financial recovery: 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)

financial recovery: 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)

financial recovery: Pension Insurance Fund Losses Could Cost Taxpayers 100's of Billions More - 03/30/09 09:38 AM
Billions of dollars from pension insurance funds held by the Pension Benefits Guaranty Corporation (PBGC) have been invested in speculative investments in emerging foreign markets, real estate, and private equity funds according to the Boston Globe, Michael Kranish. The federal agency that insures the retirement funds of 44 million Americans is at risk of becoming insolvent leaving taxpayers the responsibility for its debts.
The former Agency Director, Charles Millard, was appointed by President G. W. Bush and his appointment was approved by the Senate. After receiving his appointment, Millard embarked on a new investment policy which was approved by his board … (6 comments)

financial recovery: Geithner's TAP - Taxpayer's Losses - 03/23/09 06:39 AM
Suppose we segregate the MBS and CDO assets currently held by banks into 3 separate tranches:
Assets backed by Prime Mortgages; Assets backed by a blend of Prime and Sub-prime Mortgages; and Assets backed by Sub-prime and Alt-A Mortgages. Assets backed by Prime Mortgages were properly rated as AAA investments and are performing well. The Banks will not want to sell these assets and they wont be offered to the FDIC to liquidate via the TAP sanctioned auctions.
Assets backed by a blend of Prime and Sub-prime Mortgages are underperforming at present and the current market price for these assets is … (4 comments)

financial recovery: Is It Any Wonder? - 03/22/09 06:03 AM
Historically huge amounts of public funds measured in trillions of dollars are being allocated to private corporations who are then using the taxpayers money for protecting and preserving the status quo, rewarding wrong doers, and buying influence with politicians in office. Here is a quick review of their actions to date.
Congress approves 700 Billion in TARP funds without enacting adequate constraints on the use of these funds, sufficient regulatory oversight, auditor insight, or any legal means to seek corrective actions. The taxpayers money in TARP has been used to: 
Pay 78 billion over market price for shares of stock and … (0 comments)

financial recovery: 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)

financial recovery: Public Funds on TAP or Geithner’s Toxic Asset Plan (TAP) - 03/17/09 06:15 PM
Treasury Secretary Geithner is proposing the use public funds to provide financing and guarantees to private investors (hedge funds) to buy mortgage backed Toxic Assets. The problem is how to set a fair market price for these assets. The Banks are lobbying for relief from mark-to-market accounting practices because the market conditions are driving the market price of these assets to a mere fraction of their purchase price. However you establish the market value of these assets, the investors want to buy them at a price low enough to ensure that they can sell them at a profit. If the price … (4 comments)

financial recovery: 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)

financial recovery: 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)

financial recovery: The Govt. Can’t Fix the Economy - 03/11/09 05:45 PM
Government actions to date have not and will not make the banks solvent, restore liquidity, or stabilize the economy. Government actions have not been bold enough or strategically effective and they have done nothing to restore the confidence of entrepreneurs, investors, and consumers.
Secretary Geithner’s failure to produce a comprehensive plan with specific details that lay out the steps necessary to accomplish tactical objectives in a manner that will incrementally lead to the accomplishment of strategic goals with clear measures of effectiveness has support for the new administration flagging. The lack of transparency and the lack of responsible use and supervision of … (2 comments)

financial recovery: Federal Negotiators Accept Greater Taxpayer Exposure - 03/01/09 07:36 AM
I accept the fact that our government has to take bold action to stabilize the financial markets. However, my confidence in the government's actions is repeatedly shaken and continually eroded by the lack of a structured plan that produces predictable behavior and repeatable successful outcomes by government agents who are responsible for representing taxpayer’s interest.
Federal negotiators are ready to provide American International Group, Inc (AIG) $30 billion in additional federal assistance and revamp the AIG bailout with terms that increase taxpayers’ exposure to losses.
Repayment of the original $ 40 billion was supposed to be in cash with interest. Additional … (3 comments)

financial recovery: How Will it Work - Term Asset-Backed Securities Loan Facility (TALF) - 02/28/09 06:01 PM
TALF is a Federal Reserve credit facility that was created to assist credit markets meet the needs of consumers and small businesses by facilitating the issuance of asset-backed securities (ABS) and improving market conditions for ABS. TALF was rolled out by the U.S. Department of the Treasury and the Federal Reserve on 19 February 2009 as one part of the Financial Recovery Plan announced by Secretary Geithner on February 10, 2009.
The Federal Reserve Bank of New York (FRBNY) will make up to 1 trillion dollars of loans under the TALF. TALF loans will be non-recourse to the borrower, and will … (0 comments)

George Bennett, Inactive Principal Broker, GRI (Inactive)

George Bennett

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