Archive for the ‘banking’ Category

“Dodd The Dodge” — Senator Weasels Away The Truth; And Not Artfully

March 18, 2009

Senator Chris  Dodd was quoted by several news sources including Jim Engle of Fox News Channel today as saying he did not write the specific language in the “stimulus” bill that protected the AIG bonuses.

He said the language he wrote was changed by somebody somewhere, perhaps in the conference committee.

But in a web posting in CNN’s political ticker this afternoon, CNN said Dodd told them he did write the AIG bonus language.

He didn’t before he did?

 Obama, Congress, Treasury, Fed: Shameful Mismanagement of Your Money, Recovery

“Senate Banking Committee Chairman Christopher Dodd told CNN’s Dana Bash and Wolf Blitzer Wednesday that he was responsible for adding the bonus loophole into the stimulus package that permitted AIG and other companies that received bailout funds to pay bonuses. Officials with the Obama administration pushed to make sure contracts for bonuses at companies receiving federal bailout money stayed in place, a Treasury Department official told CNN.”

“The clause in effect created the loophole that officials at AIG say is requiring them to pay millions of dollars in bonuses after receiving funds. On Tuesday, Dodd denied to CNN that he had anything to do with the adding of that provision. ”

Dodd is a snake and should be punished….

But he also seems to indicate that White House staffers suggested the language that allowed the AIG bonuses….Or Treasury (Geithner) and perhaps Larry Summers….

Did Obama White House Fuel AIG Bonus Mess To Enact Tougher Rules With Public Support, “Outrage”?
(You bet they did)

The stimulus was a rush job caused by a president that proclaimed a national crisis.  The Congress needs to start doing  a much better job — and not allow the procss to be short circuited again…..  This group is disgraceful…

The president railroaded a willing Democratic congress on the stimulus.

The push to get the bill through was so frantic members of Congress didn’t have a chance to read all 1,071 pages of the document before they could vote.

Don’t forget what a Texas Republican said about the stimulus:

Why The Rush, Really?

“The longer a piece of garbage lays out in the sun the worse it stinks,” said Republican Representative John Culberson (R-TX), refeering to the Obama stimulus.  “That’s why the bill was hidden and  kept off the Internet.”

“This is a crime of deceit put upon the American people,” he said.

“This bill was intentionally hidden from lawmakers and the public.”

“This is one of the largest outrages ever committed,” said.

“Nobody read this bill before it was passed,” he said.

The ticker entry at CNN is marked 6:03 PM March 18:

Shame on Dodd but more importantly shame on President Obama and all the Democrats in congress for running the stimulus through the legislative process with no committee hearings and too little thought.  Every single time we’ve seen such rushed legislation we wind up with very bad law.

For Obama and Democrats to act “outraged” not at the AIG bonuses is pure theater and is no accident: Obama is using the AIG Bonus dust up as an excuse to overhaul rules for all companies accepting “bailout mone” and that smakes of a communist or socialist takeover of our capitalism entirely….

 Dodd Allowed AIG To Thrive in His State, Approved Bonuses: Now Throws Them Under The Bus

Obama: Look the other way but spend more faster

Stimulus: Way Fewer Jobs Than You Thought

Thowing Money Around Isn’t Always the Cure

From February 14:

House Financial Services Committee Chairman Barney Frank says he sees a “happy ending” to the nation’s economic woes within several years, has “a lot of confidence” in the Obama administration economic team, and argues that most of the money being spent to revive US banks “is going to be repaid.”

Government policy will change as a result of the nation going through tough economic times, Frank said. There will be “a renewed appreciation for the importance of the government setting rules,” he said. “You will get a new, systemic-risk regulatory regime.”

Despite the market’s reaction, “I have a lot of confidence in Geithner and [Lawrence] Summers,” who heads Obama’s National Economic Council, Frank said.

Read it all:
 Barney Frank: Happy ending possible despite economic mess

Government doesn’t get more distasteful…

On February 13:

Today I voted against the largest spending bill in the history of the United States Congress. This bill violated House rules, was crafted in secret by unelected Democrat staff, and gave the American people only 15 hours to read nearly 1,500 pages. All so Speaker Pelosi could make her trip to Italy.

