Comments on: Ten Questions For Secretary Geithner

By: Richard King

Richard King — Wed, 04 Mar 2009 05:54:38 +0000

I am having a hard time understanding why our government doesn’t buy controlling interest in the banks in trouble, fire the responsible parties,(with no parachute) and then recapitalize them. This may be a stupid idea but makes more sense to me than most of the suggestions I’ve read. Yes, “I’m mad as hell”.

By: Billy Jones

Billy Jones — Fri, 27 Feb 2009 04:04:12 +0000

god speed

By: Billy Jones

Billy Jones — Fri, 27 Feb 2009 03:58:40 +0000

i think the decision has been made…..

By: Listening To The Secretary « The Baseline Scenario

Listening To The Secretary « The Baseline Scenario — Thu, 26 Feb 2009 04:47:13 +0000

[...] The underlying question is in any case much simpler. How long can you say, “we are being bold” when in fact you are not? [...]

By: H Handegard

H Handegard — Mon, 09 Feb 2009 22:41:37 +0000

Re: the status of the largest 5 banks, it is possible that all 5 of them will have qualified opinions from their external auditors, questioning whether they are a “going concern”? If they all need major help from the US Treasury, and given all the talk about lack of liquidity in the system, doesn’t it follow that their 12.31.08 financial statements should have some large red flags raised as to whether they have the ability to survive 12 months? Not a good time to be an accountant with a large banking practice.

By: MortgageMod.org - Loan Modification » Blog Archive » Secondary Sources: Treasury Bank Plans, Lehman Collapse, Stimulus

Mon, 09 Feb 2009 19:53:09 +0000

[...] Questions for Geithner: On the Baseline Scenario blog, Simon Johnson poses 10 questions for Treasury Secretary Geithner on the Obama administration’s bank plan. One example: “How many of the largest 5 banks will likely end up with government as majority owner? Any honest market-based valuation of bank assets will show a majority of large banks are presently insolvent but can be righted with substantial new capital. If the answer isn’t “at least two,” then either the Treasury does not plan to properly value assets, or someone is not yet prepared to tell the full truth.” [...]

By: MortgageMods.org » Blog Archive » » Secondary Sources: Treasury Bank Plans, Lehman Collapse, Stimulus

Mon, 09 Feb 2009 19:52:48 +0000

By: Real Time Economics : Secondary Sources: Treasury Bank Plans, Lehman Collapse, Stimulus

Mon, 09 Feb 2009 15:13:28 +0000

[...] [...]

By: Questions (and answers) for Tim Giethner | The Humane Economy

Questions (and answers) for Tim Giethner | The Humane Economy — Mon, 09 Feb 2009 13:58:11 +0000

[...] 10 questions and answers are very, very good. Read the whole thing here. « It’s the system, stupid | [...]

By: C Dan

C Dan — Mon, 09 Feb 2009 13:34:50 +0000

Regarding the question of bondholders’ claims, I believe Simon/Peter would advocate them taking a “haircut” in the event that market pricing determined that the banks in question were insolvent (see above commentary on 2/5 of the largest banks being insolvent).

In that event, I’d expect Treasury to help organize the bondholders to do debt-for-equity swaps. This would effectively kill two birds with one stone. Get the liabilities down to a reasonable level and you’ll attract additional private capital.

By: FEDup

FEDup — Sun, 08 Feb 2009 15:58:34 +0000

Why is it that the public did not share in the record profits the banks made from 2000-2006, yet, now we are being forced to share in their record losses? Perhaps Mr. Geithner should also bailout each and every taxpayer who lost a home, his job, his investments and his retirement plan. Unfortunately, the govt’s actions speak loud and clear to those who can still hear and see straight: “the corporations have more rights and are more important than the individual”! God Bless the Corporations!

By: Bob Spencer

Bob Spencer — Sun, 08 Feb 2009 11:08:13 +0000

What kind of methodology will he use to evaluate the stimulus package’s impact? Can he monitor the impact monthly? Can he communicate the evaluation results to the press and public so that most would understand what adjustment need to be made? What are his step by step milestones that will get us to the place where we want to be? Finally, how will he obtain feedback from others that that are receiving the funds or are seeking improvements?

These are pretty basic items, but I have not heard if the Treasury Dept. has any plans for doing an evaluation.

Bob Spencer

By: Lisa Pinero

Lisa Pinero — Sun, 08 Feb 2009 07:17:51 +0000

I would like to hear more about how Geithner plans to use the TALF program (Term Asset-Backed Securities Loan Facility). This program looks like a “help our buddies in hedge funds make some easy dough while the taxpayer takes on the risk” kind of deal. Wow, what a surprise coming from Mr. Geithner!

A link to today’s article titled “U.S. Weighs Fed Program to Loosen Lending” in the WSJ:
http://online.wsj.com/article/SB123396660738259033.html#articleTabs%3Darticle

By: Commode with Legs

Commode with Legs — Sun, 08 Feb 2009 06:09:29 +0000

Chris Whalen was in fine form at AEI recently (my transcription):

“Going back to the historical American model, not the Swedish model, why did the Founders put bankruptcy in our Constitution? Because they knew that finality was good for society.

“The longer we dally with the big banks, the less growth we will have. It’s a very simple trade-off.

“Shoot the banks fast. Let Sheila take care of all of them this summer. Break them up and sell them.

“There will be a crowd of people standing on the other side of that receivership, OK? (Many of them are my clients! They all have shelf registrations with the OCC and FDIC right now.)

“You wanna fix this? Feed The Beast. Let them buy the assets.”

John Paulson: “Even in opaque areas of the markets such as in bank debt, mortgage backed securities and other distressed securities, we see hundreds of millions of dollars trading every day.”

Fantasy Geithner: “We nationalized the 35 largest banks this morning in order to begin an honest restructuring of our capital markets… The President has abandoned the stimulus package. For now, fiscal policy will consist of support for state and local governments, and a cut in the payroll tax… This morning we submitted our plan to abolish the SEC and eliminate the Fed’s role in banking oversight, and create a new entity charged with overseeing our financial markets….”

Real Geithner: Hey folks, we’re just gonna blunder about for a while longer. Get used to it.

By: Stefan

Stefan — Sun, 08 Feb 2009 03:57:09 +0000

[7.]” – Treasury needs to request further funding from Congress in the next month or so, in particular several hundred billion dollars…”

This would be the thorny point at which real problems are going to arise in people’s minds about the way things are going. So I suppose the whole insurance scheme is a way Treasury hopes to end run further public disclosures of the need for stupendous funding.

It doesn’t seem likely that Geithner can be forthcoming and honest before the public. He just won’t have enough confidence that any of their schemes can work. Will Buiter’s anxiety about a lack of political will prove well-founded?

It’s hard to see how we can safely escape danger without real sincerity.