Stress tests...oh, that's rich. Kind of like how well VAR worked out, and how well the stress test of Fannie and Freddie went last fall. Can you say, off by an order of magnitude? Morons.
I caught a decent chunk of this morning's hearing. What a depressing show. From Bachus to Waters to Frank... At least the bankers appeared competent in their theivery.
I didn't catch much of the auto exec hearings, but my impression is that, overall, the congresscritters went much easier on this group than they did on the automakers. Would others (who saw both) agree?
Agreed. But Obama is a couple of weeks into the job. I've said before that it will take a man the size of FDR to do this job. By that I mean somebody who outstride his advisors to impose his will, someone who is utterly unintimidated, someone who is fully at ease with great power. Obama may someday be there, but he certainly is not there today. If an advisor of FDR's had pulled a Geithner, he would have been dumped.
Gold is bullshit. Carlos Castaneda was a genius-fraud who pointed out that muscle-men could not dig ditches all-day, because they were frauds. Can you walk five miles without blisters? Can you stand in a soup line for 28 hours? FuGldBugs!
Look at it this way -- If the banks were in good health, the banks and the government would sing about it from the tallest buildings If the banks were in bad health and the government could cure them with free money, the government would sing about it from the tallest buildings If the banks were in bad health and the problems too big for the government to handle, well let's all just stay away from the tallest buildings
The only stress test that will happen is on the plausible limits of forecasting and creative accounting.
That means properly accounting for every single one of Citi's Level 3 assets - $135 Billion in 30 days.. 3,125,000 in assets accounted for every minute..
CR: It is very important that the bank stress tests be completed quickly (within 30 days), and the results made public. This will help remove some of the uncertainty, and might make it clear whether or not the U.S. needs to preprivatize (a kinder term for nationalize) the banks.
CR,
I put to you formally why these numbers would be believable unless they said everyone was insolvent.
Given that they have been so resistant to sunshine, and given the difficulty highlighted during the Japanese go-round with this in getting the assets all pinned in one place for account, how will these numbers be reliable.
I'm not attacking you, I just want to say that I have an increasing belief that these guys are unable to play the game straight. How do you propose to remedy this breach of trust in the financial authorities?
Gubbmint Cheese, GS was at $70bn level 3 assets and growing. They don't do writedowns, they just move it to level 3 and write it up to produce earnings
The reason they don't simply let Sheila Bair declare them insolvent is the very large and international deposits. $250,000 doesnt go very far for most account holders at Citi. The ramifications would be horrific, It would be Lehman all over again.
CR: "It is very important that the bank stress tests be completed quickly (within 30 days)"
CR, don't both the banks and the Federal regulators already do "stress tests", with varying scenarios? How will the results be any different than the tests they've already run (and continue to run)?
In other words, don't you think that they already know the answer?
--
Almost ALL govt interventions fail; some failures take a long time to come to fore.
Americans were screwed royally and can't be unscrewed. Like rape, it is a one-way process. A good govt could have easily prevented the current financial crisis. How is a bad govt to fix it?
Of course gold is a fraud. But you can't package and transport the hoarded dead works of decades in anything else anymore. The USD isn't a fraud? Fractional Banking? Lying liars of liarville defrauding fraudsters. Gold is just the LEAST fraudulent.
Wheat and tares, my friend, Winter wheat is the perennial. It will somehow make it through to harvest after this Kondratieff season. But the tares are annuals. Ripe for being cut down.
<i>In a campaign to begin Wednesday, Cessna Aircraft Co. will run an ad that says, "Pity the poor executive who blinks," and gets rid of the company jet. "One thing is certain: true visionaries will continue to fly."</i>
Wolf doesn't distinguish adequately between what may be economically necessary and what is politically possible at this point of time. This is more than a leadership issue.
Obama must have greater than 60% of the people in favor of more vigorous action to move ahead beyond what the stimulus and TARP2 provide. The people aren't there yet.
If you read his lips, Obama is spelled pragmatism and realism, and sometimes realism has to prevail until pragmatism can kick in with public support.
There will be additional rounds, some already hinted at (Geither plan, when detailed; Health care restructuring, Energy/Infrastructure/Global Climate; etc.).
For two weeks in office, the O team is doing pretty well.
“The history of bubbles clearly shows that the significant consolidation of the financial sector is inevitable,” the strategist wrote. “The latest Treasury program is simply another attempt to stymie the consolidation process.”
In a sense, it doesn't matter whether it's a panic, insolvency, or both. Demand is gone. Cash is being hoarded, layoffs continue. Businesses without a deep cash cushion are going to die. Wouldn't we get more economic juice by extending unemployment bennies, rather than propping up the markets?
One thing is certain: true visionaries will continue to fly."
EvilHenryPaulson
.
Yep. Attach wings, run toward cliff, take flying leap. That's falling with style.
It is very important that the bank stress tests be completed quickly (within 30 days), and the results made public.
It's also critical that we have economic stress tests every 5 or 6 years to uncover weaknesses in financial and economic structures as well as giving people the real world experiences in coping with them.
Of course our entire political system is built around avoiding these stress tests (also know as recessions), hence the sad brittle state of the economy we have today.
Unless the failing the "stress test" is cause for seizing a bank (which I don't it legally is at this point), the purpose of the stress test is to stop Joe6Pack's run on the money center banks by reassuring depositors that their money is safe.
Obama must have greater than 60% of the people in favor of more vigorous action JimPortlandOR | 02.11.09 - 4:29 pm | #
Actually, Jim, he must have greater than 60% of the U.S. Senate in favor of more vigorous action because the most radical of them have basically said they will filibuster anything they don't like.
So far it looks like they don't like anything but tax cuts.
It won't be long before Obama will have a choice to make: (1) address the American people and call them the traitors and enemies that they are; or (2) allow them to make Rush Limbaugh's wet dream come true.
I don't understand this either - Japan and the Great Depression hold pretty clear lessons - fiscal policy can only act as a buffer, to fix the problem you have to fix an insolvent financial system. Obama seems enthralled to the Keynsian fiscal policy crowd at the moment. I don't think it would have been possible for Japan to spend more money on infrastructure in the 90's - how'd that work out for them? Nationalize C, and have the Fed start buying toxic assets. The rest is a waste of time and money.
Wolf doesn't distinguish adequately between what may be economically necessary and what is politically possible at this point of time. JimPortlandOR | 02.11.09 - 4:29 pm | #
Sorry I forgot to mention that I completely agree with this statement of yours. It's what led to my last comment.
Pinch me, I'm dreaming if they actually cut this turkey from stimpack2...
Congress Scales Back Business Tax Break in Stimulus Legislation
By Ryan J. Donmoyer
Feb. 11 (Bloomberg) -- House and Senate negotiators scaled back the biggest tax cut for businesses in a $789 billion fiscal stimulus bill, a provision that would let companies convert losses into tax refunds, people familiar with the deliberations said.
A lawmaker and two congressional aides who declined to be identified said the provision, which would have let companies claim an estimated $67.5 billion in tax refunds this year and next, will either be dropped from the bill or restricted so that it benefits primarily small companies. Congress Cuts Big Business Tax Break in Stimulus Bill (Update2) - Bloomberg.com
The correct advice remains the one the US gave the Japanese and others during the 1990s: admit reality, restructure banks and, above all, slay zombie institutions at once. ...
I would also add that in my view it is critical to place as much of the burden for the losses on the stockholders, bondholders and lenders, as opposed to blasting everybody's wealth away with inflation.
Inflation allows the criminals to get away with the crime and punishes the innocent excessively. The point of explicit default is to link the losses with the behavior that caused them. Inflation undermines this link and creates a sense of injustice and lack of credibility.
Elvis(Excellent) writes: Are italics Italian? Just wondering. Ciao.
Yes, they are the survivors of the First Mescalito Empire. They can be recognized by their vespa scooters, their fixed gaze and their general rightward slant. The Italics are not believed to be able to form a government, which was until recently considered a negative.
Thanks for the kind thoughts. I considered being a bando but it's hard to do with a 82 yr old mother.
I have a copy of ADA statues but good luck getting anyone to comply with them. I often get the talk to my attorney response. The local agencies aren't much help, they are swamped with people in incredible dire cirmunstances.
I have friends helping us to find anything but this is in the central valley where the bust is especially bad.
It's also critical that we have economic stress tests every 5 or 6 years to uncover weaknesses in financial and economic structures as well as giving people the real world experiences in coping with them. ac | 02.11.09 - 4:32 pm | #
Didn't we once call these recessions? Downturns that caused inefficient companies to go out of business, "release" the resources that they were tying up, and thus allow growth in the more efficient business out there. Of course, if these resources get tied up working for Uncle Sam, then growth does not recover so quickly.
citizen energyecon writes:
Pinch me, I'm dreaming if they actually cut this turkey from stimpack2...
Congress Scales Back Business Tax Break in Stimulus Legislation
By Ryan J. Donmoyer
Feb. 11 (Bloomberg) -- House and Senate negotiators scaled back the biggest tax cut for businesses in a $789 billion fiscal stimulus bill, a provision that would let companies convert losses into tax refunds, people familiar with the deliberations said.
A lawmaker and two congressional aides who declined to be identified said the provision, which would have let companies claim an estimated $67.5 billion in tax refunds this year and next, will either be dropped from the bill or restricted so that it benefits primarily small companies. Bloomberg.com refer=home
If this is true, better count on unemployment going higher.
Sportsfan writes:
he must have greater than 60% of the U.S. Senate in favor of more vigorous action because the most radical of them have basically said they will filibuster anything they don't like.