This bill is also full of pet projects and wasteful spending. How does $300 million for golf carts help stimulate the economy? Economists from around the country have said this bill will do nothing to stimulate the economy and it’s easy to see why.

In just 18 legislative days, this Congress has spent over $1.1 trillion dollars and vastly expanded the federal government. For the rest of the 111th Congress, I will continue fighting to protect the American economy and your hard earned tax dollars from the free-spending Democrat majority.

–John Abney Culberson (R-TX)

Obama, Socialism, Fear, Lack of Confidence: Tanking Stocks, Skyrocketing Debt, Recovery Doomed This Year

March 7, 2009
This has the feel of a full scale assault on capitalism….

Some investors and pundits blame Obama for the market’s dismal performance. He inherited a mess, but his rhetoric isn’t helping.
Obama’s Radicalism Is Killing the Stock Market

NYT: After March 6 Economic News, “2009 is Probably a Lost Cause”

Tom Petruno, Market Beat
Los Angeles Times
March 7, 2009
The stock market is supposed to be a bet on the future.

The market’s verdict so far this year: There is no future.

The continuing meltdown in share prices, the worst since the Great Depression, now has become Exhibit A in the political battle between the Obama administration and its harshest critics.

Conservative pundits including Rush Limbaugh and CNBC-TV’s Larry Kudlow assert that the president is waging war against capitalism itself, with his tax-hike proposals, social programs and banker-bashing rhetoric. That has sent disillusioned investors fleeing, they contend.

Well, something has. After diving 38% last year, share prices are down 24% just since Jan. 1, as measured by the Standard & Poor’s index of 500 big-name issues.

Despite a slight uptick on Friday, stocks plummeted 7% this week alone.

An outside view of the New York Stock Exchange on Wall street. ...

The decline from the market’s peak in October 2007 now is 56.3% — the steepest drop since the plunge of 1938 to 1942, when no less than the future of democracy was at stake.

“I think everybody is afraid of Obama,” said Todd Leone, a veteran stock trader at Cowen & Co. in New York. “They’re afraid he’s a socialist.”

Yes, the S-word.

Others say the market is more upset with the administration’s failure to stabilize the ravaged banking system — a Herculean task that Wall Street had hoped would be the first major challenge the White House tackled.

“Every time Obama talks about something like healthcare, the market’s reaction is — ‘No, the banking crisis!’ ” said Jeffrey Schappe, investment chief at BB&T Asset Management in Raleigh, N.C.

Treasury Secretary Timothy F. Geithner still hasn’t provided specifics on his plan to get rotting loans off the balance sheets of major banks, a step seen as crucial to jump-starting new lending.

For his part, the president this week advised investors to look beyond what he called “day-to-day gyrations” in share prices.

He then ventured into territory where few other presidents have gone. Perhaps taking a cue from fellow Democrat Warren E. Buffett, Obama offered an opinion on whether stocks were bargains.

“What you’re now seeing is profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal, if you’ve got a long-term perspective on it,” he said Tuesday.

He didn’t get the lingo right, assuming he meant to say “price-to-earnings ratios,” a measure of stock prices relative to earnings per share. That flub caused snickering among market pros.

Read the rest:

 Can Democracy Fail With Obama’s Socialist Help?

George W. Obama?

 Venezuela’s Chavez Urges Obama, U.S. Down Socialist Path

Obama’s Radicalism Is Killing the Stock Market

NYT: After March 6 Economic News, “2009 is Probably a Lost Cause”

Obama’s First Weeks: Economic Disaster, Socialist Agenda,

Blaming Republicans For Doubling The Debt; Obama Aims To Do The Same

February 14, 2009

President Barack Obama would lose his quiet struggle against nicotine addiction if he dispatched the Secret Service to score him a carton of Camels. So why is Obama fighting Washington’s addiction to debt by . . . sinking Washington deeper into debt?

