Archive for the ‘toxic’ Category

Geithner can still pay off for Obama

March 22, 2009
The Treasury chief has stumbled, but firing him now would be a mistake.
Doyle McManus
The Los Angeles Times
March 22, 2009
Is Treasury Secretary Timothy F. Geithner becoming a toxic asset for the Obama administration?

It’s a question people in Washington are starting to ask.

Geithner, though considered a brilliant policy wonk and financial strategist behind closed doors, has not been a hit with the public or Congress as the administration struggles to tame the economic crisis.

Instead, he has become the administration’s chief magnet for negative attention. He spent his confirmation hearings explaining why he failed to pay some of his taxes. He muffed the rollout of his most important policy initiative, the bank rescue plan. He failed to stop AIG from paying out $165 million in bonuses — which reminded Congress and the public that he was one of the people who presided over the AIG deal in the first place.

Cabinet secretaries are supposed to deflect fire away from the president, not draw it toward him. But President Obama is now spending a good chunk of his time coming to the defense of his beleaguered Treasury chief. “He is a smart guy, and he’s a calm and steady guy,” Obama said in his appearance on Jay Leno’s “Tonight Show” on Thursday, a deliberately chosen opportunity to reach out to middle America. “I don’t think people fully appreciate the plate that was handed him. This guy has not just a banking crisis; he’s got the worst recession since the Great Depression. … I think Geithner is doing an outstanding job.”

Read the rest:
http://www.latimes.com/news/opinion/com
mentary/la-oe-mcmanus22-2009mar22,0,
4847534.column

Obama Supports Geithner (Again)
http://news.yahoo.com/s/ap/200
90322/ap_on_go_pr_wh/obam
a_interview

Toxic Geithner Almosts Ready With Toxic Asset Plan for Banks

March 21, 2009

Treasury Secretary Timothy Geithner is putting the finishing touches on a plan to get toxic assets off the books of the country’s struggling banks, according to administration and industry officials. The plan could be announced as soon as Monday, they said.

By Martin Crutsinger, Ap Economics Writer

Geithner’s proposal will employ the resources of the Federal Reserve and the Federal Deposit Insurance Corp. to make the government’s $700 billion financial rescue fund go further, these officials said Friday.

The Fed and the FDIC are being tapped for support because the prospects for getting additional money from Congress for the bailout effort have dimmed significantly with this week’s uproar over millions of dollars in bonuses provided to troubled insurance giant American International Group Inc.

The officials, who spoke on condition of anonymity because they were not authorized to speak publicly about Geithner’s plan, said it will have three major parts. One part will be an effort Geithner spoke about last month which would be the creation of a public-private partnership to back purchases of bad assets by private investors.

A second part of the plan will expand a recently launched program being run by the Federal Reserve called the Term Asset-Backed Securities Loan Facility, or TALF. That program is providing loans for investors to buy assets backed by consumer debt in an effort to make it easier for consumers to get auto, student and credit card loans. Under Geithner’s proposal, this program would be expanded to support investors’ purchases of banks’ toxic assets.

The third part of the Geithner plan would utilize the resources of the FDIC, the agency that guarantees bank deposits, to purchase toxic assets.

When Geithner announced the administration’s overhaul of the troubled financial rescue program on Feb. 10, it was widely panned by investors with the Dow Jones industrial average plunging by 380 points.

Read the rest:
http://news.yahoo.com/s/ap/20090321/ap_o
n_go_ca_st_pe/bank_rescue;_ylt=Auy8CbRdH
Qfepa.554ZbNdqs0NUE;_ylu=X3oDMTI1cWZy
YXJyBGFzc2V0A2FwLzIwMDkwMzIxL2Jhbmtf
cmVzY3VlBHBvcwMyBHNlYwN5bl90b3Bfc3
RvcnkEc2xrA3RveGljYXNzZXRwbA

Obama’s Real Problem: He Still Wants Toxic Acid Bank Bailout $750B, Budget of $3.6 Trillion, and More

March 18, 2009

If you didn’t like reading about A.I.G. brokers getting millions in bonuses after their company — 80 percent of which is owned by U.S. taxpayers — racked up the biggest quarterly loss in the history of the Milky Way Galaxy, you’re really not going to like the bank bailout plan to be rolled out soon by the Obama team. That plan will begin by using up the $250 billion or so left in TARP funds to start removing the toxic assets from the banks. But ultimately, to get the scale of bank repair we need, it will likely require some $750 billion more.