--
Being able to beat a Repub filibuster in the Senate is a precondition for nationalization, but getting the Democrats behind nationalization will take some work, too. And behind that the country in general would need to get behind it, at least 60% if not more.
Yes, but the west is special. We may preach to "others", but we do what we want. We are sure this will end well, as we are the "blessed" people.
//The correct advice remains the one the US gave the Japanese and others during the 1990s: admit reality, restructure banks and, above all, slay zombie institutions at once. //
Actually, when it comes to taking over insolvent banks, and printing money, the Feds can do whatever they want. It may end up being a last resort, but I view a few major bank nationalizations and a further expansion of the Fed's balance sheet with toxic debt as pretty much inevitable at this point.
Lots of our banks ARE insolvent. But we have over 8000 banks. Not only is nationalizing all the bad ones at once VERY difficult, it is also VERY negative and scary to the public. The Treasury plan must do this without panic and be expedient without being immediate.
You are dreaming. Obama does not even want to nationalize.....he is too much of a banker owned tool.
Did you not see his interview yesterday? He said that it would be far too complex to nationalize in this country so he is opting for the Japan scenario.
Being able to beat a Repub filibuster in the Senate is a precondition for nationalization, joe shmoe | 02.11.09 - 4:42 pm | #
How about a stealth nationalization of a couple of them by acquiring 51% voting rights?
At this point, though, I'd settle for enough voting stock to get back the $78 billion that Paulson handed out for free. Then I'd wait to see who asked for more money.
Just out, GOP will not fillibuster vote on stimulus...
I thought the GOP lost but they seem to be in charge. Bipartisanship is starting to look like intimidation on Obama's part and that needs to stop right now. I thought Enamuel was supposed to be an attack dog.
Just out, GOP will not fillibuster vote on stimulus... Comrade Kristina | Homepage | 02.11.09 - 4:28 pm | #
I don't think the GOP would do anything to actually stop the stimpack. I think their plan is to give the minimum appearance of support but still get it through. Strategically this makes the most sense: If they blocked it they'd get blamed for everything bad that happened in the next few years. By appearing not to support it they can say that the stimulus bill caused everything bad that's going to happen in the next few years knowing full well that even those strongly supporting the stimulus are saying that it's not going to stop bad things from happening, only minimize them (at best).
This going to end well.. right? Don't these f**kers understand that gaming the system can only work for a short time (maybe 2-4 decades) before reality bites back!
The most dangerous and self-destructive sentences begin with..
"We are special"
"we can get away with this"
"we are absolutely confident that"
"We know for sure"
Lawmakers Reach Framework on Budget Deal (Update1)
By Michael B. Marois and William Selway
. 11 (Bloomberg) -- California Governor Arnold Schwarzenegger and legislative leaders are nearing an agreement to close a record budget deficit with tax and fee increases on items including gasoline and retail sales.
Lawmakers have a common framework in place, Senate President Pro Tem Darrell Steinberg, a Democrat from Sacramento, told reporters today.
Japan was a net-lender not net-borrower during the famous zombie 90s.
Not so much for us.
It's rather alarming in fact that the Japanese scenario for US has any credibility. It's what we call false choice fallacy.
There is in fact a third option. You let the bad banks go BK, then they enter receivorship. If enough of this happens you have a bank holiday justified by the public given the "crisis". You don't have to spend or lose political capital.
By appearing not to support it they can say that the stimulus bill caused everything bad that's going to happen in the next few years knowing full well that even those strongly supporting the stimulus are saying that it's not going to stop bad things from happening, only minimize them (at best). ac | 02.11.09 - 4:50 pm | #
I don't think the stimpack will do the trick.
ac
I doubt anyone here believes it will do any tricks. Or if they did, they wouldn't mention it-- instant dogpile.
Gold is not a fraud. Imagine that you are going to be dropped out of an airplane by parachute in the middle of an unknown foreign country.
Aside from clothes, a little food and a little water, you can have one other thing to take with you, to help you survive among the native population, which is restless and hungry. But it can only weigh 10 ounces.
"In my view, what we now have will be a fundamental economic reset," he said. "The economy is going to have to re-establish itself at a level of spending that reflects the real value of underlying assets before we can all start growing again at a healthy rate."
xxxxx writes:
...Didn't we once call these recessions? Downturns that caused inefficient companies to go out of business, "release" the resources that they were tying up, and thus allow growth in the more efficient business out there.
Exactly, the neccessary cleansing effect of recessions. And the more one tries to avoid them, the more is the pain once you finaly can not evade them anymore.
Didn't we once call these recessions? Downturns that caused inefficient companies to go out of business, "release" the resources that they were tying up, and thus allow growth in the more efficient business out there. Of course, if these resources get tied up working for Uncle Sam, then growth does not recover so quickly.
\t xxxxx | xxxxx | 02.11.09 - 4:42 pm | #
We had to figure out the hard way not to put out every forest fire that came along - they were actually doing a service by purging the rottenness from the forests and making them more stable, less prone to uncontrollable conflagrations.
"Being able to beat a Repub filibuster in the Senate is a precondition for nationalization, .."
Can't senate rules be changed? The republicans talked about the "nuclear option," when they had trouble confirming Bush's judges.
econonoob
There are at least 2 arrows still in the quiver on filibusters, that the Dems could let fly.
1) Recall the so-called nuclear option that the Repubs threatened which would have eliminated the filibuster with a ruling from the presiding officer on the rules (the VP) - which was never enacted.
2) Even easier: the stimulus (or any spending authorization/appropriation bill) can be resubmitted as 'budget reconcilition', which by rule is not subject to filibuster. This is the true nuclear option.
The Dems don't want to use it if they can somehow get 3/5 approval without it. But is the final weapon, and the GOP knows this. When the public supports a measure as necessary, the rules be damned.
The more I watch this politicoeconomic struggle continue, the more amazed I am that the entire stimulus bill is being saved by a couple of women from Maine. They of course would be Senators Collins and Snow.
It got me thinking about the 20th Maine, the regiment that saved the Union's flank at Little Round Top. Had that flank collapsed, the battle of Gettysburg probably would have been over and Lee would have had a straight shot to Washington.
Thanks again to all you folks from up there in the corner.
--
Werner: But they seem to have been financed to a good deal by Wall Street and thus looked the other way. So, now you have the mess.
Here is what I posted A YEAR AGO:
As you well know, I make long-term predictions and then wait for them to materialize. Yes, there will be a commodities bust, a big one, but has it started is hard to say right now. Fed can only help Bankrupters and Fraudsters and can never help the real economy and the general population. What a bunch of morons Americans are to allow such an institution to even exist. There are consequences to breeding dopes that support democracy even when fully controlled by the moneymen. Moneymen got their special protectors in the Fed and they also control the USG. Americans are screwed because their system has turned against them with a vengeance. The question is: Who all will suffer?
Obama certainly did not endorse a Japan-style policy.
He said what Japan did failed and that what Sweden did worked . . . then he made the argument about differences of scale and traditions.
What Obama did in that interview was a step forward in changing American traditions.
The US President went on TV and discussed a historical case parellel to our own in which nationalization worked and was the right thing to do. He did not denounce it as socialism. He indicated that it is indeed an option that has been under consideration.
That leaves the argument about scale. It is, frankly, a weak argument that doesn't even need to be knocked over. You can go around it by nationalizing only some banks, namely the big ones.
Obama set up the issue as an exercise in pragmatism - whatever works, as he repeatedly says.
So, on one side he is chipping away at the historically monumental ideological opposition to nationalization in the US.
And on the other side he is buying two things by sending Geithner to be ping ponged about by the Congress and media: 1) he buys time so that more stories come out about the banks and more rage aginst them builds, and 2) the try-it-all except nationalization/bankruptcy style of the Geithner outline puts all of those alternatives up in the air to be shot down or fail.
Eliminate the impossible and all that is left is the possible.
And, meanwhile, a big bust at Citi or BAC would also help move the public and Congress along.....
Martin Wolf is right. The Geithner plan can't work. I don't think it was made to work, just like George W Bush never wanted the UN inspectors to actually determine whether Saddam had wmd.
Obama is putting a process in motion. We will be overtaken by the events that he has set up, more or less in just the way I think he wants us to be overtaken.
We won't know if I'm right for a while, I'm afraid. Wish it could be otherwise.....
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SEC May Pick Audit Boards Charles Niemeier for Accounting Post
By Jesse Westbrook and Ian Katz
Feb. 11 (Bloomberg) -- U.S. Securities and Exchange Commission Chairman Mary Schapiro may choose Charles Niemeier, a supporter of mark-to-market rules that some banks say worsened the financial crisis, as the agencys chief accountant, said three people familiar with the matter.
Niemeier, 52, was among the original members of the Public Company Accounting Oversight Board when it was formed in 2002. He has backed mark-to-market, also known as fair-value, which requires companies to book profits or losses when asset values rise or fall.
I find it remarkable that so much blame is being placed on fair-value, Niemeier said in a Dec. 1 interview with CPA Journal. Blaming fair-value for our current problems is like blaming your doctor when he tells you that you are sick. SEC May Pick Audit Board’s Niemeier for Accounting (Update2) - Bloomberg.com
I view the events of this week, and the last three, as a setup to take over the largest of the insolvent banks. The administration can't just step in on C without causing a run on all banks.
O has his press conference then Geithner lays out the "frame work" for the banking crisis approach, which is intentionally without detail. Geithner did present the stress test idea, which is what I was looking for in his presentation, as a way to obtain discovery, and present to the economic world, the banks that immediatey need to be taken down.