On Monday, Obama correctly criticized Republicans as the “folks who presided over a doubling of the national debt. . . .” Former President George W. Bush, largely in cahoots with GOP lawmakers, amassed $3.35 trillion in deficits between 2002 and 2009. This disgraceful legacy has crippled Republicans from coast to coast and relegated the party to fiscal therapy for the foreseeable future.

But rather than correct the GOP’s recent debt-swelling ways, Obama is exacerbating this mess.

“Obama pledged to fix what he considers Republican governing errors, not double down on them,” Heritage Foundation fiscal analyst Brian Riedl wrote Wednesday. “Adding the ‘stimulus’ bill to a realistic budget baseline yields a projected 2010-17 cumulative budget deficit of $8.4 trillion-2.5 times the size of President Bush’s deficits over the equivalent eight-year time period.”

The $789 billion Obama-Pelosi-Reid-Collins-Snowe-Specter spending blitz is a bargain compared to the $2.25 trillion in fresh bailout funds that Secretary Timothy Geithner unveiled in the Treasury’s Cash Room Tuesday. This will buy America “new programs and extraordinary action,” Geithner promised.

Congress must pass an omnibus appropriations bill before March 6. Cost: $400 billion.

And don’t forget the regular federal budget, which funds FBI, FDA, FTC, and hundreds of other beloved acronyms. It likely will weigh in at more than $3 trillion.

If all this stimulus worked-from 2008’s $168 billion in tax-rebate checks to the $13.35 trillion bailout-and-nationalization orgy that turned Bush’s final days pornographic-the economy would be hot and bothered. Instead, this constant stimulation functions like Viagra in reverse.

Whether you applaud this spending or consider it the latest shambles erected by America’s reckless political class, the question remains: From where will all this money come?

“There is no tooth fairy,” economist and author Stephen Moore told the Manhattan Institute Wednesday. “That’s the fundamental fallacy of the Keynesian model. The money has to come from somewhere.”

“The government cannot put into the economy what it first did not take out,” said Americans for Tax Reform’s John Kartch. “That would be like scooping up water from one side of a lake, dumping the water into the other side of the lake, and announcing that you’ve just filled the lake.”

Try this Washington accounting right now: Take your house keys from one pocket and transfer them to the other. Congratulations! You now own two homes.

To fund his continuation of Bush’s breathless spending, Obama probably will shake the tin cup and pray that lenders come running.

“Over two years, Washington is set to borrow a staggering $3.5 trillion from a shrinking global savings pool,” Riedl explained. But who has $3.5 trillion these days? U.S. and foreign banks are gasping. Europe’s governments are wheezing. What will happen when China is too winded to attend Treasury’s bond auctions? Either the Fed will buy those bonds, re-enacting the aforementioned house-key trick, or the Treasury will decorate its increasingly dreary bonds by offering investors higher interest rates. Steeper interest, of course, will slam the economic brakes just as Uncle Sam floors the accelerator.

Washington also could raise taxes. This foolishly would siphon the gas tank before refilling it, while inefficiently spilling several gallons on the ground.

Why not just print enough money to pay these bills? If that worked, Zimbabwe’s annual inflation would not stand at 231-million percent. The one-year, 103.3-percent increase in America’s monetary base — from $860.6 billion on January 30, 2008 to $1.75 trillion last January 28 — hardly foreshadows price stability.

What will happen when America’s gargantuan debt is revealed as little more than government-issued Kleenex? Dr. Lawrence Parks, executive director of the Foundation for the Advancement of Monetary Education, warns that “our monetary system is unstable and will blow up, because there is no longer any market-based self-correcting mechanism for increasing financial leverage, increasing debt, or increasing the money supply.”

It’s almost enough to make one start smoking.

By Deroy Murdock
Reprinted with permission from National Review Online

Stimulus: China Will Fund U.S. Debt But “We Hate You Guys”

How Banks Are Worsening the Foreclosure Crisis

February 13, 2009

The bad mortgages that got the current financial crisis started have produced a terrifying wave of home foreclosures. Unless the foreclosure surge eases, even the most extravagant federal stimulus spending won’t spur an economic recovery.

