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DEPRESSION PILL

Dip into your savings,

Borrow a thou or two,

Hear your nation calling--

A.I.G. needs you!

Treasury Secretary Geithner was interviewed on PBS and stated that the top 20 banks in the US in terms of assets control between two-thirds and three quarters of the banking as a whole currently. How is this a good enviroment for the economy? The too big to fail institution hasn't benefited anyone besides the banking executives. Customers and clients haven't received better products or rates. Why isn't this situation an anti trust matter?

So everything the Wall Street Journal editorial page was telling me about the wisdom of the marketplace was a sham?

If you go to your bank and ask for an HELOC, the bank will use the market value of your house, right? You can't say, I feel like that my house is worth more, my collateral is bigger, give me more money.

Mark-to-market is exactly that, but the banks are no longer forced to do that. They can make up their own numbers.

In the mid-90's I worked at OCWEN Financial where our team acquired pools of non-performing commercial real estate loans from the RTC and other sources. With a little tweaking for today's multi-lender capital structures, The Policies and Procedures Manuel, Underwriters Handbook, and Pricing Model are applicable for use with the PPIP.

Anyone want to start a fund?

But how do we know what these assets are worth? How could mark to market work in this sort of situation? Earlier last year, the prospects of groups such as Blackstone rehabilitating these troubled assets were mentioned- could you comment?

So the free market is really a sham?

The Wall Street Journal has been telling me for years that the free market is the best possible system, because the efficient operators will survive, and the inefficient operators will fail. Therefore, we will have a proces of darwinian evolution that will leave us with an economy of the more efficient operators.

But now the government is subsidizing the inefficient opertors. So the government is creating an inefficient economy. Right?

Is opening up the PIP with an updated war-bond access to the general public really possible? Is this just to keep the masses from taking to the street or to the Congress's inboxes and to avoid the public backlash which will come when people who put up very little risk in their hedge funds make out HUGE on the toxic asset purchases with taxpayers shouldering the risk? Is there a way to garuntee that a specific portortion of the assets be owned by common investors through Bailout-Bonds to spead out the upside to the general public?

Clearly, the President is listening to those, like Summers, who are immersed in the hedge fund culture, and is turning his back on those who are advising against trying to put more taxpayer money into bailing out the system.

The recent G20 summit was a disaster with the President pleadging to put taxpayer assets behind trillions of IMF "special drawing rights," (funny money). Such a supranational approach could sink the dollar, the administration, and the economy in one fell swoop.

Does the Obama finance team think this is a good idea or is it a matter of politics (ie. congress won't sign off on more money, politically unfavorable to take over banks and fire CEOs) or is it something more 'sinister' (ie. summers and geithner being beholden to the financial industry)? where does Bernanke come into all of this?