It will all happen in due time, and in an orderly fashion, so as not to cause a panic:
-Tell the public how bad it really is
-Lay out a plan for the financial world to digest
-Evaluate all the banks
-Display shock at how bad a situation C is in
-Preprivatise C while assuring the public that everything is under control and the FDIC will insure all deposits.
-LRR (lather rinse repeat)
This will crash the financial equities, but in a somewhat more controlled fashion.
Well Werner, I don't think Germans are dopes but their government somehow let Hypo, Commerz, and Deutsche all get way out of control. So tell me again, how could that have happened
"And an inflatable doll for those lonely nights around the campfire"
We rolled up to the lean-to after the "shopping" excursion. Quiet night around the old mall, after the revenuers rolled through couple of nights ago. We used to go there in the good times, back when the place was warm due to central heating and not trash can fires.
Still, you gotta press on. Which reminded me, I managed to find some of those adhesive pads I was looking for. Ol Wanda's been a bit worse for wear of late, and hasn't been able to hold up long enough to make the puffing worth it...
I hope you are right....I just don't buy it....maybe I am too cynical but I just don't see it as there being some master plan to slowly build support for nationalization.
I don't think they are that organized I think they are just flailing about at this point.
And so far the only thing we have heard out of this administration regarding the banks is that they want to keep them private, keep the managements in place, and not punish shareholders or bondholders.
If it looks like a tool, walks like a tool, and talks like a tool.....
Turbo writes:
Actually, when it comes to taking over insolvent banks, and printing money, the Feds can do whatever they want. It may end up being a last resort, but I view a few major bank nationalizations and a further expansion of the Fed's balance sheet with toxic debt as pretty much inevitable at this point.
Turbo | 02.11.09 - 4:44 pm | #
Maybe. OTOH, these banks are active buinesses. BAC paid out just under 10 billion in dividends last year. That's some massive cash flow.
There's a good chance if they can just kick the can down the road far enough, these banks will generate cash to pay the goverment back and cover their losses.
Ken Lewis estimated this would take 3 years for BAC. I'm guessing 5-6 years as cash flow decreases and losses increase.
Of course, these are years where the banks are not lending, and instead are just covering previous losses. The ecconomy will stagnate.
This is the Japanese model... and the one we seem to be following.
What if, because of the interdependent web of bad transactions, the vast majority of (investment) banks are zombies?
I don't think the administration is resisting nationalization because of some loyalty to free markets. I think they are motivated by trying to avoid a panic, a run, and a full collapse.
But saying this would create the very panic they want to avoid, so its all about doing everything conceivable except acknowledging the elephant in the room.
It got me thinking about the 20th Maine, the regiment that saved the Union's flank at Little Round Top. Had that flank collapsed, the battle of Gettysburg probably would have been over and Lee would have had a straight shot to Washington.
Sounds good to me - Lee in the White House. (Just Kidding. I got over the War of Northern Aggression at least five years ago. What matters now is the Duke/Carolina game tonight. Blue on Blue).
"Obama must have greater than 60% of the people in favor of more vigorous action to move ahead beyond what the stimulus and TARP2 provide. The people aren't there yet."
JimPortlandOR,
Quite true. But it is Obama's job to carry them to that point - if he is to be any more than a placeholder President. He seems to be waiting for events to force what he suspects must eventually be done. He needs, rather, to set and drive an agenda. Better to fail spectacularly than dismally.
10 oz, one item, with restless natives? It would have to be a k-bar knife, soon as you flash bling you are going to be left to cool to ambient in some latrine; with a good k-bar you have lots of options.
Most middle class have been in a personel recession all their adult life, but with a job, now it's a depression, no jobs...
Everything needs to reset, the longer it's put off, the greater and deeper the pain.
Bush was occupied else where with no time for his Country, Obama does not have a blue clue and is depending on those that put him in his position to find a position not to be in. These were people who marketed politicions and have no idea how deep the dodo is.
Jas Jain writes:
....Moneymen got their special protectors in ... and they also control the USG. Americans are screwed because their system has turned against them with a vengeance. The question is: Who all will suffer?...
Right, and one of the early things Obama did (in his campaign) was to decline "public campaign finance" .
We are told however that he got his money from a myriad of small scale (internet) contributions.
But who knows ?
And now he takes their (and their childerns) tax dollars to "bail out" the big banks/money institutions.
Some change indeed!
(or just the continuation of the "old style" politics ?)
I don't think Obama is focused on nationalization.
I think he is focused on three related things: maximizing options for what can be done, building his administration's power to accomplish big projects, and emphasizing pragmatism in a crisis.
Nationalization isn't his goal, but under the circumstances - those that are given in the crisis and those that Obama is setting - some variation on pre-privatization is the only logical outcome. The terrain is being shaped to take us there.
I'm not saying that Obama is secretly Mr Spock. But he surely knows enough of what's going on.
As for his actions so far, pushing forward pay caps is new and was previously unthinkable (and is still opposed by the Repubs). If all he wants to do is to save the bankers, then adding fuel to the fire of public anger by lambasting the bankers for their bonuses was not the cleverest step.
And I am unpersuaded by the arguments that focus on Geithner and Summers. Folks spent too long under the Bush Admn, run by Cheney, and paid too much attention to Bush's nonsense about how he listened to his generals (except for those whom he fired when he didn't like what they told him - see Gen Shinseki, among others).
Obama chose Geithner and Summers partly for advice, yes, but mainly for their technical skills. Obama points, they shoot. I have no doubts about who is calling the shots here.
Now, what will Obama do? We'll have to outlast the Conjure clock to find out.
How about we stress test municipalities, states, pension funds, insurance companies, and the federal government, too? Insolvency is insolvency after all.
You are dreaming. Obama does not even want to nationalize.....he is too much of a banker owned tool.
Did you not see his interview yesterday? He said that it would be far too complex to nationalize in this country so he is opting for the Japan scenario.
Mr. T. | 02.11.09 - 4:45 pm | #
Agreed that he does not want to nationalise. But he's not a banker owned tool either IMHO. I think he's just too timid and in awe of wall street at this point. Hopefully that will change soon. Otherwise it's the Japan scenario as you said...
EvilHenryPaulson writes:
...Well Werner, I don't think Germans are dopes but their government somehow let Hypo, Commerz, and Deutsche all get way out of control. So tell me again, how could that have happened...
I concede you Hypo; Commerz I am not sure, could be due to the aquisition of Dresdner. But Deutsche ? Hell, these 4Q 5 billion is just what a scrappy american car manufacturer can dish up. It's visible, but nowhere near the apocalyptic predictions made. I suspect my "collateral damage" scenario still applies, and they (Deutsche) seem to hold up pretty well.
It's Wednesday nite, and it's time for the Big O's designated weekly cocktail party at the White House. So far, this guy has shown us he likes to socialize and spend money. With a comfortable lead before the election, he hid out in the weeds when the initial bailout was being worked out last fall to avoid showing his cards. He trotted out Volcker to demonstrate integrity and has now dumped him in favor of the infamous Summers, one of the perpetrators of this Ponzi scheme. There is a giant hole in the structure of this economy and none of these people are attempting to fix it, but would rather spend money and enrich themselves while creating a perpetual waterfall of defaults and debt. The money supply is not really going up unless they continue to mark to fantasy all the rapidly increasing bad loans.
If the "stress tests" fail to give the desired result (A-OK), they will be asked to re-run the tests until they get the desired result .
And why is this even included in the legislation. Last I checked, banks were a regulated industry and bank examiners were supposed to be looking at this data on a regular basis.
stress test doesn't mean crap, it is so easy to fudge. what matters are what inputs they test, the variance of those inputs under normal conditions, and then what variance the stress test uses. E.g., if the normal level is 90% loan recovery and it historically varies 2-3% under normal conditions and I "stress" test by using a 4-6% variance then that may not be much of a "stress test " on the model (especially if there is potential for variances of 10%+. I want to see what inputs are being tested, their prior levels 1980-2005, their current levels, what variance is/was under prior/normal conditions and what the stress tested variance is.
If i see all that, then i could begin to draw valuable conclusions from the results. I'm not holding my breath.
"I'm not saying that Obama is secretly Mr Spock. But he surely knows enough of what's going on."
That's my impression too. He must move carefully and hasten deliberately. No one in this country, not even its chief executive, is powerful enough to simply shove the established configuration in the ribs and tell it to move aside, nor would it be prudent to do so. What in the world would take its place? You may not like your bone structure, but what's going to take the place of your skeleton?
How many years did American economists and policy wonks tell Japan that a sharp knife cuts the quickest and hurts the least.
But when its ourselves, no, no, lets just sloooowly ease ourselves out of this situation. It will make it last longer and be worse in the long run.
Uffish Thought: I agree with you. Obama has always taken the long view approach, and he certainly does not operate in a bubble. He hears everything and acts in due time, he does not react.
Unfortunately, it's as if FDR took office in January of 1930. People still haven't seen the full depth of the damage. And politicians still think there's something to gain by making nice with the Republicans and the plutocrats.
My take is that Obama is a smart, decent President. But in the face of the current crisis i feel that he's overmatched. Not quite FDR. But i could be wrong. We'll find out soon enough.
______________________________________How about we stress test municipalities, states, pension funds, insurance companies, and the federal government, too? Insolvency is insolvency after all.
Charles Kiting | 02.11.09 - 5:23 pm | #
obama is very intelligent but intelligence doesn't always translate to wise decisions. his intelligence will likely be channelled into politcal survival first and foremost. he has demagogued, over promised, lied, exaggerated, overisimplified, villified, and used all the dirty tricks that all politicians do to get elected. he's no different, just more dynamic, likeable, and persuasive than the others.