That according to Thomas Friedman of the New York Times.
http://www.nytimes.com/2009/0
3/18/opinion/18friedman.html?_r=1

Add to that the president’s budget just unveiled:

“From the standpoint of the Congress, there’s only so much that we can absorb and do at one time,” Sen. Daniel Inouye (D-Hawaii), the chairman of the Appropriations Committee, told POLITICO Tuesday.

From the standpoint of the taxpayers we may have already exceeded the common sense limit….

President Obama urged more speed just yesterday for his next budget: a $3.6 trillion beheamouth.

That doesn’t include all the health care money Obama wants by a long shot:
Health care overhaul may cost another $1.5 trillion or more

Obama’s budget doesn’t yet fully address the climate change measures he wants: Cha-ching:
 Obama climate plan could cost $2 trillion

And, although the president said he wouldn’t think of fixing everything, he did say, “The cost of our health care is too high to ignore. The dependence on oil is too dangerous to ignore. Our education deficit is growing too wide to ignore.”  Don’t forget education.  And on and on.

We must have money for energy, education, health care and climate but, sorry, we are short on defense and veterans and other things….

And the economy has yet to rebound and might need more speedy stimulus.

 Gates readies big cuts in weapons

Obama Plans to Charge Wounded Heroes for Treatment

Related:
Some Dems Want Brake in Obama Plans, Spending
.
Obama: Look the other way but spend more faster

http://michellemalkin.com/2009/03/18/he
y-how-about-spending-another-15-trillion/

Obama’s War On Banks: Backlash Stirring

March 16, 2009

Some banks are in trouble because of foolish investments and bad loans.  But now all banks are getting the jitters of a hostile takeover of sorts from the likes of Barack Obama, Barney Frank and the rest of the Federal Government….

Related:
In Conservative Alaska, Banks Aren’t Full of “Toxic Assets” 

 Wells Fargo & Co. Chairman Richard Kovacevich criticized the U.S. for retroactively adding curbs to the Troubled Asset Relief Program, which he said forced the bank to cut its dividend, and called the administration’s plan for stress-testing banks “asinine.”

When the U.S. Treasury persuaded the nation’s nine biggest banks to accept capital investments in October, it signaled the whole industry was weak, Kovacevich, 65, said in a March 13 speech at Stanford University in California. Even though Wells Fargo didn’t want the money, it must comply with the same rules that the government placed on banks that did need it, he said.

“Is this America — when you do what your government asks you to do and then retroactively you also have additional conditions?” Kovacevich said. “If we were not forced to take the TARP money, we would have been able to raise private capital at that time” and not needed to cut the dividend to preserve cash, he said.

Kovacevich joins a growing list of bankers who are chafing at restrictions imposed by the TARP program, which affect lending, foreclosures, pay and perks. Lenders including Bank of America Corp., U.S. Bancorp and Goldman Sachs Group Inc. have said they want to give back the money. More than 500 banks, insurers and credit-card companies applied for TARP capital, and the government has distributed almost $300 billion.