Business Week

The Obama Administration is expected within the next few weeks to announce an initiative of $50 billion or more to help strapped homeowners. But with 1 million residences having fallen into foreclosure since 2006, and an additional 5.9 million expected over the next four years, the Obama plan — whatever its details — can’t possibly do the job by itself. Lenders and investors will have to acknowledge huge losses and figure out how to keep recession-wracked borrowers making at least some monthly payments.

So far the industry hasn’t shown that kind of foresight. One reason foreclosures are so rampant is that banks and their advocates in Washington have delayed, diluted, and obstructed attempts to address the problem. Industry lobbyists are still at it today, working overtime to whittle down legislation backed by President Obama that would give bankruptcy courts the authority to shrink mortgage debt. Lobbyists say they will fight to restrict the types of loans the bankruptcy proposal covers and new powers granted to judges.

Read the rest:

A foreclosure sign is posted in front of a townhouse in Herndon, ... 
A foreclosure sign is posted in front of a townhouse in Herndon, Virginia. President Barack Obama’s quest to bridge Washington’s sharp political divides has been dealt another blow with the surprise exit of his commerce secretary pick, Republican Judd Gregg.(AFP/File/Paul J. Richards)

Gregg: ‘I’m Too Conservative’ for Obama

February 13, 2009

Republican Sen. Judd Gregg said Friday that he pulled out of the job of commerce secretary after realizing that “I’m just going to be a little too conservative” for President Obama’s administration.

Associated Press

If you’re going to be on a football team, “you’ve got to pull out and block on every play, you can’t do it on every other play,” the senator said.

“I didn’t feel comfortable going forward because of my individuality, for lack of a better term,” Gregg said during an appearance Friday morning on CNBC.

Gregg said he thinks Obama is on the right track in attempts to stabilize the shaky financial system and that the proposal of Treasury Secretary Tim Geithner — much criticized as being too vague — is going to be an extremely strong initiative once it is filled out with details.

At the same time, Gregg said his conservative inclinations would show up in terms of fiscal spending.

Regarding the $790 billion economic stimulus plan, “I think there was a tactical error made … in that you allowed the appropriators to write the package,” said Gregg.

He said he thinks the stimulus plan “should be focusing mainly on trying to stabilize the real estate markets, and promoting small business and getting jobs.”

Read the rest:

World stocks sag on concerns about Obama plans

February 12, 2009

Thongs of happy Americans turned out on the Mall in Washington on January 20 to cheer Barack Obama’s inauguration.

And Europeans and much of the rest of the world also embraced the “hope” of Obama — as exemplified by a gathering in Berlin last July 24 before some 200,000 people.

After the troubles of the last few weeks it is not at all certain that the Obama hope remains alive — maybe it is on life support.

Pan Pylas of the Associate Press wrote today: “The raft of grim corporate news in Europe comes as the markets have largely given the thumbs-down to the passing of a $789 billion stimulus bill in Congress and U.S. Treasury Secretary Tim Geithner’s bank rescue plan, which could cost up to $2 trillion. On the Geithner plan, investors worried about the lack of detail, specifically the absence of any indications about how the banks’ toxic assets would be bought.”

“Policymakers will argue these details will be hammered out over time, but in the meantime the economic and financial black hole will potentially deepen, and for markets this means risk aversion will likely remain elevated,” said Daragh Maher, an analyst at Calyon Credit Agricole.

Read the entire story:

Above: Obama in Berlin.


Dow Drops 200 in 30 Minutes As Stimulus Rejected

Wall Street Mocked American Values

February 11, 2009

The announcement last week that Trader Monthly magazine was ceasing publication was one of those moments when a chance arrow of history scores a perfect bull’s eye on a deserving target. The current recession, brought on at least in part by Wall Street’s bonus lust, has claimed countless innocent victims. But in this case it has finally delivered a comeuppance to our era’s loudest, gaudiest, cockiest champion of Wall Street excess.

By Thomas Frank
The Wall Street Journal

Those who still single out former Merrill Lynch CEO John Thain as a symbol of extravagance should take note. Yes, the man once spent over a million dollars having his office remodeled and went on to arrange questionable bonuses for the year in which Merrill lost billions and sold itself to Bank of America.