And politicians still think there's something to gain by making nice with the Republicans and the plutocrats.
--
My current fantasy/hope is that the plutocrats participating in the real economy will lose patience with the kleptocratic bankers and start to exert pressure for nationalization. Because otherwise it is going to take J6P riots to do the job.
"Stress Test" usually applied to engineering principles related to bridges and rocket design. It's now the phase of the moment as applied to the current state of banking conditions. Here's a clue, it's FUGLY!
With the Geithner plan (or unplan?), the new administration blew their first chance at bringing the house of banks in order. Mandatory stress test could give the adminstration cover to change course and nationalize the insolvent banks anyhow.
That´s after listening to the Obama reply on why we don´t nationalize. Let´s see if it makes sense.
Obama says that America doesn´t nationalize; it is not something we do. That´s actually false; ask IndyMac or WaMu shareholders on what hit them. The FDIC does nationalize.
The political system, however, does not perceive it as the "N" word. There was little backslash against those actions, as the FDIC is seen as non-political; some sort of a technocratic guardian that does what is needed.
Enter the stress test: Geithner talks about testing the banks to see if they can swin in this troubled waters. Only some banks; the 14 with assets over 100 billion, will take this wonderful "test". Depending on how well they fare, they will get more or less capital, and the treasury will grab more or less stock.
See where am I going? The administration could be looking for a way to benchmark and nationalize what is needed using a technocratic procedure with a clear way out, as a way of doing the work with some political cover. Essentially, the idea is to get the "N" word out of the debate, and make it about banks getting "intervined" after failing to comply with the "agency"´s regulations.
It is convoluted, and I might be looking for a rationale that is not actually there, but it makes sense; it gives them a way to do what is needed without actually having to name it. Nationalization might be econonomically necessary, but is not politically feasible; this could be a way to create political cover for it.
rich I've spoken with a few old guys who flew for Air America over here in SE Asia, most if not all wore gold bracelets just in case they were shot down inside of Laos, Vietnam, Cambodia...
so there's something to what you say... although, I'm sure they also carried their firearm
comparing Obama unfavorably to FDR sounds like revisionist history to me. Didn't FDR take a long time to sell WWII to the american people before committing us to the european theatre? Didn't he advance communication initiatives before disclosing his full tactical plans? Didn't he try many more things than those that actually worked and that we actually remeber him by?
Let's keep our heads people, and recognize that this president brings far more juice to the squeeze than we could have ever hoped for during an epic crisis. Obvious intellectual and political chops from where I sit.
Can the fed really "Stress test" banks in 30 days?
Seems to be working just fine according to the banksters and their political handmadens
I have never seen a more expensive Dog and Pony show.
Can the fed really "Stress test" banks in 30 days?
REBear | 02.11.09 - 4:12 pm | #
Sure.... just get a big rubber stamp with "FAIL" on it, and go to work.
CR,
Sometimes there are answers to questions you don't want to know
I have never seen a more expensive Dog and Pony show.
It gets better when they feed the bear later.
It isn't about whether it will work, but who loses the money.
The only thing worse than zombie banks is vampire bankers.
"Preprivatize?" Exactly who are we afraid of offending?
Dunno about anyone else, but I can take it.
It gets better when they feed the bear later.
Anonymous | 02.11.09 - 4:14 pm | #
I was kinda hoping for the pony show with the CNBC hostesses.
It is very important that the bank stress tests be completed quickly (within 30 days), and the results made public.
I don't see how this works. If they publicly state that a bank is shaky or likely to fail, then they'll guarantee the banks failure.
Catch 22.
New TARP, same as the old TARP!
Thread music:
YouTube - Wont Get Fooled Again
Nostrovia,
Eric writres
"Sure.... just get a big rubber stamp with "FAIL" on it, and go to work."
I think the rubber stamp has already been set to say 'PASS'.
Dimon says it's all going to work out okay
Stress tests...oh, that's rich. Kind of like how well VAR worked out, and how well the stress test of Fannie and Freddie went last fall. Can you say, off by an order of magnitude? Morons.
I caught a decent chunk of this morning's hearing. What a depressing show. From Bachus to Waters to Frank... At least the bankers appeared competent in their theivery.
I didn't catch much of the auto exec hearings, but my impression is that, overall, the congresscritters went much easier on this group than they did on the automakers. Would others (who saw both) agree?
"It is very important that the bank stress tests be completed quickly"
Just push 'em over a cliff, and see who's still twitching.
Then shoot the twitchy.
Simple really.
Nostrovia,
"This timidity is depressing."
Agreed. But Obama is a couple of weeks into the job. I've said before that it will take a man the size of FDR to do this job. By that I mean somebody who outstride his advisors to impose his will, someone who is utterly unintimidated, someone who is fully at ease with great power. Obama may someday be there, but he certainly is not there today. If an advisor of FDR's had pulled a Geithner, he would have been dumped.
Gold is bullshit. Carlos Castaneda was a genius-fraud who pointed out that muscle-men could not dig ditches all-day, because they were frauds. Can you walk five miles without blisters? Can you stand in a soup line for 28 hours? FuGldBugs!
Look at it this way --
If the banks were in good health, the banks and the government would sing about it from the tallest buildings
If the banks were in bad health and the government could cure them with free money, the government would sing about it from the tallest buildings
If the banks were in bad health and the problems too big for the government to handle, well let's all just stay away from the tallest buildings
The only stress test that will happen is on the plausible limits of forecasting and creative accounting.
"FuGldBugs!"
don't hate me because i'm beautiful
That means properly accounting for every single one of Citi's Level 3 assets - $135 Billion in 30 days.. 3,125,000 in assets accounted for every minute..
"It is very important that the bank stress tests be completed quickly"
Just push 'em over a cliff, and see who's still twitching.
Then shoot the twitchy.
Simple really.
Just shoot em and charge their family for the bullets, i hear that's coming into fashion again in certain parts..
I believe such transparency would yield the result that 3/4 of all banks are insolvent.
Nobody wants to admit that.
Fine.
Look out for zombies craving brains.
--bh
Jeopardy Host Geithner:The Answer is PASS
Born and Bred Dope: What is the result of the bank stress test.
Jeopardy Host: Correct!
I don't care who owns my bank as long as I can get my money out.
To add to EvilHenryPaulson's observation: this is what we are seeing with FASB revisiting that whole problematic accounting notion of mark-to-market.
Now mark-to-pony is much better!
--bh
CR:
It is very important that the bank stress tests be completed quickly (within 30 days), and the results made public. This will help remove some of the uncertainty, and might make it clear whether or not the U.S. needs to preprivatize (a kinder term for nationalize) the banks.
CR,
I put to you formally why these numbers would be believable unless they said everyone was insolvent.
Given that they have been so resistant to sunshine, and given the difficulty highlighted during the Japanese go-round with this in getting the assets all pinned in one place for account, how will these numbers be reliable.
I'm not attacking you, I just want to say that I have an increasing belief that these guys are unable to play the game straight. How do you propose to remedy this breach of trust in the financial authorities?
Gubbmint Cheese,
GS was at $70bn level 3 assets and growing. They don't do writedowns, they just move it to level 3 and write it up to produce earnings
The reason they don't simply let Sheila Bair declare them insolvent is the very large and international deposits. $250,000 doesnt go very far for most account holders at Citi. The ramifications would be horrific, It would be Lehman all over again.
CR: "It is very important that the bank stress tests be completed quickly (within 30 days)"
CR, don't both the banks and the Federal regulators already do "stress tests", with varying scenarios? How will the results be any different than the tests they've already run (and continue to run)?
In other words, don't you think that they already know the answer?
In a zombie bank your money is as safe as brains..............and as reliable as the brains that run them.
Nostrovia,
Ha!...."mark-to-pony" ... I like that.
Sorry, italic error.
Obviously, me responding to CR.
"Sorry, italic error."
Are italics Italian? Just wondering. Ciao.
Tyme to de-nazify the banks and USA financial system.
Jesse's Café Américain
--
Almost ALL govt interventions fail; some failures take a long time to come to fore.
Americans were screwed royally and can't be unscrewed. Like rape, it is a one-way process. A good govt could have easily prevented the current financial crisis. How is a bad govt to fix it?
Jas
Has Barack Obama's presidency already failed?
Great opening line in Martin Wolf's piece. It does get the reader's attention right away.
Now we'll mark-to-pony.
Then we'll mark-to-zombie.
Then we'll mark-to-leper.
....
--bh
RV workers in Elkhart need to find something else to do.
Who wants to live there anyways?
In other words, don't you think that they already know the answer?
| \t02.11.09 - 4:22 pm | #
\t Tim Geithner's Mom | \t \t \tHomepage
Yes, yes, yes.
Just out, GOP will not fillibuster vote on stimulus...
Let's see..... Stress Test
Test Failed........ Patient was dead all along. Now confirmed......
JJ:"Americans were screwed royally"
EDIT. Change to "Americans screwed themselves royally".
Actually, it's really not as much fun as it sounds.
Gavin,
I'm no longer sure econ numbers matter:
Bloomberg.com:
Economic Calendar
....but, among otherthings - retail sales numbers
and for 10,001 time i ve got to do it, silently scream to myself
Zombis & dinosaurs MUST DIE!
i think i wented, thank yo.
Of course gold is a fraud. But you can't package and transport the hoarded dead works of decades in anything else anymore. The USD isn't a fraud? Fractional Banking? Lying liars of liarville defrauding fraudsters. Gold is just the LEAST fraudulent.
Wheat and tares, my friend, Winter wheat is the perennial. It will somehow make it through to harvest after this Kondratieff season. But the tares are annuals. Ripe for being cut down.
