resolved overnight. But we are now ten months into TARP, and troubled assets remain a substantial danger to the
financial system.
…Nonetheless, financial stability remains at risk if the underlying problem of troubled assets remains unresolved.”
The banks must be restrained, and the financial system reformed, and the economy brought back into balance, before there can be any sustained recovery.
Anonymous 
Bleichroeder 
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Jesse
There is no chance that these festering and growing problems will be solved in the current context.
As Senator Dick Durbin said "they own the place". The financial and political oligarchy will try and squeeze blood from the taxpayer stone. Let there be no doubt about that. Ultimately the math will win – by next year the government debt will be around $15 trillion and annual interest payments on that debt will be around $500-$700 billion. This can only continue to escalate so far when it becomes untenable. No different than how the most recent "mortgage finance" credit bubble burst.
What happens when the average working stiff realizes he has been shorn of everything and his childrens future? If history is any guide then we should expect demagogues that will incite us vs them and divide the population to control them. They will find scapegoats in some of the weakest groups – lynch mobs will take out their frustrations on these groups. Spontaneous or willfully orchestrated?? While the kleptocracy abscond with their ill gotten gains and maintain political power with an iron fist. This is how brown shirts and goose steps come into being.
We are inexorably moving towards the dark side of human nature and history.