From Bloomberg:
Read the rest:
http://www.bloomberg.com/apps/news
?pid=20601087&sid=aWWd8s37rrE0
&refer=worldwide

http://michellemalkin.com/2009/03/
16/no-duh-white-house-worried-abo
ut-bailout-backlash/

Buffett: Obama not at war; has toxic message machine on economy

March 10, 2009

 I was going to mention to …. that you’ve heard this comment recently from some Democrats recently that a `crisis is a terrible thing to waste.’ …. Now, just rephrase that and since it’s, in my view, it’s an economic war, and–I don’t think anybody on December 7th would have said a `war is a terrible thing to waste, and therefore we’re going to try and ram through a whole bunch of things and–but we expect to–expect the other party to unite behind us on the–on the big problem.’ It’s just a mistake, I think, when you’ve got one overriding objective, to try and muddle it up with a bunch of other things…..if you’re in a war, and we really are on an economic war, there’s a obligation to the majority to behave in ways that don’t go around inflaming the minority. If on December 8th when–maybe it’s December 7th, when Roosevelt convened Congress to have a vote on the war, he didn’t say, `I’m throwing in about 10 of my pet projects,’ and you didn’t have congress people putting on 8,000 earmarks onto the declaration of war in 1941.

See:
http://www.swamppolitics.com/news/politi
cs/blog/2009/03/buffett_hits_obama_co
ngress_on.html

********************

When billionaire investor Warren Buffett says President Barack Obama’s economic message is muddled and undermining public confidence, it’s worth listening.

Halfway through his first 100 days in office, ace communicator Obama has struggled to find the right tone in talking about the economy, twinning bleak warnings with optimism about the future.

By Steve Holland
Reuters

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

On the campaign trail, Obama said a president must be able to do more than one thing at a time, and his White House has been doing that.

He and his aides have interspliced comments about the economy while launching theme-of-the-day initiatives on healthcare, stem cell research and on Tuesday, education.

Last week the White House spent some time accusing conservative radio talk show host Rush Limbaugh of being leader of the Republican Party.

But Obama, together with Treasury Secretary Timothy Geithner, White House economic guru Lawrence Summers and others have so far failed to explain how they plan to rescue American banks, some of which are teetering on the brink of collapse.

There is talk of “stress tests” for troubled banks, or nationalizing them or letting some fail — but no clear plan.

Buffett, an informal Obama adviser considered a financial seer on Wall Street, told CNBC on Monday the message has to be “very, very clear as to what government will be doing.”

“And I think we’ve had, and it’s the nature of the political process somewhat, but we’ve had muddled messages and the American public does not know. They feel they don’t know what’s going on, and their reaction then is to absolutely pull back,” he said.

At the White House, spokesman Robert Gibbs reacted defensively, saying Obama has only been in office seven weeks and it should be no surprise that “all of the problems that took many years to take hold haven’t necessarily been solved.”

Read the rest:
http://www.reuters.com/article/new
sOne/idUSTRE5294HH20090310

In this May 21, 2008 file photo, U.S. billionaire investor Warren ...
In this May 21, 2008 file photo, U.S. billionaire investor Warren Buffett speaks during a news conference in Madrid. Buffett says the economic turmoil that contributed to a 62 percent profit drop last year at the holding company he controls is certain to continue in 2009, but the revered investor remains optimistic.(AP Photo/Paul White, File)

Office of Management and Budget Director Peter Orszag arrives ...
“Beware of geeks bearing models,” said Warren Buffett; which could be worrisome to people.  Office of Management and Budget Director Peter Orszag arrives to deliver testimony before the House Ways and Means Committee on Capitol Hill in Washington, March 4, 2009.REUTERS/Jonathan Ernst (UNITED STATES)

Recession on track to be longest in postwar period

March 8, 2009

Factory jobs disappeared. Inflation soared. Unemployment climbed to alarming levels. The hungry lined up at soup kitchens.

It wasn’t the Great Depression. It was the 1981-82 recession, widely considered America’s worst since the depression.

By DEB RIECHMANN, Associated Press Writer

That painful time during Ronald Reagan’s presidency is a grim marker of how bad things can get. Yet the current recession could slice deeper into the U.S. economy.

If it lasts into April — as it almost surely will — this one will go on record as the longest in the postwar era. The 1981-82 and 1973-75 recessions each lasted 16 months.

Unemployment hasn’t reached 1982 levels and the gross domestic product hasn’t fallen quite as far. But the hurt from this recession is spread more widely and uncertainty about the country’s economic health is worse today than it was in 1982.

