Comments on: Banks Want Government Subsidies to Buy Assets from Themselves

By: Legacy Loan Program Called Off « The Baseline Scenario

Legacy Loan Program Called Off « The Baseline Scenario — Thu, 04 Jun 2009 03:38:12 +0000

[...] last week at least some banks wanted to participate in the program – to buy assets from themselves. Once Sheila Bair rejected that idea, I guess they lost interest. Essentially the stress tests [...]

By: idaho beef

idaho beef — Sat, 30 May 2009 19:56:52 +0000

do you recall the old V-8 commercial, where the characters are smacking their heads – oops! they should have had a V-8. it feels like america is having a similar moment – oops! shouldn’t have let the government take it this far with the banks.

By: The Gold Standard » Consistently high quality stuff at …

The Gold Standard » Consistently high quality stuff at … — Sat, 30 May 2009 11:41:47 +0000

[...] for these two links – one on ‘Banks tunnelling and the risk of inflation’ and the other on banks buying toxic assets from each [...]

By: Realtime: Brazen Tunneling and Inflation

Realtime: Brazen Tunneling and Inflation — Fri, 29 May 2009 18:50:13 +0000

[...] assets from ourselves and thus “participate in the upside” (p. C1 in print edition; reviewed here yesterday). In any decent society, this would set the red flags flying, but the banks have apparently lost [...]

By: Min

Min — Fri, 29 May 2009 16:09:53 +0000

“It seems like this proposal is too extreme for some people in the banking lobby to support; neither Scott Talbott of the Financial Services Roundtable nor Edward Yingling of the American Bankers Association was quoted.”

From the NYTimes yesterday, May 28: “The American Bankers Association, led by Edward L. Yingling, noted in a comment letter to the F.D.I.C., it would be somewhat odd ‘to hamper a program designed to benefit banks because of a concern that banks would benefit.’”

Now here we have numerate people writing to supposedly numerate people, and yet using the same word, “benefit”, in two different senses, in an attempted obfuscation, as though their audience were innumerate. (Maybe the real audience is NYTimes readers, however. :() When you translate “benefit” into numbers, the difference is obvious. This is another example of how the numerate take advantage of the innumerate.

By: Sheila Bair Listens to Me « The Baseline Scenario

Sheila Bair Listens to Me « The Baseline Scenario — Thu, 28 May 2009 23:58:36 +0000

[...] a comment » Yesterday I said that Tim Geithner or Sheila Bair should come out and slap down the idea that banks will be allowed to bid on their own assets. And today she did! Rolfe Winkler, [...]

By: The Baseline Scenario: May 27, 2009 | EthicalMarkets.com

The Baseline Scenario: May 27, 2009 | EthicalMarkets.com — Thu, 28 May 2009 21:56:03 +0000

[...] Banks Want Government Subsidies to Buy Assets from Themselves By James Kwak From the headlines of the Wall Street Journal: “Banks Aiming to Play Both Sides of Coin — Industry Lobbies FDIC to Let Some Buy Toxic Assets With Taypayer Aid From Own Loan Books (subscription required, but Calculated Risk has an excerpt). I thought the headline had to be a mistake until I read the article. To recap: The Public-Private Investment Program provides subsidies to private investors to encourage them to buy legacy loans from banks. The goal is to encourage buyers to bid more than they are currently willing to pay, and hopefully close the gap with the prices at which the banks are willing to sell. [...]

By: Juha T

Juha T — Thu, 28 May 2009 19:33:04 +0000

This blog rules! A fair and balanced look at the World!

By: Rockfish

Rockfish — Thu, 28 May 2009 18:29:28 +0000

Sorry, I don’t see where greed and self-interest have been destructive to the bankers at all. So, their portfolios are down a bit – that’s just a “market fluctuation.”
Furthermore, I don’t think they belive it EVER WILL be destructive, as they have been insulated form all serious downsides.
And, finally, I don’t believe people in the financial sector operate in the interests of their shareholders. Precious few have ever been asked to answer to those shareholders in any way. They operate for pure personal profit – maximizing personal income. The idea that a corporation is governed by, or responsible to, it’s sharholders has been demonstrated to be an utter fantasy.

By: JW

JW — Thu, 28 May 2009 16:45:46 +0000

Doesn’t the FDIC lost $7 in your example, not $17? Bought at $90, sold at $70, so losses are $6.50/$6.50/$7?

By: Dave Cohen

Dave Cohen — Thu, 28 May 2009 14:15:31 +0000

Re: But let’s not make it easy for them. If this proposal has any chance of going anywhere, then Tim Geithner or Sheila Bair should come out and reject it right now.

No, no, no. Banks buying assets from themselves was the plan right from the start! It’s a win-win!
OH! You’re my new favorite blogger fyi

By: Dave Cohen

Dave Cohen — Thu, 28 May 2009 14:01:09 +0000

Re: But let’s not make it easy for them. If this proposal has any chance of going anywhere, then Tim Geithner or Sheila Bair should come out and reject it right now.

No, no, no. Banks buying assets from themselves was the plan right from the start! It’s a win-win!

By: Min

Min — Thu, 28 May 2009 13:37:00 +0000

@Coffee Boy:

I wrote: “You have been watching too many movies.”

I apologize for any disparagement in that remark. I did not intend any. It is just that I thought of the movie, “Wall Street” and the quote from it, “Greed is good.” I did not mean anything personal by it.

By: Bayard

Bayard — Thu, 28 May 2009 12:48:59 +0000

This sounds like the mafia went to Wharton. It is better than any smoke screen or red herring discussed to date. It is Son of Ponzi – the money goes up and down and round and round and comes out here. This is better than most “two guys walk into a bar” jokes ever conceived. I just sort of laugh insanely to myself and wonder: does anyone other than those of us who follow things see the punchline coming – like to our fiscal gut? Well, unusual times call for unusual remedies. Sounds like prescribing botulism as a remedy for ecoli!!

As the toxic assets have been rotting and rotting, the economy hangs on the bogus-cide that we are experiencing as a cure for them. There is no solutiono except to let those who made the bad decisions suffer. Why do we continue to think that there is some clever painless way to cure the problems. There isn’t, and PPIP stands every chance of costing a tremendous amount of money and getting us nowhere. This is just the latest.

I liken what the financial industry is going through that the suggestions to cure it to the health care industry and private insurers spending more than half a billion to convince us and Congress that they can be the solution. What a joke. We have two extremely large hen houses and two covens of witch foxes to tend to them, and we, like the Roman crowds with the Gladiators, just seem to sit and applaud as the prospect of death looms closer.

By: What Should We Do About The National Debt? - Politics and Other Controversies - Page 2 - City-Data Forum

Thu, 28 May 2009 12:22:40 +0000

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