Posts Tagged ‘Timothy Geithner’
Thanks to Wikicommons.
Good news folks! President Barack Obama and Treasury Secretary Timmy Geithner have Got the answer!
So… what is the question you ask?
The question is: How the heck are we going to fix for America’s sputtering economy? (as if US Democrazy did not have enough to write about with Iran’s election and gay rights).
On Wednesday the White House released their proposal (a whopping 88 page document, big problems need big solutions).
Now don’t worry if you have not had time to read it (it’s currently being used to level a desk in the USDemocrazy office) as any reforms that get passed will need congressional approval.
It was for this reason Geithner gave Capital Hill a visit. There, in special hearings he faced down cantankerous congressional questioners armed only with a microphone. He faired reasonably well to the grilling (he didn’t even break his ankle) but there were skeptics of the plan.
One major point of objection to the White House’s plan realted to the Federal Reserve (also called the “Fed” by its fans and “Fed Up” by its detractors).
The new plan would greatly increase the power of the Federal Reserve to regulate business. Democratic Senator Christopher J. Dodd inquired if the increased power for the Federal Reserve was “like a parent giving his son a bigger, faster car right after he crashed the family station wagon”. (nice analogy)
Another critique, voiced here by Will Cohan at the Daily Beast, is that the plan does not provide a long term solution and that
A lasting fix will come only when the top 100 or so highest-paid executives at each of these firms—regardless of whether they remain TARPed or TARP-free—have some serious skin in the game, along the lines of their entire net worth.
So what do they mean by skin in the game?
NPR gives us the skinny on the term. Essentially it is this: During the lead up to the sub-prime mortgage collapse, banks were handing loans out like hot cakes (and not very good hot cakes).
The banks would take those loans, repackage them and sell them to others (as mortgage backed securities). The banks no longer owned own these loans and thus having no vested interest (i.e. skin in the game) as to whether or not the loans defaulted.
And… of course many loans did default leaving us with the current financial mess.
In addition to the hot cakes there was plenty of hot air being pointed at the new plan.
Howard Glaser, at the Huffington Post, believes
the proposed overhaul is, by and large, in the best interests not only of consumers of financial products, but the financial companies themselves, their shareholders, and investors.
and wonders if
the industry know a good deal when it sees one?
So how will this proposal look when it gets out of Congress? Who knows and we’ll have to just wait and see (and knowing how fast Congress is this could be quite a long time).
***
Never mind waiting, I hate waiting (and they say TV shortens ones attention span)! Why don’t our faithful readers post up what they think of this plan and what should be done (please hurry as I’m also waiting for your replies to our other posts).
Thanks to Wikicommons.
***UPDATE: Here are the Official Results***
Treasury Secretary Timothy Geithner has been under a lot of stress lately. (We at USDemocrazy thinks it has something to do with fixing the tanking economy.) Now it seems he has been passing this stress onto others.
The US Treasury has required major banks to undergo “Stress Tests” (like waiting in line at the DMV) to see if they are financially sturdy enough (i.e. have enough money) to stand on their own two feet without government crutches.
The results are in… sort of…
The Feds will not be releasing the official results until later today. Luckily, there have been a number of leaks to the press.
Geithner has announced the results will be “reassuring” … although anythingother than total disaster might seem reassuring in this economic climate.
Bank of America, Citigroup, Wells Fargo, Citigroup, Regional Financial, Sun Trust, KeyCorp, Morgan Stanley, Fifth Third, P.N.C. and GMAC need more money. No surprises here.
Among those banks tough enough to survive are Goldman Sachs, Morgan Stanley, MetLife, JPMorgan Chase, Bank of New York Mellon, and American Express. (You can now open the champagne and charge it to your AmEx card.)
What happens to those stressed out banks? Does the government issue Valium?
Well, it seems the banks get one month to put a plan together for raising cash.
Once the banks get their stress report cards, the pundit class will weigh in with their interpretation of the grades. The NY Times has a great collection of experts giving their two cents worth. Arianna Huffington is as vocal as ever with her opinion,
“The fact that the stress test results to be released on Thursday are unlikely to show the full extent of the sickness of our financial system is one more symptom that Obama’s economic team needs to be put in quarantine…”
We’ll see down the road how accurate these tests were. So what do y’all think? Are you and the banks stressed enough?
Everybody hurts… Especially British teachers.
The bearer of bad news: Geithner gives warning about the economy!
Reform needs Republicans… Will they join in?
More powers, more problems… At least that’s what some regulators think.
Some people just don’t want to give up their jobs. We can hardly believe it!
iTunes takes a hike. And some people are none too pleased!
Sarah Palin makes for a hot ticket! John McCain said so himself.
Don’t worry, Steele’s got a strategy. Something about yelling?
After feverishly analyzing a mountain of brain-numbing economic bad news, the crack “Recession Rangers” here at USDemocrazy have come to a startling conclusion: There is a mountain of brain-numbing economic bad news out there.
Thank goodness for us, there are smart guys like Treasury secretary Tim Geithner out there doing something about that mountain.
Yesterday, he unveiled chapter 2,1654, 765a of the Obama economic rescue plan and it looks… well… kind of good! (So we are told.)
The plan has something to do with buying “toxic assets” using both private and public funds… The brainy folks at the Wall Street Journal explain how to kick these assets here.
So will Treasury Tim’s plan work?
The Daily Beast has put together a neat little page here where some very smart guys debate this point. (One pundit, Paul Krugman should not be allowed in any room that contains both Mr. Geithner and any sharp objects or staplers).
Apparently Geithner has more rescue tricks up his sleeve. He has also asked Congress for new powers. (We immediately thought of laser vision and the ability to apparate…). Rather boringly, he is only asking for new powers to regulate “non-bank financial institutions.” According to this Washington Post article, those new powers are actually quite important. The guys at Politico also weigh in on the same subject here.
So Mr. Geithner attacking the mountain of bad news with gusto. As The Economist points out (here), Mr. Geithner is using his marbles to play for all the marbles!