<i>In a campaign to begin Wednesday, Cessna Aircraft Co. will run an ad that says, "Pity the poor executive who blinks," and gets rid of the company jet. "One thing is certain: true visionaries will continue to fly."</i>
Wolf doesn't distinguish adequately between what may be economically necessary and what is politically possible at this point of time. This is more than a leadership issue.
Obama must have greater than 60% of the people in favor of more vigorous action to move ahead beyond what the stimulus and TARP2 provide. The people aren't there yet.
If you read his lips, Obama is spelled pragmatism and realism, and sometimes realism has to prevail until pragmatism can kick in with public support.
There will be additional rounds, some already hinted at (Geither plan, when detailed; Health care restructuring, Energy/Infrastructure/Global Climate; etc.).
For two weeks in office, the O team is doing pretty well.
Pony eating bear zombies
Bank of America’s Bernstein Says Bank Plan Won’t Work
Bank of America’s Bernstein Says Bank Plan Won’t Work (Update2) - Bloomberg.com
ernstein said the government should increase deposit insurance, seize assets, shut “large” banks and encourage takeovers.
“The history of bubbles clearly shows that the significant consolidation of the financial sector is inevitable,” the strategist wrote. “The latest Treasury program is simply another attempt to stymie the consolidation process.”
In a sense, it doesn't matter whether it's a panic, insolvency, or both. Demand is gone. Cash is being hoarded, layoffs continue. Businesses without a deep cash cushion are going to die. Wouldn't we get more economic juice by extending unemployment bennies, rather than propping up the markets?
Let's see..... Stress Test
1. - hook patient to multiple cords on chart recorder. Check
2. - check vitals (ignoring level 3 assets). Check (none noted)
3. - start treadmill at 2 mph while monitoring vitals. Check
4. - Doctor Ben, get Turbo Defib Timmay! The patient just vaporlocked. Need more dollars.........
Test Failed........ Patient was dead all along. Now confirmed......
Bruce | 02.11.09 - 4:28 pm | #
You forgot step 5: mark bank as "PASSED".
The guys in the Ivy faculty lounges and corporate suites are still laughing at YOU. So buck up.
It isn't about whether it will work, but who loses the money.
Sexy Derivative | 02.11.09 - 4:14 pm | #
Word.
One thing is certain: true visionaries will continue to fly."
EvilHenryPaulson
.
Yep. Attach wings, run toward cliff, take flying leap. That's falling with style.
It is very important that the bank stress tests be completed quickly (within 30 days), and the results made public.
It's also critical that we have economic stress tests every 5 or 6 years to uncover weaknesses in financial and economic structures as well as giving people the real world experiences in coping with them.
Of course our entire political system is built around avoiding these stress tests (also know as recessions), hence the sad brittle state of the economy we have today.
This is ridiculous. Everyone who has half a brain knows all the big banks and a good many of the smaller banks are insolvent.
The only thing propping up equity is the hope that gov't keeps the giveaways coming fast and hard.
scone,
"Wouldn't we get more economic juice by extending unemployment bennies, rather than propping up the markets?"
The bailouts ARE unemployment bennies. It's just that they exceed the normal limits on such compensation.
Can you imagine Jamie walking into a check cashing place with a $10M check? That would cause a line.
Nostrovia,
I am very happy to see Bill use CR to not only report on news with some analysis, but to give some concrete recommendations.
scone(Unrated) writes:
Wouldn't we get more economic juice by extending unemployment bennies, rather than propping up the markets?
You're forgetting the kleptocracy part.
Don't worry.. the stress tests will occur, one way or the other.
"It is very important that the bank stress tests be completed quickly (within 30 days), and the results made public."
Unless the failing the "stress test" is cause for seizing a bank (which I don't it legally is at this point), the purpose of the stress test is to stop Joe6Pack's run on the money center banks by reassuring depositors that their money is safe.
Obama must have greater than 60% of the people in favor of more vigorous action
JimPortlandOR | 02.11.09 - 4:29 pm | #
Actually, Jim, he must have greater than 60% of the U.S. Senate in favor of more vigorous action because the most radical of them have basically said they will filibuster anything they don't like.
So far it looks like they don't like anything but tax cuts.
It won't be long before Obama will have a choice to make: (1) address the American people and call them the traitors and enemies that they are; or (2) allow them to make Rush Limbaugh's wet dream come true.
Mr. T.,
"Everyone who has half a brain..."
Shhhhhhhhhhhhh! Zombies don't care how much is left.
Nostrovia,
I don't understand this either - Japan and the Great Depression hold pretty clear lessons - fiscal policy can only act as a buffer, to fix the problem you have to fix an insolvent financial system. Obama seems enthralled to the Keynsian fiscal policy crowd at the moment. I don't think it would have been possible for Japan to spend more money on infrastructure in the 90's - how'd that work out for them? Nationalize C, and have the Fed start buying toxic assets. The rest is a waste of time and money.
Wolf doesn't distinguish adequately between what may be economically necessary and what is politically possible at this point of time.
JimPortlandOR | 02.11.09 - 4:29 pm | #
Sorry I forgot to mention that I completely agree with this statement of yours. It's what led to my last comment.
I read the bloomberg link, from above. I wonder whether Bernstein really works for BofA.
"Bernstein said the government should increase deposit insurance, seize assets, shut large banks and encourage takeovers."
Bank of America’s Bernstein Says Bank Plan Won’t Work (Update2) - Bloomberg.com
Turbo,
The reason why they don't nationalize C and buy toxic assets is the same reason why they have not given you a $10bn check
There are limits to what they can do
"mark-to-pony"
LOL!
Pinch me, I'm dreaming if they actually cut this turkey from stimpack2...
Congress Scales Back Business Tax Break in Stimulus Legislation
By Ryan J. Donmoyer
Feb. 11 (Bloomberg) -- House and Senate negotiators scaled back the biggest tax cut for businesses in a $789 billion fiscal stimulus bill, a provision that would let companies convert losses into tax refunds, people familiar with the deliberations said.
A lawmaker and two congressional aides who declined to be identified said the provision, which would have let companies claim an estimated $67.5 billion in tax refunds this year and next, will either be dropped from the bill or restricted so that it benefits primarily small companies.
Congress Cuts Big Business Tax Break in Stimulus Bill (Update2) - Bloomberg.com
"I read the bloomberg link, from above. I wonder whether Bernstein really works for BofA."
Probably not for long.
Hmmm, according to this, there are some extended unemployment bennies in the stimpack, which are due to roll out first. Not a lot, but something:
Stimulus: How to Know If It's Working - BusinessWeek
The correct advice remains the one the US gave the Japanese and others during the 1990s: admit reality, restructure banks and, above all, slay zombie institutions at once. ...
I would also add that in my view it is critical to place as much of the burden for the losses on the stockholders, bondholders and lenders, as opposed to blasting everybody's wealth away with inflation.
Inflation allows the criminals to get away with the crime and punishes the innocent excessively. The point of explicit default is to link the losses with the behavior that caused them. Inflation undermines this link and creates a sense of injustice and lack of credibility.
Elvis(Excellent) writes:
Are italics Italian? Just wondering. Ciao.
Yes, they are the survivors of the First Mescalito Empire. They can be recognized by their vespa scooters, their fixed gaze and their general rightward slant. The Italics are not believed to be able to form a government, which was until recently considered a negative.
Thanks for the kind thoughts. I considered being a bando but it's hard to do with a 82 yr old mother.
I have a copy of ADA statues but good luck getting anyone to comply with them. I often get the talk to my attorney response. The local agencies aren't much help, they are swamped with people in incredible dire cirmunstances.
I have friends helping us to find anything but this is in the central valley where the bust is especially bad.
It's also critical that we have economic stress tests every 5 or 6 years to uncover weaknesses in financial and economic structures as well as giving people the real world experiences in coping with them.
ac | 02.11.09 - 4:32 pm | #
Didn't we once call these recessions? Downturns that caused inefficient companies to go out of business, "release" the resources that they were tying up, and thus allow growth in the more efficient business out there. Of course, if these resources get tied up working for Uncle Sam, then growth does not recover so quickly.
citizen energyecon writes:
Pinch me, I'm dreaming if they actually cut this turkey from stimpack2...
Congress Scales Back Business Tax Break in Stimulus Legislation
By Ryan J. Donmoyer
Feb. 11 (Bloomberg) -- House and Senate negotiators scaled back the biggest tax cut for businesses in a $789 billion fiscal stimulus bill, a provision that would let companies convert losses into tax refunds, people familiar with the deliberations said.
A lawmaker and two congressional aides who declined to be identified said the provision, which would have let companies claim an estimated $67.5 billion in tax refunds this year and next, will either be dropped from the bill or restricted so that it benefits primarily small companies.
Bloomberg.com refer=home
If this is true, better count on unemployment going higher.
Is this the first time we've had two consecutive days of djia closing below 8k?
Sportsfan writes:
he must have greater than 60% of the U.S. Senate in favor of more vigorous action because the most radical of them have basically said they will filibuster anything they don't like.
--
Being able to beat a Repub filibuster in the Senate is a precondition for nationalization, but getting the Democrats behind nationalization will take some work, too. And behind that the country in general would need to get behind it, at least 60% if not more.
I wish it weren't so, but it is.
Yes, but the west is special. We may preach to "others", but we do what we want. We are sure this will end well, as we are the "blessed" people.
//The correct advice remains the one the US gave the Japanese and others during the 1990s: admit reality, restructure banks and, above all, slay zombie institutions at once. //
looks like the deal might have hit a snag....
