econimic stimulus: The Financial Crisis and Geithner's Faux Solution
- 04/09/09 04:29 PM
He is using TARP funding, Federal Reserve Funds, Fannie Mae & Freddie Mac funds, and FDIC guarantees to make subprime investments and subprime loans with govt. guarantees to insolvent (subprime) financial institutions. The risk to the taxpayers is measured in trillions of dollars.I don't think investor confidence will be earned by Geithner's plan to restore Wall Street's House of Cards with high risk investment of taxpayer funds and his bogus Stress Tests and changes coerced from the FASB to relax its standard for mark to market accounting all in leiu of substantive regulatory reform. There may be some short term success … (0 comments)
econimic stimulus: Geithner’s Administration of TARP Denies Us The Promised Transparency
- 04/05/09 07:15 PM
As a condition for the approval of TARP funding Congress appointed Dr Warren to oversee the Treasury Secretary’s use of TARP funds. Dr. Warren, the Leo Gottlieb Professor of Law at Harvard Law School, has distinguished herself researching bankruptcy and debt over many years and she has never shied from confronting political hypocrisy. According to James Dolan, reporting in The Observer, Dr Warren will call for the removal of top executives from Citigroup, AIG, and other institutions that have received TARP funds in her report this week to Congress in which she questions the administrations approach to the use of TARP … (12 comments)
econimic stimulus: The Outlook for any return of Consumer Spending is Black - Pitch Black
- 03/21/09 09:24 AM
The Financial Times Lex column on the: US Economy, dated 17 March 09, stated that the outlook for consumers and for any increase in consumer spending is pitch black and in need of serious deleveraging. According to the Federal Reserve data on the 4th quarter ’08, the consumer’s household balance sheet is bloated by a ratio of total gross debt to personal income of 133%. Compare that to an average of 90% during the 1990’s and you’ll appreciate the magnitude of the problem. The Lex article states: Assuming no changes in household income, returning to the 90% ratio requires consumer liabilities … (2 comments)
econimic stimulus: The Fox (Hedge Funds) Will Save the Chickens (Public Funds)
- 03/15/09 07:43 AM
Secretary Geithner’s plan for a public/private investment partnership to address the greatest economic challenge of our time, toxic assets (measured in the trillions of dollars), is like asking the fox to save the chickens. Geithner's public/private fund will invite hedge fund managers to leverage public funds, borrow public funds at the ‘most favorable rates,’ and use the government’s line of credit to buy up toxic assets, clean them up, and resell them. To state it simply the hedge fund managers are not doing this out of a sense of patriotic duty they are doing it for a profit. Why is it … (0 comments)
econimic stimulus: Major Banks & Their Lawmakers don't like FASB mark-to-market Accounting Std
- 03/12/09 09:11 AM
Investors, on the other hand do, stating that it gives them greater insight into the true present market value of a Banks' assets. Now top U.S. lawmakers acting on behalf of their constituents, the Banks, are threatening to take action themselves if the Financial Accounting Standards Board (FASB) doesn't revise their standards. According to Banks and their lawmakers the current standards have forced Banks to record billions of dollars in asset write-downs in order to reflect the current market value of these assets. However, when the market values of assets were rocketing up to irrational highs the Bankers were more than … (2 comments)
econimic stimulus: Consumer Debt is at Saturation Levels
- 02/26/09 05:07 PM
Consumer spending is responsible for 70% of US economic growth according to an article written by Hale "Bonddad" Stewart, a former Bond Broker, for the Huffington Post dated 26 Feb 2009. Hale also states that the outstanding Total Household Debt has increased from 47% of GDP in 1981 to 96% of GDP in the third quarter of 2008. The fact that American Consumers are dangerously over extended on their debt to income ratio is no surprise but to see it represented as 96% of GDP really drives the point home that we are a nation of debtors. Hale states that the … (10 comments)
econimic stimulus: Government Regulators Subject 19 Banks to ‘Mild Discomfort' Tests
- 02/25/09 10:05 AM
The assumptions for the baseline scenario and the adverse scenario used to develop the so-called ‘Stress Tests' are overly optimistic and fall far short of any 'worst case' scenario to the point that some may charge that they are more like a ‘Best Case' scenario and a ‘Mild Discomfort' scenario. The baseline scenario assumes: Gross Domestic Product (GDP) falling 2 percent this year, Unemployment rising to 8.4%, and Home prices dropping another 14%. The adverse scenario assumes: GDP falling 3.3 percent, Unemployment rising to 8.9%, and Home prices dropping another 22% With the exception of Citi Bank (apparently it receives special treatment) … (5 comments)
econimic stimulus: We Need Restitution for Damages!
