Jiff

Paulson has already said that he would not stay no matter who is elected prez.

Alice Rivlin would probably be a decent replacement.

I think all the FDIC needs to do is to target one reluctant bank for takeover, It’ll scare the hell out of the rest.

It depends upon the intent of these bankers who refuse to loan. 60_Minutes talked to the CEO of Bank of America and he insisted they were loaning. This means it might not be a unified plan or conspiracy of all the big banks and that each is acting in the interests of their own bank. But, if many or just a significant number are working together, then it’s enough to think we have something akin to a serious revolt of the Rich & Powerful. Odd really, after all the rhetoric over the decades about the Marxist revolution and all, that it would be the Rich who (presumably) are worried about Democracy taking hold here or that some government policy they desire won’t be continued into the next administration. I won’t speculate on that, though I have ideas, but in any event that case would be very serious.

We can’t expect Paulson to really respond and that means a worsening situation for some time to come.

When (if our Dem desires come true) the Obama administration takes office they need a plan. Obviously getting rid of the toxic mortgages, as the bailout originally intended, should happen, though it’s such a mess it’s hard to know how long it would take to really fix things. Even then a concerted bankers revolt wouldn’t have to loan. It would take more force from government to make things happen. It becomes very messy at that point.

The biggest reason I was against the bailout is because it never addressed the problem: insolvency. Bottom line is there is still no way to know who is solvent, and thus who to lend to.

Until the information is made public as to which institutions will survive and which will die, we will be at a stand still with lending.