Dear God, let’s just kiss the US economy goodbye. It may take a few years before the loyalists and permabulls throw in the towel, but the handwriting is on the wall. The Obama Administration, if the Washington Post’s latest report is accurate, is about to embark on a hugely expensive “save the banking industry at […]
Read more...Maybe I am reading too much into this development, but the fact that Team Obama is planning to announce some TARP restrictions prior to revealing how the money will be doled out is really odd. I welcome other views, but I can come up with only three theories: 1. The Administration is waking up to […]
Read more...Your humble blogger has been saying for some time that efforts to prop up bank asset values are prolonging the financial crisis, and the the various incarnations of “bad bank” plans inevitably entail buying dud assets at above market prices. That has the ugly side effect, which some no doubt see as a virtue, of […]
Read more...Wish I’d written it. From Jesse: We believe that the stimulus is too backend loaded and unimaginative to affect anything sooner. Adding liquidity to the banks is as useful as filling the tank of a car wrapped around a telephone pole. Who are the banks going to lend to? And increased spending on health care, […]
Read more...Today, Senator Claire McCaskill of Missouri introduced legislation that would limit salary, bonus, and stock options for executives as financial firm recipients of bailout funds be limited to the President’s level of pay, currently $400,000. McCaskill’s proposal is likely to go all of nowhere. She is not a member of the Finance or Appropriations committee, […]
Read more...A firestorm of criticism was unleashed from Washington at bonus-reaping-while-Wall-Street-burns bankers, with President Obama deigning to join in the fray. The tone was unusually heated: President Barack Obama fed a swelling populist revolt against Wall Street bonuses, calling it “shameful” that banks doled out $18.4 billion as taxpayers bail out companies and the U.S. remains […]
Read more...Be careful what you wish for. The SEC regulated investment banks, and look what happened to that industry, Similarly, Madoff was registered, had a written roadmap from Harry Markopolos in terms of the issues that merited investigation, and did nothing. Without a serious change in priorities (and likely an upgrade in staff skills) at the […]
Read more...Before we get to the particulars of tonight’s Wall Street Journal story, we need to step back a second. Just like the war in Iraq, which had a ton of justifications served up by the Bush Administration, none of which added up (and the most obvious one, that the Bushies wanted to control the second […]
Read more...The Administration has evidently launched a campaign to warn the American public that the black hole banking industry will need more in the way of recapitalization funding than is currently on offer. Mind you, we are NOT opposed to this sort of thing were it done correctly: tough minded banking industry reforms, seizure of the […]
Read more...Adam Levitin at Credit Slips has a big beef with a lot of the critics of the idea of mortgage cramdowns as an alternative to foreclosure. For the most part, they don’t know what they are talking about. That charge may sound extreme. but Levitin makes a persuasive case. First, the only empirical work done […]
Read more...Readers may recall that we hated the TARP from its inception. Recall that the TARP was so named because the TA stood for “troubled asset”. The plan was to buy crappy assets from banks because this would leave them with nice pristine balance sheets and they could go forth and be reckless lend once again. […]
Read more...Wellie, lots of commentators (see here and here for a sampling) have taken note that Timothy Geithner contradicted himself royally today in his Congressional testimony. And mind you, this was WRITTEN testimony, so one cannot give him the benefit of the doubt (such as that he did a bad job of tap dancing when faced […]
Read more...Color me suspicious (as if that would be news to readers). Fiat and Chrysler have been talking about a deal that by all appearance might get the US automaker off government life support. That is probably a good idea, because if push were to come to shove, Chrysler would be the number one candidate to […]
Read more...Perhaps I am unduly cynical, but I find it pretty odd that the general counsel at the New York Fed. Thomas Baxter, is making statements about the Lehman collapse now. For those who are familiar with US jurisprudence, anything said to an attorney in confidence is privileged information (yes, there have been some attacks on […]
Read more...As readers may recall, we have been skeptical of the TARP from the get-go. As the program ricocheted from one high concept to another, one had to wonder: were Paulson and the Treasury truly that incompetent, or was the seeming cluelessness, as some have suggested, a cover for a program to transfer funds to the […]
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