- 02/23/09 10:02 AM
Reckless, irresponsible, and criminal behavior by the executive officers in our financial institutions has damaged investors (corporate, public agencies, non-profits, & private), customers (businesses, public agencies, non-profits & individuals), competitors, markets, government income (local, state, and federal), taxpayers, and insurers. Insurance companies are at risk of sizeable losses for claims filed against policies written for Director and Officer Insurance, Professional Liability (E&0) Insurance, Fiduciary and Trustee Insurance, Crime/Fidelity Insurance. Etc The perpetrators of this crisis have engaged in misrepresentation by misrepresenting risks, over stating performance, and failing to disclose their financial condition. The Ratings Agencies are no less than co-conspirators who, … (3 comments)
econimic stimulus: Banker's Who Drove U.S. into the Ditch are Managing The Bailout & Recovery
- 02/13/09 05:27 PM
I just finished watching Bill Moyer's Journal on PBS. According to Bill Moyers, key administration officials came from the same banks that taxpayers are now bailing out. I checked this out on line and found that: Mark A. Paterson, former lobbyist at Goldman Sachs is now Geithner's Chief of Staff Jacob J. Lew, former CFO of Citigroup's Alternative Investments is the new Deputy Secretary of State Michael Froman, another CFO from Citigroup, is now assistant to the President and Deputy National Security Advisor for International Economic Affairs. One of Froman's Deputies, David A. Lipton, was a Managing Director and Head of … (3 comments)
econimic stimulus: IRS Decision Enables Banks to Shift Their Losses to the Public
- 02/08/09 09:36 AM
So, do IRS decisions (the IRS is a bureau of the Dept. of Treasurey) that function as change to tax laws carry the same weight as law? Yes, they do. A tax decision which can only be interpreted as being written specifically for the benefit of banks was issued just prior to the Wells Fargo & Co. purchase of Wachovia Corp. This is what happened. Two days before the October 2nd 2008 announcement of the Wells Fargo plans to purchase Wachovivia, the Internal Revenue Service issued the controversial tax change. What was the change? Prior to this decision, businesses, including banks, were restricted in the amount by which they could lower … (2 comments)
econimic stimulus: How Do You Make Sense of This (TARP)
- 02/05/09 06:01 AM
Elizabeth Warren, chairwoman of the Congressional Oversight Panel for the bailout funds, reported to the Senate Banking Committee on Thursday that Treasury in 2008 paid $254 billion and received assets worth about $176 billion. She Explained that the figures were reached by extrapolating the results of a study of 10 government transactions, comparing the price paid by Treasury and the value of the asset at the time of purchase. The Mission of the U.S. Department of the Treasury as presented on their website is to: "Serve the American people and strengthen national security by managing the U.S. Government's finances effectively, promoting economic growth … (8 comments)
econimic stimulus: 2.5 million Jobs lost in 2008 & a 2.5 million Loss of Jobs forecast for 2009
- 01/26/09 04:48 PM
At the United States Conference of Mayors in January of 2009 it was reported that our labor market is in a severe decline. It was explained that December 2008 was the 12th consecutive month of job losses, and that the cumulative loss for the year was more the 2.5 million. It was also forecast that this only marks the halfway point. It is anticipated that another 2.5 million jobs will be lost in 2009 which includes a first quarter 2009 loss of 1.5 million jobs. To put it simply, the national housing market is going to get worse before it gets … (2 comments)
econimic stimulus: Economic Stimulus to businesses and Health Care for Workers >50
- 11/20/08 03:20 PM
Workers age 50 and older are rated at higher risks when it comes to health care insurance. Higher risks mean higher premiums for the businesses that provide health care coverage, for the employees who are paying for a portion of the health care costs, and for self employed individuals who are frequently uninsured or underinsured. Our govt. should consider lowering the age for medicare incrementally to 62, 59, 56, 53 and then 50 years old. With each incremental expansion of medicare we would reduce to the costs to businesses, reduce the costs to individuals, and increase the number of citizens with … (0 comments)
He is using TARP funding, Federal Reserve Funds, Fannie Mae & Freddie Mac funds, and FDIC guarantees to make subprime investments and subprime loans with govt. guarantees to insolvent (subprime) financial institutions. The risk to the taxpayers is measured in trillions of dollars.I don't think investor confidence will be earned by Geithner's plan to restore Wall Street's House of Cards with high risk investment of taxpayer funds and his bogus Stress Tests and changes coerced from the FASB to relax its standard for mark to market accounting all in leiu of substantive regulatory reform. There may be some short term success … (0 comments)
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