‘BARF’ – lol

Jane, Geithner already addressed the issue of transparency. They’re going to post the contracts on a website. Nothing to see here. Move along.

My first impressions of Mr. Geithner are not all that positive. I’ll try and keep an open mind and wait and see. The NYT article on how he “won” the argument on not hitting the banks “too hard” didn’t impress me that he has the guts to make the real tough decisions.

http://www.nytimes.com/2009/02…..f=politics

We Program Managers had an old saying when dealing with software weenies – “Line them up and shoot every third one and production will improve”.

BARF makes me larf.

Geithner: We have a website where we’re going to put all the contracts, where people can see what executive salaries are. So rather than standing up to the banks and limiting compensation, we’ll let the public do it for us.

So am I to understand that the contracts will be posted after they already been executed? What the fuck good does that do? Oh yeah. We can break the contacts if we raise a stink, right?

Yeah, right.

allowing the bankers who caused this mess any voice in the recovery is insane

insanity, doing the same thing and expecting a differant result

we are insane even considering the strategy

Dodd: moving forward more important to knowing how we got here.
Shorter Dodd: we’ll not learn from past mistakes.

Dodd throws a shotball: what is the objective.
Geez, I thought we’ve been thru that one hundreds of times.

dodd disapoints

knowing how we got here is the only thing that can keep us from doing it again

We Program Managers had an old saying when dealing with software weenies – “Line them up and shoot every third one and production will improve”.

pour encourager les autres.

We have a special place for the insane — The Republican Party.

Dodd: moving forward more important to knowing how we got here.
Shorter Dodd: we’ll not learn from past mistakes.

Looking forward not back seems to be something of a mantra with these Democrats.

And in our special plan for the emotionally disabled, we elevate them to prez 3 out of 4 times.

Dodd has been too cozy with curruprations for too long.

Yep.

Lotsa hedge funds in CT. Lotsa campaign contributions. Ditto Schumer.

Just be thankful it ain’t 4 out of 4.

Krugman has a glimmer of hope in the plan.

Heh. The “it could always be worse” theory of day-to-day coping.

This is a pretty informative discussion of the failures/problems in getting transparency/accountability wrt to TARP funds.

http://www.nytimes.com/2009/02…..ef=economy

I do look for the silver linings!!!

I must conclude that Dodd had a big hand in supporting the current on-going collapse of the US and world economy. THAT is the only reason any politician gets into the whole, “Let’s not argue over who killed whom” thing (Monty Python and the Holy Grail).

Geithner is ENTIRELY and EXCLUSIVELY interested in helping his bestest buddies on Wall Street and in the banking industry. The only actual fix here, and least painful overall, is NATIONALIZATION. End of story.

No matter what, I am adamantly opposed to Geithner and Obama stealing MY tax dollars and giving them to rich bastards in banking and on Wall Street. NO! NO! NO!

Instead, take THEIR assets and liquidate them and use any proceeds to pay for their liabilities – as part of nationalization. They can all live like the rest of us. They don’t NEED caviar, limos, private jets, call girls, thousands-of-dollar toilets, etc. THEY pay, not me, my parents, you, etc. They pay FIRST and MOST.

The trouble with what Krugman wrote is that he is still assuming that the toxic assets have some monetary value. I think they’re all under water and everything that is going on is kabuki to hide that as long as possible.

Question: Goldman Sachs has 32,569 employees, does this include those working for the Treasury

Geithner has taken a couple of uppers since his morning speech.

The reason the stock market continues to fall is that this “plan” does not in fact (and is not designed to) resolve the actual value of the notes held by the banks, and so the actual balance sheet of the economy. The public and the shareholders and management of the non-financial businesses KNOW this is all a sham, that the cost has not yet been paid, and will NEVER be paid until it is accurately totaled — and so the insecurity in stock value and in consumer spending.

The financial “elite”, the thieves and gamblers who created this situation, along with the politicians and the legislation they bought, are desperately trying to avoid accountability, and will put the public and the republic into a catastrophic situation before they are taken to task. And if they can, they, like the masters of Japan, will happily put the U.S. (and possibly the world) into two decades of depression, recession, inflation, and stagnation and all of the social distress that entails, in order to maintain their hold on power.

Make no mistake about it, Geithner’s press conference today was a naked exercise in power, “Hello, we’ve lost all our money, and so we’re going just going to take yours and eat our caviar while you choke on stale crackers. Vote new leaders in? Hah! We own them all. Fuck off and die; we own you and everything you think you own!”

This is raw, naked power on display. Will any one (person, institution, public) have the guts to confront it? Will any one (person, institution, public) grab the hand which is currently in our pocket, pull it out, and yell, “No more!”?

And a TPM reader has an interesting take.

Wall Street the Bad Assets Relief Fund (BARF).

love it.

BARF for the zombie banks.

You mean, the whole treasury dept?

When I started in Goldman Sachs in 1976, they had a little over 1,000 employees, of whom 24 (count them) were women professionals.

Probably hitting the pipe.