Just a few years ago, however, the bonus cognoscenti at Trader Monthly depicted Mr. Thain as something of a piker. In an article that began with the sentence, “What, did somebody forget a zero?” they sneered at Mr. Thain’s “reported compensation,” which they claimed was $6 million for 2006, back when he was CEO of the New York Stock Exchange.

Read the rest:

Top Banking Committee Senator Attacks Obama, Geithner Bank Bailout

February 11, 2009

The top Republican on the Senate Banking Committee is attacking the Obama administration’s proposal to leverage for than $2 trillion into the shaky financial system.

Sen. Richard Shelby, sharing the general reaction of Wall Street, complained vigorously that the new plan outlined by Treasury Secretary Timothy Giethner on Tuesday was too short on specifics.

Shelby told CBS’s “The Early Show” he thinks Geithner “wasted about three or four hours of the Senate’s time” in trying to explain the complex program. The Alabama Republican said that senators wanted to know “where the specifics are, and he doesn’t have them.”

Shelby acknowledged that the new administration is in unfamiliar territory, but said that it must “do better than this.”

–Associated Press


The Los Angeles Times said:

The dearth of details, which sent the stock market into a tailspin, reflects a double bind for the Obama administration.

Read the rest:

U.S. Losses May Reach $3.6 Trillion; Banking System “Effectively Insolvent”

January 21, 2009

U.S. financial losses from the credit crisis may reach $3.6 trillion, suggesting the banking system is “effectively insolvent,” said New York University Professor Nouriel Roubini, who predicted last year’s economic crisis.

By Henry Meyer and Ayesha Daya

“I’ve found that credit losses could peak at a level of $3.6 trillion for U.S. institutions, half of them by banks and broker dealers,” Roubini said at a conference in Dubai today. “If that’s true, it means the U.S. banking system is effectively insolvent because it starts with a capital of $1.4 trillion. This is a systemic banking crisis.”

Losses and writedowns at financial companies worldwide have risen to more than $1 trillion since the U.S. subprime mortgage market collapsed in 2007, according to data compiled by Bloomberg.

President Barack Obama will have to use as much as $1 trillion of public funds to shore up the capitalization of the banking sector, following the $350 billion injection by the Bush administration, Roubini told Bloomberg News. Congress last year approved a $700 billion rescue fund, of which half remains to be disbursed.

Bank of America Corp., the largest U.S. bank by assets, posted a quarterly loss of $1.79 billion last week, its first since 1991, and received $138 billion in emergency government funds. Citigroup Inc. posted an $8.29 billion fourth-quarter loss, completing its worst year, and plans to split in two under Chief Executive Officer Vikram Pandit’s plan to rebuild a capital base eroded by the credit crisis.

‘Bankrupt’ System

“The problems of Citi, Bank of America and others suggest the system is bankrupt,” Roubini said. “In Europe, it’s the same thing.”

Stocks in Europe, Canada and Brazil dropped yesterday on speculation government efforts to shore up the financial industry will fail to stem the deepening global recession. The U.K.’s Royal Bank of Scotland Group Plc said it expects to post a loss of as much as 28 billion pounds ($41 billion) for 2008 and the government got ready to raise its stake in the lender.

Oil prices will trade between $30 and $40 a barrel all year, Roubini predicted.

“I see commodities falling overall another 15-20 percent,” Roubini said. “This outlook for commodity prices is beneficial for oil importers, it’s going to imply that economic recovery might occur faster, but from the point of view of oil exporters, this will be very negative.”

Oil has tumbled 77 percent from its July high of $147.27 as the global economy sinks into recession, straining the budgets of crude exporters. Saudi Arabia, Oman and Dubai, the second- largest sheikdom in the United Arab Emirates, have said they will post budget deficits this year.

Crude oil for February delivery fell to $32.70, down 10.4 percent from last week’s close and the lowest since Dec. 19, on the New York Mercantile Exchange today. The contract traded at $33.37 a barrel at 10:45 a.m. London time.