Back then, if someone asked if the nation was about to experience something as bad as the Great Depression, the answer was, “Quite clearly, `No,'” said Murray Weidenbaum, chairman of the Council of Economic Advisers in the Reagan White House.

“You don’t have that certainty today,” he said. “It’s not only that the downturn is sharp and widespread, but a lot of people worry that it’s going to be a long-lasting, substantial downturn.”

For months, headlines have compared this recession with the one that began in July 1981 and ended in November 1982.

-In January, reports showed 207,000 manufacturing jobs vanished in the largest one-month drop since October 1982.

Read the rest:
http://news.yahoo.com/s/ap/20090308/
ap_on_bi_ge/the_worst_recession

Obama team weighs government bank to ease crisis

January 18, 2009

The incoming Obama administration is considering setting up a government-run bank to acquire bad assets clogging the financial system, a person familiar with the Obama team’s thinking said on Saturday.

The U.S. Federal Reserve, Treasury and Federal Deposit Insurance Corp have been in talks about ways to ease a banking crisis that is once again deepening — and a government-run “aggregator bank” is among the options.

By Tim Ahmann
Reuters

Outgoing Treasury Secretary Henry Paulson and FDIC Chairman Sheila Bair both said on Friday a government bank was one of a number of ideas U.S. regulators had been discussing.

The source said advisers to President-elect Barack Obama, who takes office on Tuesday, were also considering the idea of an aggregator bank among a range of options that could be pursued.

 
Above: Printing Money?

David Axelrod, a top adviser to Obama, told Reuters the new administration would have something to say about a fresh approach to the financial crisis in “the next few days.”

“I’m not going to get into the structure of how we’re going to approach the revamped financial rescue package,” Axelrod said after speaking to a conference of mayors in Washington.

“What we have to do is approach this with a lot more transparency on the front end.”

Read the rest:
In Britain’s Bank Bailout, Taxpayers Face Years of Debt: How About in the US?

Read the rest:
http://finance.yahoo.com/news/Obama-team-
weighs-government-rb-14091318.html

New China Food Safety Alert: Toxic Seafood Has Melamine

December 24, 2008
Melamine has been added to countless products in China in an effort to boost apparent levels of protein by raising the nitrogen count.  But melamine, when concentratated is toxic and poisonous to humans — especially children.

Melamine killed at least six children in China who drank toxic milk this year and it  sickened thousands.  Melamine has also been found in scores of China’s exports including toothpaste, cough syrup, yogurt, dog and cat food, eggs, ice cream, chicken, chocolate, breads and cakes and other products…..

The biggest dairy company in China, Sanlu,  is now going out of business, its reputation destroyed by the use of melamine….

By John E. Carey
Peace and Freedom
>

http://www.cnn.com/2008/BUSINESS/12/25/sanlu.
bankruptcy/index.html

I saw the improper mixing and use of animal feed in China years ago.  Chinese farmers were just trying to lessen the cost of feeding chickens and cattle.  And agricultural suppliers of all kinds in China work feverishly to sell “cheeper, better” feeds, insecticides and fertilizers.  Usually, melamine was added to animal feed.

Beijing’s government has little or no control over the millions of small manufacturers and farmers in the vast countryside of this rural nation of 1.3 billion people.  Until this last summer’s Olympics, Beijing had never even had food sanitation and safety standards written much less enforced for restaurants — a very basic of health taken for granted in the West.

On October 31, 2008, the BBC reported that the poison melamine was widely used in many food products in China and that “the melamine scandal began early in September.” 

