Even though Congress in general seems pretty clueless on matters financial (the Wall Street/high end variety), some members appear to understand the mindset. One consequence of the ever-delayed “buy the bad assets” program, which clearly has to pay at or above banks’ current marks (otherwise they show losses, which hurts their capital bases, something that […]
Read more...I cannot recall a major US policy initiative being met with as much immediate revulsion as the so-called Geithner plan. Even the horrific TARP, which showed utter contempt for Congress and the American public was in some ways less troubling. Paulson demanded $700 billion, nearly $200 billion bigger than the Department of Defense, via a […]
Read more...The Freddie/Fannie conservatorship, which seemed like an epic event at the time, was succeeded by so many crises, Lehman, the September/October meltdowns, AIG, the European bank rescues, that it seems like a distant memory. But the Treasury made a commitment to maintain positive net worth for both the mortgage lenders/guarantors and was remarkably non-specific as […]
Read more...That one word assessment of the Geithner plan, as previewed in the New York Times tonight, comes from reader Scott, and is good enough to print. I am so disgusted with this entire proceeding that I am going to dispatch it quickly. Let’s start with the basics. The US banking system is insolvent. Got that? […]
Read more...Remember the embarrassing ten weeks of so of Henry Paulson failing about to try to get his “get the bad assets out of the structured investment vehicles” effort, the MLEC, also fondly known as The Entity, off the ground? It quietly faded from the headlines.. Why? It was supposed to be a private sector solution, […]
Read more...Even before its inception, we’ve been very skeptical of the TARP. Paulson managed to get the type of spending authorization that you only see in wartime, with almost no contraints on what he could do, and most troubling, put himself beyond the reach of law. From the original draft of the bill: Decisions by the […]
Read more...Guest blogger and former Congressional staffer Lune was kind enough to provide this post on Volcker’s testimony before the Senate Banking Committee today. Enjoy! From Lune: Paul Volcker, former Fed chief and currently the head of President Obama’s Economic Recovery Advisory Board, and the chairman of the Group of Thirty, testified to the Senate Banking […]
Read more...L’affaire Madoff gets more interesting by the day. I had though the failure to pursue the hedge fund scamster had more to do with incompetence and a disinclination to go after investment managers (insider trading cases, which is what seems to get the SEC’s enforcement division juices going, usually pick up penny ante players at […]
Read more...I believe I am permitted to hyperventilate only once in an evening, so I’ll have to act with a modicum of restraint here. The Obama executive compensation restrictions for bailout fund recipients have been leaked, and may be long enough on appearances to appease an angry US electorate. But the shortcomings of the supposedly tough […]
Read more...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...The Milken Institute has released a new report on the housing/credit crisis, which is a preview of a book to be released this spring (hat tip reader Dwight). What I found particularly interesting, given the Institute’s conservative leanings, is that the policy recommendations were on the whole, middle of the road. They acknowledged the need […]
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...This is starting to get interesting. Readers may recall that a fair number of hedge funds have restricted or barred redemptions (a classic example of “possession is 9/10 of the law” since it is contrary to the redemption policies in their investment agreements). The justification goes something like this: We the fund hold liquid and […]
Read more...Goldman, in a research note discussed at CNBC, says the total tab for the US bank rescue operation could run as high as $4 trillion: The cost of restoring confidence in U.S. financial firms may reach $4 trillion if President Barack Obama moves ahead with a “bad bank” that buys up souring assets. The figure […]
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 […]
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