View Full Version : Economics At least some people are starting to come around to what needs to be done to fix..

KC native
04-08-2009, 09:18 AM
the banks. Notice the two Republican members don't even acknowledge that the banking system may very well be insolvent (Citi and BofA are). I still don't think straight liquidation will work because there's no one really out there that can pay for the banks. IMO the best option is still the Swiss style of nationalization and then spin out to the market.


Congressional Panel Suggests Firing Managers, Liquidating Banks
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By Robert Schmidt

April 8 (Bloomberg) -- A congressional panel overseeing the U.S. financial rescue suggested that getting rid of top executives and liquidating problem banks may be a better way to solve the economic crisis.

The Congressional Oversight Panel, in a report released yesterday, also said the Treasury may be relying on too rosy an economic scenario to guide its $700 billion bailout, and declared that the success of the program after six months is “mixed.” Three of the group’s members disagreed with at least some of the findings.

“All successful efforts to address bank crises have involved the combination of moving aside failed management and getting control of the process of valuing bank balance sheets,” the panel, headed by Harvard Law School Professor Elizabeth Warren, said in its report.

Treasury Secretary Timothy Geithner has revamped the Troubled Asset Relief Program to focus on injecting capital into banks and removing up to $1 trillion in illiquid securities from their balance sheets via public-private investment partnerships. The government is also working to unfreeze credit markets through a Federal Reserve program that provides loans to investors in some asset-backed securities.

Warren, in an interview on Bloomberg Television, said yesterday that while “things may be getting a little better” under Geithner, the Treasury still needs to be more transparent about how it is spending the taxpayers’ money.

“We still have a long way to go, a very long way,” she said.

Depth of Downturn

In the report, Warren’s panel said “it is possible that Treasury’s approach fails to acknowledge the depth of the current downturn and the degree to which the low valuation of troubled assets accurately reflects their worth.”

The group said it was offering an examination of “potential policy alternatives” for the Treasury and not endorsing any shift at this time.

Still, it said a bank liquidation would be “least likely to sap the patience of taxpayers” and “provides clarity relatively quickly” to the markets.

“Allowing institutions to fail in a structured manner supervised by appropriate regulators offers a clearer exit strategy than allowing those institutions to drift into government control piecemeal,” the report said.

The report also said that past successful financial rescues were accompanied by governments’ “willingness to hold management accountable by replacing -- and, in cases of criminal conduct, prosecuting -- failed managers.”

Separate Findings

Two of the panel members, New York State Superintendent of Banks Richard Neiman and former New Hampshire Senator John Sununu, issued separate findings.

“We are concerned that the prominence of alternate approaches presented in the report, particularly reorganization through nationalization, could incorrectly imply both that the banking system is insolvent and that the new administration does not have a workable plan,” the two wrote.

Sununu and the five-member panel’s other Republican appointee, Representative Jeb Hensarling of Texas, dissented from the entire report.

The oversight panel was set up under the rescue law passed in October. It has three members appointed by Democrats and two by Republicans. The group’s reports are required by the legislation.

To contact the reporter on this story: Robert Schmidt in Washington at rschmidt5@bloomberg.net.

04-08-2009, 09:33 AM
Says a man who claims to work on Wall Street or that industry, who is going to be lining his pockets with the artificial stimulus aka tax payer money.
Vested interests are not credible.



KC native
04-08-2009, 10:22 AM
Says a man who claims to work on Wall Street or that industry, who is going to be lining his pockets with the artificial stimulus aka tax payer money.
Vested interests are not credible.



:shake:You really have no idea how the finance industry works. When it comes to the finance industry and economics just do everyone a favor and shut the f[]ck up. You add nothing. You never answer questions. All you do is pump your gold bug nonsense and act as if you know something.

BTW, I'm still waiting on that proof that shows the gold supply is elastic.