Now where're talking prosecution.
Congressman Capuano says "I don't have a penny of my money in your banks!!"
YouTube -
Hmmm, according to this, there are some extended unemployment bennies in the stimpack, which are due to roll out first. Not a lot, but something:
http://www.businessweek.com/ bwda...+temp_top+story
\t scone
scone | 02.11.09 - 4:40 pm | #
I don't think the stimpack will do the trick. I think a berserk pack is more in order.
Actually, when it comes to taking over insolvent banks, and printing money, the Feds can do whatever they want. It may end up being a last resort, but I view a few major bank nationalizations and a further expansion of the Fed's balance sheet with toxic debt as pretty much inevitable at this point.
Anonymous @ 4:22
The biggest beneficiaries would have been bubble companies, like homebuilders
Comrade Byzantine_Ruins writes:
Elvis(Excellent) writes:
Are italics Italian? Just wondering. Ciao.
Yes,
Do you guys write for wikipedia ?
Italic type - Wikipedia, the free encyclopedia
Lots of our banks ARE insolvent. But we have over 8000 banks. Not only is nationalizing all the bad ones at once VERY difficult, it is also VERY negative and scary to the public. The Treasury plan must do this without panic and be expedient without being immediate.
Sounds like the proverbial rock vs hard-place.
@ joe shmoe
You are dreaming. Obama does not even want to nationalize.....he is too much of a banker owned tool.
Did you not see his interview yesterday? He said that it would be far too complex to nationalize in this country so he is opting for the Japan scenario.
Jas Jain writes:
...A good govt could have easily prevented the current financial crisis...
True and very sad !
But they seem to have been financed to a good deal by Wall Street and thus looked the other way.
So, now you have the mess.
Being able to beat a Repub filibuster in the Senate is a precondition for nationalization,
joe shmoe | 02.11.09 - 4:42 pm | #
How about a stealth nationalization of a couple of them by acquiring 51% voting rights?
At this point, though, I'd settle for enough voting stock to get back the $78 billion that Paulson handed out for free. Then I'd wait to see who asked for more money.
damn messing with my head
http://3.bp.blogspot.com/_5vkPiCEjjdg/SZLSrKu-8oI/AAAAAAAADU4/VhutksJ7M-g/s1600-h/obamabush.png
linked from ECONOMICROT
Just out, GOP will not fillibuster vote on stimulus...
I thought the GOP lost but they seem to be in charge. Bipartisanship is starting to look like intimidation on Obama's part and that needs to stop right now. I thought Enamuel was supposed to be an attack dog.
Jim
Werner
How did Ackermann and co. thrive again?
Just out, GOP will not fillibuster vote on stimulus...
Comrade Kristina | Homepage | 02.11.09 - 4:28 pm | #
I don't think the GOP would do anything to actually stop the stimpack. I think their plan is to give the minimum appearance of support but still get it through. Strategically this makes the most sense: If they blocked it they'd get blamed for everything bad that happened in the next few years. By appearing not to support it they can say that the stimulus bill caused everything bad that's going to happen in the next few years knowing full well that even those strongly supporting the stimulus are saying that it's not going to stop bad things from happening, only minimize them (at best).
This going to end well.. right? Don't these f**kers understand that gaming the system can only work for a short time (maybe 2-4 decades) before reality bites back!
The most dangerous and self-destructive sentences begin with..
"We are special"
"we can get away with this"
"we are absolutely confident that"
"We know for sure"
Lawmakers Reach Framework on Budget Deal (Update1)
By Michael B. Marois and William Selway
. 11 (Bloomberg) -- California Governor Arnold Schwarzenegger and legislative leaders are nearing an agreement to close a record budget deficit with tax and fee increases on items including gasoline and retail sales.
Lawmakers have a common framework in place, Senate President Pro Tem Darrell Steinberg, a Democrat from Sacramento, told reporters today.
"Being able to beat a Repub filibuster in the Senate is a precondition for nationalization, .."
Can't senate rules be changed? The republicans talked about the "nuclear option," when they had trouble confirming Bush's judges.
If this is true, better count on unemployment going higher.
Anonymous | 02.11.09 - 4:42 pm | #
That is already baked in the cake...
How about a stealth nationalization of a couple of them by acquiring 51% voting rights?
sportsfan | 02.11.09 - 4:46 pm | #
Wyy bother when they can just take them over using existing powers? Once the biggies are out of the way, no one will notice the smaller ones.
Note:
Japan was a net-lender not net-borrower during the famous zombie 90s.
Not so much for us.
It's rather alarming in fact that the Japanese scenario for US has any credibility. It's what we call false choice fallacy.
There is in fact a third option. You let the bad banks go BK, then they enter receivorship. If enough of this happens you have a bank holiday justified by the public given the "crisis". You don't have to spend or lose political capital.
..whatever...
--bh
Is this the first time we've had two consecutive days of djia closing below 8k?
1.41 | 02.11.09 - 4:42 pm | #
Since last November, when there were only two days..
By appearing not to support it they can say that the stimulus bill caused everything bad that's going to happen in the next few years knowing full well that even those strongly supporting the stimulus are saying that it's not going to stop bad things from happening, only minimize them (at best).
ac | 02.11.09 - 4:50 pm | #
Thanks goodness for RINO's ;~P
The term "preprivatize" is so Mary Poppins. I like it, in a perverse "delighful" sort of way -
"A spoonfull of sugar helps the medicine go down."
I don't think the stimpack will do the trick.
ac
I doubt anyone here believes it will do any tricks. Or if they did, they wouldn't mention it-- instant dogpile.
Gold is not a fraud. Imagine that you are going to be dropped out of an airplane by parachute in the middle of an unknown foreign country.
Aside from clothes, a little food and a little water, you can have one other thing to take with you, to help you survive among the native population, which is restless and hungry. But it can only weigh 10 ounces.
What would it be?
Seizing something with negative value. Like stealing a junk car that costs $350/week to run. Not smart.
Just ... take ... it ... to ... the ... JUNKYARD !!!!
And get on with life.
Sol,
The problem is not the spoonfull of medicine. It's where the spoon is "administered". In fact, I guarentee in this scenario, it will not be orally.
--bh
"In my view, what we now have will be a fundamental economic reset," he said. "The economy is going to have to re-establish itself at a level of spending that reflects the real value of underlying assets before we can all start growing again at a healthy rate."
Steve Balmer is not such an idiot, after all.
"What would it be?"
A carbon fiber pistol and lots of ammo.
xxxxx writes:
...Didn't we once call these recessions? Downturns that caused inefficient companies to go out of business, "release" the resources that they were tying up, and thus allow growth in the more efficient business out there.
Exactly, the neccessary cleansing effect of recessions. And the more one tries to avoid them, the more is the pain once you finaly can not evade them anymore.
Werner | 02.11.09 - 4:54 pm |
I bet you like enemas.
Didn't we once call these recessions? Downturns that caused inefficient companies to go out of business, "release" the resources that they were tying up, and thus allow growth in the more efficient business out there. Of course, if these resources get tied up working for Uncle Sam, then growth does not recover so quickly.
\t xxxxx |
xxxxx | 02.11.09 - 4:42 pm | #
We had to figure out the hard way not to put out every forest fire that came along - they were actually doing a service by purging the rottenness from the forests and making them more stable, less prone to uncontrollable conflagrations.
Same difference with recessions.
It's a recession when it affects someone else's sector. When your job is on the line, it's a depression.
"Being able to beat a Repub filibuster in the Senate is a precondition for nationalization, .."
Can't senate rules be changed? The republicans talked about the "nuclear option," when they had trouble confirming Bush's judges.
econonoob
There are at least 2 arrows still in the quiver on filibusters, that the Dems could let fly.
1) Recall the so-called nuclear option that the Repubs threatened which would have eliminated the filibuster with a ruling from the presiding officer on the rules (the VP) - which was never enacted.
2) Even easier: the stimulus (or any spending authorization/appropriation bill) can be resubmitted as 'budget reconcilition', which by rule is not subject to filibuster. This is the true nuclear option.
The Dems don't want to use it if they can somehow get 3/5 approval without it. But is the final weapon, and the GOP knows this. When the public supports a measure as necessary, the rules be damned.
rich,
to answer your 10 ounce question--either a lighter or matches.
Seriously.
--bh
rich,
manual charging flashlight, blanket, compass, pen/pencil and paper, knife, watch, saw, twine, map, ...
tools + knowledge is what I would want, any time, any place
This thing was destined to fail before it even started: THE PRAGMATIC CAPITALIST » » THE “AGGREGATOR BANK” WILL FAIL
The more I watch this politicoeconomic struggle continue, the more amazed I am that the entire stimulus bill is being saved by a couple of women from Maine. They of course would be Senators Collins and Snow.
It got me thinking about the 20th Maine, the regiment that saved the Union's flank at Little Round Top. Had that flank collapsed, the battle of Gettysburg probably would have been over and Lee would have had a straight shot to Washington.
Thanks again to all you folks from up there in the corner.
--
Werner: But they seem to have been financed to a good deal by Wall Street and thus looked the other way. So, now you have the mess.
Here is what I posted A YEAR AGO:
As you well know, I make long-term predictions and then wait for them to materialize. Yes, there will be a commodities bust, a big one, but has it started is hard to say right now. Fed can only help Bankrupters and Fraudsters and can never help the real economy and the general population. What a bunch of morons Americans are to allow such an institution to even exist. There are consequences to breeding dopes that support democracy even when fully controlled by the moneymen. Moneymen got their special protectors in the Fed and they also control the USG. Americans are screwed because their system has turned against them with a vengeance. The question is: Who all will suffer?