Apparently the BBC took no note of the New York Times report a year ago last April (2007) that melamine was widely used in food products in China — and probably had been for years.  The Times called the use a melamine an “open secret” in China.
.
Here’s the report on melamine in China’s food supply from The New York Times from April 2007:
.
ZHANGQIU, China, April 28, 2007 — As American food safety regulators head to China to investigate how a chemical made from coal found its way into pet food that killed dogs and cats in the United States, workers in this heavily polluted northern city openly admit that the substance is routinely added to animal feed as a fake protein.
.
For years, producers of animal feed all over China have secretly supplemented their feed with the substance, called melamine, a cheap additive that looks like protein in tests, even though it does not provide any nutritional benefits, according to melamine scrap traders and agricultural workers here.

“Many companies buy melamine scrap to make animal feed, such as fish feed,” said Ji Denghui, general manager of the Fujian Sanming Dinghui Chemical Company, which sells melamine. “I don’t know if there’s a regulation on it. Probably not. No law or regulation says ‘don’t do it,’ so everyone’s doing it. The laws in China are like that, aren’t they? If there’s no accident, there won’t be any regulation.”

Melamine is at the center of a recall of 60 million packages of pet food, after the chemical was found in wheat gluten linked this month to the deaths of at least 16 pets in the United States.

No one knows exactly how melamine (which is not believed to be particularly toxic) became so fatal in pet food, but its presence in any form of American food is illegal.

The link to China has set off concerns among critics of the Food and Drug Administration that ingredients in pet food as well as human food, which are increasingly coming from abroad, are not being adequately screened.

Above: Ariana Lindquist for The New York Times

“They have fewer people inspecting product at the ports than ever before,” says Caroline Smith DeWaal, the director of food safety for the Center for Science in the Public Interest in Washington. “Until China gets programs in place to verify the safety of their products, they need to be inspected by U.S. inspectors. This open-door policy on food ingredients is an open invitation for an attack on the food supply, either intentional or unintentional.”

Now, with evidence mounting that the tainted wheat gluten came from China, American regulators have been granted permission to visit the region to conduct inspections of food treatment facilities.

The Food and Drug Administration has already banned imports of wheat gluten from China after it received more than 14,000 reports of pets believed to have been sickened by packaged food. And last week, the agency opened a criminal investigation in the case and searched the offices of at least one pet food supplier.

The Department of Agriculture has also stepped in. On Thursday, the agency ordered more than 6,000 hogs to be quarantined or slaughtered after some of the pet food ingredients laced with melamine were accidentally sent to hog farms in eight states, including California.

Read the rest
http://www.nytimes.com/2007/04/30/business/worldbusines
s/30food.html?ex=1335672000&en=b143bd4a5d0684b6&e
i=5124&partner=permalink&exprod=permalink

***************************

Industry experts and businesspeople in China say that the industrial chemical melamine has been routinely added to fish and animal feed to artificially boost protein readings.

By Don Lee and Tiffany Hsu
The Los Angeles Times
Reporting from Los Angeles and Shanghai — Melamine in Chinese-produced milk powder has sickened hundreds of thousands of children and added to a growing list of made-in-China foods banned across the globe. Now, some scientists and consumer advocates are raising concerns that fish from China may also be contaminated with the industrial chemical.

China is the world’s largest producer of farm-raised seafood, exporting billions of dollars worth of shrimp, catfish, tilapia, salmon and other fish. The U.S. imported about $2 billion of seafood products from China in 2007, almost double the volume of four years earlier, according to the U.S. Department of Agriculture.

But industry experts and businesspeople in China say that melamine has been routinely added to fish and animal feed to artificially boost protein readings. And new research suggests that, unlike in cows and pigs, the edible flesh in fish that have been fed melamine contains residues of the nitrogen-rich substance.

Melamine, commonly used in plastics and dishware, can lead to urinary problems such as kidney stones and even renal failure.

Last year, pet foods made with melamine-laced ingredients from China sickened or killed thousands of dogs and cats in the U.S. This year, infant formula tainted with the chemical has been linked to illness in 294,000 small children and six deaths in China, according to China’s Ministry of Health.

In the U.S., fish from China can be found in the frozen food aisle in supermarkets and is served in posh restaurants.

Read the rest:
http://www.latimes.com/business/la-fi-melamine24-2008dec24,0,5133588.story