Streams

Covering TARP

Tuesday, February 10, 2009

Diane Brady, senior editor at Business Week, discusses this morning's announcement by US Treasury Secretary Timothy Geithner outlining the details of the next round of bank assistance, as well as Obama's press conference last night.

Guests:

Diane Brady

Comments [15]

gaetano catelli from manhattan

why haven't any of the "genius" economists who make the rounds of talk shows pointed out that the stimulus package + TARP 2 = $1.5 trillion, and if used instead to reduce withholding, would provide every household in the US with about $10,000?

some of it would be saved, which would recapitalize banks far more efficiently than sending it to Washington first, and the rest would be consumed, which would jump start the economy a lot faster then 100 or so more mini-Ground-Zero building projects that no one would have accountability for overseeing.

Feb. 16 2009 11:25 PM
Katherine

How big is the pool of mortgages in this country right now? If we paid off every mortgage in the country today, how much would that be? As much as TARP? Would all the derivatives go away? would all the banks be solvent? would the world start moving again?

Feb. 11 2009 08:25 PM
Jane from Morristown

Why oh why can CEO's not be held accountable? I recall President Obama saying that someone would be - but what does that mean? If you can't be fired and you can continue with business as usual, what IS accountability? Being called shameless?!

Feb. 10 2009 12:03 PM
bob from nyc

Why would we expect these people to change anything? They've risen to the top under this corrupt system so it is in their interests to maintain the status quo that has been so good to them. They'll shuffle around some vocabulary and definitions and talk the talk of change, but nothing will really change until it completely crumbles (most likely on the heads of those at the bottom).

Feb. 10 2009 12:00 PM
Bill from Hempstead

Having gotten wiped out by the tech bubble partly due to the lack of transparency by the companies I had invested in and partly due to my own greed and stupidity, I would like to see shareholder rights greatly expanded.
Basically, the large shareholders and insiders have been in the position to manipulate, filter and choke off information that all investors need to manage risk. It seems to me transparency is key for a healthy information feedback loop for investors. There is systemic risk in allowing price manipulation through the manipulation of information.

Feb. 10 2009 11:59 AM
rosa roth

All that is to say about this is said by Karl Denninger in his ticker:

http://market-ticker.org/archives/783-Obama-The-Market-Is-Issuing-You-A-WARNING.html

We the tax payers are being robbed.

Feb. 10 2009 11:54 AM
Cynthia from Brooklyn, NY

So glad John McCain lost the election. This could NOT have come from his administration.

Feb. 10 2009 11:53 AM
Tom from Manhattan

Harvard's Elizabeth Warren's analyses show that Henry Paulson lost one-third of taxpayer's TARP money the moment contracts were signed with banks. Tax-payer money suffered substantially more than one-third of the $350 Billion from subsequent falling markets.

FOLLOW THE MONEY: Where did it go, and why? And, where's the transparency?

Overseeing the Banks' Massive Bailout
2/9/2009
Harvard Law School professor Elizabeth Warren heads the congressional oversight panel for the $700 billion bank bailout program. She talks to MarketWatch's Ron Orol about the plan and the idea of a Financial Products Safety Commission. (Feb. 9)
www.marketwatch.com/video/

Feb. 10 2009 11:50 AM
Hugh from Crown Heights

"Faith in the system" or sheer cowardice -- a pathetic, destructive, elitist determination _not_ to challenge some of the articles of faith, the dogmas of American economics.

Feb. 10 2009 11:47 AM
Tom from Manhattan

Harvard Law School professor Elizabeth Warren says that analyses show that Henry Paulson lost one-third of TARP-taxpayer money the moment contracts were signed with the banks, and before market devaluations lost substantially more than one-third!

FOLLOW THE MONEY: Where'd it go? What about grilling Paulson et al...?

Overseeing the Banks' Massive Bailout
2/9/2009
Harvard Law School professor Elizabeth Warren heads the congressional oversight panel for the $700 billion bank bailout program. She talks to MarketWatch's Ron Orol about the plan and the idea of a Financial Products Safety Commission. (Feb. 9)
www.marketwatch.com/video

Feb. 10 2009 11:46 AM
Judith Targove from Highland Park, NJ

Simplifying it all: it's "Good Job, Brownie" all over again. Would we let Brownie guide FEMA in another weather catastrophe? I should think that it won't be long before bankers are as arrogant as bfore; and if Geithner pulls the government out too soon, bankers will feel strong and able to take risks -- again with no impunity. You mean there are no vice presidents or bright specialists who can't replace the top echelon?

Feb. 10 2009 11:46 AM
Hugh from Crown Heights

Just went to FinancialStability.gov -- a whole lot a nuthin' so far.

We'll see whether transparency really _is_. On other transparency issues, the Obama administration is hedging (as reported in the New York Times today).

Geithner has made some highly questionable claims about the history of government ownership (particularly by just ruling out examples like Sweden).

The myths behind the rhetoric are clear to anyone familiar with John Kenneth Galbraith. In particular, the myth of ownership = management. This has not been the case for decades.

The government _could_ take ownership, and _still_ leave management to existing structures, retaining the ownership card in the event that it is really needed.

As for the "floor" for private ownership . . . nonsense. This is the tacit guarantee of profit (at our expense) for private investors -- the privatization of profit, socialization of loss.

Geithner may refer to history, he doesn't know it.

Feb. 10 2009 11:45 AM
Hugh from Crown Heights

More privatization of profit and socialization of loss.

Geithner is doing _exactly_ what the Larry Summers/Alan Greenspan school of economics would dictate: Don't touch 'ownership' or 'management'; mere wealth indicates intelligence, competence, and virtue; let any benefits trickle down to the common people (who will be providing the money in the first place).

Feb. 10 2009 11:39 AM
hjs from 11211

RC
part true.
what's to stop amerikans from saving & buying US treasuries instead of consumption without end?

Feb. 10 2009 11:33 AM
RC

This is in Monday's The Wall Street Journal:

"China Seeks a New Market in Its Own Backyard
As Western Export Markets Languish, Beijing Encourages Consumption by Rural Residents to Help Revive Economic Growth"

http://online.wsj.com/article/SB123416442559062807.html

*The plan involves creating jobs, lowering distribution costs and improving product quality and availability in rural areas.

*Beijing will help set up 150,000 stores in the countryside this year, which could create 775,000 new jobs by 2010

*In recent months the government has also moved to expand state subsidies for farmers to buy electrical appliances.

*Economists and officials believe stronger consumption is necessary to offset the recent slowdown in exports. Domestic consumption accounted for about 39% of China's GDP in the first nine months of 2008, compared to about 69% of GDP in the U.S.

Ok understood. But hasn't what has been happening over the years is that the Chinese save and we borrow from them? If we are relying on debt for this stimulus and other countries start stimulating consumption on their end, won't that mean that we won't be able to sell as much U.S. Treasuries to finance our stimulus going forward? Which means higher interest rates, less production from China and higher prices?

Feb. 10 2009 11:22 AM

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