Jas
tools + knowledge is what I would want, any time, any place
And an inflatable doll for those lonely nights around the campfire
The Auto CEO's were humiliated. And they only asked for 25 billion.
The Bank Ceo's were handled with kid gloves.
No one mentioned derivatives.
No one mentioned insolvency.
No one mentioned Receivership
!
MR T
Obama certainly did not endorse a Japan-style policy.
He said what Japan did failed and that what Sweden did worked . . . then he made the argument about differences of scale and traditions.
What Obama did in that interview was a step forward in changing American traditions.
The US President went on TV and discussed a historical case parellel to our own in which nationalization worked and was the right thing to do. He did not denounce it as socialism. He indicated that it is indeed an option that has been under consideration.
That leaves the argument about scale. It is, frankly, a weak argument that doesn't even need to be knocked over. You can go around it by nationalizing only some banks, namely the big ones.
Obama set up the issue as an exercise in pragmatism - whatever works, as he repeatedly says.
So, on one side he is chipping away at the historically monumental ideological opposition to nationalization in the US.
And on the other side he is buying two things by sending Geithner to be ping ponged about by the Congress and media: 1) he buys time so that more stories come out about the banks and more rage aginst them builds, and 2) the try-it-all except nationalization/bankruptcy style of the Geithner outline puts all of those alternatives up in the air to be shot down or fail.
Eliminate the impossible and all that is left is the possible.
And, meanwhile, a big bust at Citi or BAC would also help move the public and Congress along.....
Martin Wolf is right. The Geithner plan can't work. I don't think it was made to work, just like George W Bush never wanted the UN inspectors to actually determine whether Saddam had wmd.
Obama is putting a process in motion. We will be overtaken by the events that he has set up, more or less in just the way I think he wants us to be overtaken.
We won't know if I'm right for a while, I'm afraid. Wish it could be otherwise.....
House Dems giving up their cost-of-living raise. Heartwarming.
.
But seriously, if we're in deflation, why any cost of living raises?
House Dems to give up pay raise - Patrick O'Connor - POLITICO.com
.
New Thread: Housing Tax Credit: "Largely Dropped" ( 7 comments )
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tools + knowledge is what I would want, any time, any place
And an inflatable doll for those lonely nights around the campfire
nova | Homepage | 02.11.09 - 4:59 pm | #
I have my old ranger handbook which might fit the bill.
There is still the small matter of CDS weaving their viral tentacles across the entire financial system.
Hey, whodathunkit?
SEC May Pick Audit Boards Charles Niemeier for Accounting Post
By Jesse Westbrook and Ian Katz
Feb. 11 (Bloomberg) -- U.S. Securities and Exchange Commission Chairman Mary Schapiro may choose Charles Niemeier, a supporter of mark-to-market rules that some banks say worsened the financial crisis, as the agencys chief accountant, said three people familiar with the matter.
Niemeier, 52, was among the original members of the Public Company Accounting Oversight Board when it was formed in 2002. He has backed mark-to-market, also known as fair-value, which requires companies to book profits or losses when asset values rise or fall.
I find it remarkable that so much blame is being placed on fair-value, Niemeier said in a Dec. 1 interview with CPA Journal. Blaming fair-value for our current problems is like blaming your doctor when he tells you that you are sick.
SEC May Pick Audit Board’s Niemeier for Accounting (Update2) - Bloomberg.com
EvilHenryPaulson writes:
...Werner How did Ackermann and co. thrive again?...
What do you mean with "again" ?
I have my old ranger handbook which might fit the bill.
xxxxx | 02.11.09 - 5:01 pm | #
But not for your inflatable doll, of course.
I view the events of this week, and the last three, as a setup to take over the largest of the insolvent banks. The administration can't just step in on C without causing a run on all banks.
O has his press conference then Geithner lays out the "frame work" for the banking crisis approach, which is intentionally without detail. Geithner did present the stress test idea, which is what I was looking for in his presentation, as a way to obtain discovery, and present to the economic world, the banks that immediatey need to be taken down.
It will all happen in due time, and in an orderly fashion, so as not to cause a panic:
-Tell the public how bad it really is
-Lay out a plan for the financial world to digest
-Evaluate all the banks
-Display shock at how bad a situation C is in
-Preprivatise C while assuring the public that everything is under control and the FDIC will insure all deposits.
-LRR (lather rinse repeat)
This will crash the financial equities, but in a somewhat more controlled fashion.
thanks eco
ova writes:
...Werner | 02.11.09 - 4:54 pm |
...I bet you like enemas.
What is that ?
Well Werner, I don't think Germans are dopes but their government somehow let Hypo, Commerz, and Deutsche all get way out of control. So tell me again, how could that have happened
If the Democrats are in power, how come we haven't had a hetero sex scandal yet?
ova,
"And an inflatable doll for those lonely nights around the campfire"
We rolled up to the lean-to after the "shopping" excursion. Quiet night around the old mall, after the revenuers rolled through couple of nights ago. We used to go there in the good times, back when the place was warm due to central heating and not trash can fires.
Still, you gotta press on. Which reminded me, I managed to find some of those adhesive pads I was looking for. Ol Wanda's been a bit worse for wear of late, and hasn't been able to hold up long enough to make the puffing worth it...
Nostrovia,
@ Joe shmoe,
I hope you are right....I just don't buy it....maybe I am too cynical but I just don't see it as there being some master plan to slowly build support for nationalization.
I don't think they are that organized I think they are just flailing about at this point.
And so far the only thing we have heard out of this administration regarding the banks is that they want to keep them private, keep the managements in place, and not punish shareholders or bondholders.
If it looks like a tool, walks like a tool, and talks like a tool.....
Turbo writes:
Actually, when it comes to taking over insolvent banks, and printing money, the Feds can do whatever they want. It may end up being a last resort, but I view a few major bank nationalizations and a further expansion of the Fed's balance sheet with toxic debt as pretty much inevitable at this point.
Turbo | 02.11.09 - 4:44 pm | #
Maybe. OTOH, these banks are active buinesses. BAC paid out just under 10 billion in dividends last year. That's some massive cash flow.
There's a good chance if they can just kick the can down the road far enough, these banks will generate cash to pay the goverment back and cover their losses.
Ken Lewis estimated this would take 3 years for BAC. I'm guessing 5-6 years as cash flow decreases and losses increase.
Of course, these are years where the banks are not lending, and instead are just covering previous losses. The ecconomy will stagnate.
This is the Japanese model... and the one we seem to be following.
What if, because of the interdependent web of bad transactions, the vast majority of (investment) banks are zombies?
I don't think the administration is resisting nationalization because of some loyalty to free markets. I think they are motivated by trying to avoid a panic, a run, and a full collapse.
But saying this would create the very panic they want to avoid, so its all about doing everything conceivable except acknowledging the elephant in the room.
It got me thinking about the 20th Maine, the regiment that saved the Union's flank at Little Round Top. Had that flank collapsed, the battle of Gettysburg probably would have been over and Lee would have had a straight shot to Washington.
Sounds good to me - Lee in the White House. (Just Kidding. I got over the War of Northern Aggression at least five years ago. What matters now is the Duke/Carolina game tonight. Blue on Blue).
Jim
"In fact, I guarentee in this scenario, it will not be orally."
Promises, promises. Hence my veiled use of the word "perverse" (attempt at not to letting the PG-13 crowd see the dark side of the sun).
"Obama must have greater than 60% of the people in favor of more vigorous action to move ahead beyond what the stimulus and TARP2 provide. The people aren't there yet."
JimPortlandOR,
Quite true. But it is Obama's job to carry them to that point - if he is to be any more than a placeholder President. He seems to be waiting for events to force what he suspects must eventually be done. He needs, rather, to set and drive an agenda. Better to fail spectacularly than dismally.
ew thread
"The Auto CEO's were humiliated. And they only asked for 25 billion.
The Bank Ceo's were handled with kid gloves."
Remember that the bankers got their tax cheat in while the health lobby failed to do the same. That shows who owns whom.
10 oz, one item, with restless natives? It would have to be a k-bar knife, soon as you flash bling you are going to be left to cool to ambient in some latrine; with a good k-bar you have lots of options.
Most middle class have been in a personel recession all their adult life, but with a job, now it's a depression, no jobs...
Everything needs to reset, the longer it's put off, the greater and deeper the pain.
Bush was occupied else where with no time for his Country, Obama does not have a blue clue and is depending on those that put him in his position to find a position not to be in. These were people who marketed politicions and have no idea how deep the dodo is.
Jas Jain writes:
....Moneymen got their special protectors in ... and they also control the USG. Americans are screwed because their system has turned against them with a vengeance. The question is: Who all will suffer?...
Right, and one of the early things Obama did (in his campaign) was to decline "public campaign finance" .
We are told however that he got his money from a myriad of small scale (internet) contributions.
But who knows ?
And now he takes their (and their childerns) tax dollars to "bail out" the big banks/money institutions.
Some change indeed!
(or just the continuation of the "old style" politics ?)
Mr T
I don't think Obama is focused on nationalization.
I think he is focused on three related things: maximizing options for what can be done, building his administration's power to accomplish big projects, and emphasizing pragmatism in a crisis.
Nationalization isn't his goal, but under the circumstances - those that are given in the crisis and those that Obama is setting - some variation on pre-privatization is the only logical outcome. The terrain is being shaped to take us there.
I'm not saying that Obama is secretly Mr Spock. But he surely knows enough of what's going on.
As for his actions so far, pushing forward pay caps is new and was previously unthinkable (and is still opposed by the Repubs). If all he wants to do is to save the bankers, then adding fuel to the fire of public anger by lambasting the bankers for their bonuses was not the cleverest step.
And I am unpersuaded by the arguments that focus on Geithner and Summers. Folks spent too long under the Bush Admn, run by Cheney, and paid too much attention to Bush's nonsense about how he listened to his generals (except for those whom he fired when he didn't like what they told him - see Gen Shinseki, among others).
Obama chose Geithner and Summers partly for advice, yes, but mainly for their technical skills. Obama points, they shoot. I have no doubts about who is calling the shots here.
Now, what will Obama do? We'll have to outlast the Conjure clock to find out.
How about we stress test municipalities, states, pension funds, insurance companies, and the federal government, too? Insolvency is insolvency after all.
Ezra Pound writes:
The Auto CEO's were humiliated. And they only asked for 25 billion.
The Bank Ceo's were handled with kid gloves.
No one mentioned insolvency.
Yes they did. They said they were unbelievably well capitalized.
I think you meant to say, a couple of retards from Maine.
You are dreaming. Obama does not even want to nationalize.....he is too much of a banker owned tool.
Did you not see his interview yesterday? He said that it would be far too complex to nationalize in this country so he is opting for the Japan scenario.
Mr. T. | 02.11.09 - 4:45 pm | #
Agreed that he does not want to nationalise. But he's not a banker owned tool either IMHO. I think he's just too timid and in awe of wall street at this point. Hopefully that will change soon. Otherwise it's the Japan scenario as you said...
I'm not waiting to get stress tested, I'm moving money to my local credit union today.
EvilHenryPaulson writes:
...Well Werner, I don't think Germans are dopes but their government somehow let Hypo, Commerz, and Deutsche all get way out of control. So tell me again, how could that have happened...
I concede you Hypo; Commerz I am not sure, could be due to the aquisition of Dresdner. But Deutsche ? Hell, these 4Q 5 billion is just what a scrappy american car manufacturer can dish up. It's visible, but nowhere near the apocalyptic predictions made. I suspect my "collateral damage" scenario still applies, and they (Deutsche) seem to hold up pretty well.
"I think you meant to say, a couple of retards from Maine."
And of course Arlen "Magic Bullet" Specter.
How can you stress test individual banks in isolation? I thought the main problem was CDS, linking everyone together in an unholy chain.
It's Wednesday nite, and it's time for the Big O's designated weekly cocktail party at the White House. So far, this guy has shown us he likes to socialize and spend money. With a comfortable lead before the election, he hid out in the weeds when the initial bailout was being worked out last fall to avoid showing his cards. He trotted out Volcker to demonstrate integrity and has now dumped him in favor of the infamous Summers, one of the perpetrators of this Ponzi scheme. There is a giant hole in the structure of this economy and none of these people are attempting to fix it, but would rather spend money and enrich themselves while creating a perpetual waterfall of defaults and debt. The money supply is not really going up unless they continue to mark to fantasy all the rapidly increasing bad loans.
Is it even possible to nationalize the banks without triggering their related CDS?
The government may be forced to keep these zombie banks around just as they have done with AIG.
If the "stress tests" fail to give the desired result (A-OK), they will be asked to re-run the tests until they get the desired result .
And why is this even included in the legislation. Last I checked, banks were a regulated industry and bank examiners were supposed to be looking at this data on a regular basis.
stress test doesn't mean crap, it is so easy to fudge. what matters are what inputs they test, the variance of those inputs under normal conditions, and then what variance the stress test uses. E.g., if the normal level is 90% loan recovery and it historically varies 2-3% under normal conditions and I "stress" test by using a 4-6% variance then that may not be much of a "stress test " on the model (especially if there is potential for variances of 10%+. I want to see what inputs are being tested, their prior levels 1980-2005, their current levels, what variance is/was under prior/normal conditions and what the stress tested variance is.
If i see all that, then i could begin to draw valuable conclusions from the results. I'm not holding my breath.
for all you modeling geeks out there, you know the rule: GIGO
"I'm not saying that Obama is secretly Mr Spock. But he surely knows enough of what's going on."
That's my impression too. He must move carefully and hasten deliberately. No one in this country, not even its chief executive, is powerful enough to simply shove the established configuration in the ribs and tell it to move aside, nor would it be prudent to do so. What in the world would take its place? You may not like your bone structure, but what's going to take the place of your skeleton?
How many years did American economists and policy wonks tell Japan that a sharp knife cuts the quickest and hurts the least.
But when its ourselves, no, no, lets just sloooowly ease ourselves out of this situation. It will make it last longer and be worse in the long run.
Uffish Thought: I agree with you. Obama has always taken the long view approach, and he certainly does not operate in a bubble. He hears everything and acts in due time, he does not react.
It is not clear Obama has "due time" to act.
Unfortunately, it's as if FDR took office in January of 1930. People still haven't seen the full depth of the damage. And politicians still think there's something to gain by making nice with the Republicans and the plutocrats.
My take is that Obama is a smart, decent President. But in the face of the current crisis i feel that he's overmatched. Not quite FDR. But i could be wrong. We'll find out soon enough.
It will happen, whether they want it or not!
______________________________________How about we stress test municipalities, states, pension funds, insurance companies, and the federal government, too? Insolvency is insolvency after all.
Charles Kiting | 02.11.09 - 5:23 pm | #
My prediction, nationalization at the end of July. I give them 6 months to wake up. They will want to avoid this, but find that they cannot.
Hopefully this plays out into nationalization, and not zombie banks. I tend to think so only because Obama seems to deal with reality.
DWN
Joe Schmoe:
Circle gets the square.
Thanks for being a voice of critical thinking in this otherwise ridiculously cynical place.
obama is very intelligent but intelligence doesn't always translate to wise decisions. his intelligence will likely be channelled into politcal survival first and foremost. he has demagogued, over promised, lied, exaggerated, overisimplified, villified, and used all the dirty tricks that all politicians do to get elected. he's no different, just more dynamic, likeable, and persuasive than the others.
And politicians still think there's something to gain by making nice with the Republicans and the plutocrats.
--
My current fantasy/hope is that the plutocrats participating in the real economy will lose patience with the kleptocratic bankers and start to exert pressure for nationalization. Because otherwise it is going to take J6P riots to do the job.
donailin writes:
...Thanks for being a voice of critical thinking in this otherwise ridiculously cynical place...
Seems the cynics had it pretty right so far .
Because otherwise it is going to take J6P riots to do the job.
Anonymous | 02.11.09 - 6:52 pm | #
It does not take a riot, so much as a bank run. Think flash mobs that co-odinate mass withdrawls. With no deposits, no bank. BoA this Friday?
CR qoutes Martin Wolf:
The correct advice remains ... and, above all, slay zombie institutions at once. ...
A further justification is gross overpopulation:
Over the past 60 years, the U.S. financial sector has grown from 2.3% to 7.7% of GDP.
from
Skill Biased Financial Development: Education, Wages and Occupations in the U.S. Financial Sector
(Issued in September 2007)
"Werner writes:
donailin writes:
...Thanks for being a voice of critical thinking in this otherwise ridiculously cynical place...
Seems the cynics had it pretty right so far ."
100 bucks says he doesn't see it. . .
Before this all over everyone will be stress tested and you may not like the results.
"Stress Test" usually applied to engineering principles related to bridges and rocket design. It's now the phase of the moment as applied to the current state of banking conditions. Here's a clue, it's FUGLY!
Far too many Americans are quite simply stupid and drink at the TV fountains of stupidity:
CABLE NEWS RACE
TUES NITE, FEB 11, 2009
VIEWERS
FOXNEWS O'REILLY 3,494,000
FOXNEWS HANNITY 2,658,000
FOXNEWS BECK 2,370,000
FOXNEWS BAIER 2,305,000
FOXNEWS SHEP 2,190,000
FOXNEWS GRETA 1,847,000
CNN KING 1,761,000
MSNBC OLBERMANN 1,485,000
CNN COOPER 1,286,000
CNN BLITZER 1,246,000
MSNBC MADDOW 1,240,000
That pretty much says it all.
Americanus super-stupidus will deserve everything that happens to him.
How about a shovel ready stress test on toxic assets?
With the Geithner plan (or unplan?), the new administration blew their first chance at bringing the house of banks in order. Mandatory stress test could give the adminstration cover to change course and nationalize the insolvent banks anyhow.
That´s after listening to the Obama reply on why we don´t nationalize. Let´s see if it makes sense.
See where am I going? The administration could be looking for a way to benchmark and nationalize what is needed using a technocratic procedure with a clear way out, as a way of doing the work with some political cover. Essentially, the idea is to get the "N" word out of the debate, and make it about banks getting "intervined" after failing to comply with the "agency"´s regulations.
It is convoluted, and I might be looking for a rationale that is not actually there, but it makes sense; it gives them a way to do what is needed without actually having to name it. Nationalization might be econonomically necessary, but is not politically feasible; this could be a way to create political cover for it.
What you think?
rich
I've spoken with a few old guys who flew for Air America over here in SE Asia, most if not all wore gold bracelets just in case they were shot down inside of Laos, Vietnam, Cambodia...
so there's something to what you say... although, I'm sure they also carried their firearm
comparing Obama unfavorably to FDR sounds like revisionist history to me. Didn't FDR take a long time to sell WWII to the american people before committing us to the european theatre? Didn't he advance communication initiatives before disclosing his full tactical plans? Didn't he try many more things than those that actually worked and that we actually remeber him by?
Let's keep our heads people, and recognize that this president brings far more juice to the squeeze than we could have ever hoped for during an epic crisis. Obvious intellectual and political chops from where I sit.