Keeps them from seeing what’s gaining on them. (Otherwise they’d be as scared as the rest of us, or as crazy as the Rs now are.)

No, those aren’t real jobs because they are government jobs.

Naked power? Obama? Noooo. He’s for the people. /s

I still get no explanation for this: I have read repeatedly that the toxic assets fall into the order of 10s of trillions of dollars in liability. That is, they would cost more money than exists on earth just to break even. So, how does tossing even 1 or 2 trillion dollars at it, in ANY guise, do jack squat but run up the debt for no return?

Are the many estimates of the total liabilities off by a factor of 10? How does a mere 1/10th (or less) of their value in taxpayer giveaway put even a dent into the liabilities? The ONLY way it can work is if the intent and result is to re-inflate the housing bubble so that the assets come back close to break-even, see the banks sell it all off at a minor loss (or even a slight gain), and THEN let whomever bought them enjoy the fruits of the inevitable collapse of the re-inflated bubble.

oui

Another one we used is: “A public execution every once in awhile is good for morale”.

Obama is in a mirror-image political situation.

don’t buy it.

1. wasn’t the depression already 4 years old when fdr came to office? didn’t everyone already know it wasn’t his fault? don’t see that happening. this is going down on obama’s watch.

2. there was a vibrant progressive populist movement. right now in this country populism belong almost entirely to the rightwing.

Bingo.

He could be sleeping and still be more animated than this morning … I wonder how much of his hesitancy was the result of Officials laughing at his Plan – from HuffPo

that was my take as well;

“we’re doing it again even though you know what we did the first time caused the problems…tough luck buddy, life ain’t easy”

Bennett give Geithner an attaboy.

that’s what dean baker says.

Yeah, there was some ref to that in Bernanke testimony. He sloughed it off, of course.

Probably, many investment portfolios, IRA’S, college tuition 529 plans, mutual funds, etc. contain a chunk of bad bank stock like Wachovia, BOFA, etc.

There is a concern that crashing some of these big banks will hurt the shareholders, who are in many cases, average working class people.

Just pointing it out. Mostly, I find it preferrable to let them crash and burn as opposed to bailing them out with tax dollars, not firing the assholes, and not preventing (by enaction and/or enforcement of law with penalty of prison) the same derrivative ponzi schemes from rolling again.

An emerging consensus among the DFHs!

but somehow lying to us is supposed to create confidence in the banks and our government. don’t know about anyone else, but it’s not working for me.

marcy kaptur too.

I think there’s not a lot of market value left in the financials stocks, so most of the hit that will be taken by those investors has already occurred. What’s going on now is more about bailing out hedge funds, I suspect, though there is no way of actually knowing because they’re secret.

Wall Street is not very impressed though

The “good” thing about letting us po folk eat shit along with the biggies invested in these criminal banks and their “assets” is that while we all lose our investment shirts, in the aftermath, those of us NOT rich (all the old folks, worker bees, etc) could then be aided via social programs while the rich are simply allowed to SUCK IT BIOTCH!

There is an upside.

Bennett mentions that there is no demand for credit. Give him a brownie point. I’ve been saying that for months.

I also recommend: “The beatings will continue until morale improves.”

[Mod Note: The fantasy violence can stop now]

there is no way of actually knowing because they’re secret.

so much for “i will always tell you the truth”

must be a matter of national security /s

The only reason I mentioned that is because I briefly put myself in Geithner’s shoes. He was handed a pile of shit (partly of his own pooping) and has been working like crazy, yet everybody hates him. Boo hoo hoo.

I wonder how much of his hesitancy was the result of Officials laughing at his Plan – from HuffPo

He has bipartisan laughter within congress and the digust of every clueful economist that I’ve read. There are getting to be street demonstrations about the housing situation. All this doesn’t look good.

No one could have known that all our deregulation and bizarro credit default swaps and other opaque shenanigans could be missile to take out the economy!

I wish a Senator with some credibility on this (a problem in itself) would just call this the most cockamamie giveaway program to those who created this mess that they have ever heard.

The last 6 months have provided plenty of evidence why Geithner’s plan won’t work but zero amount that it will work.

must be a matter of national security /s

I’d recommend removing the snark. I’m convinced that’s the way they think about it: national economic security. If we knew how bad it is, they think, the economy would never recover.

Geithner just did a supply side dance.

About those 10s of trillions of bills due: yes, the accounting says they are there, and there are several ways of dealing with them.

1) Declare all such transactions to have been illegal. Wipe the slate clean. Would be fairly disruptive to the financial class, but would solve a lot of problems.

2) Kick the ball down the road, taking salaries, stock profits, and converting as much crap to cash as you can, using the public’s money, before the hammer comes crashing down.

They’re doing #2, as you can see.

What’s sad is, a Rethug is more likely to say that than a Dem.

bernie sanders. i still remember his floor statement and his lone “yea” at the voice vote for his admendment of a surtax to pay for the TARP last fall. he was the only senator during that week who need not be ashamed.

Hugh, when Obama used the phrase “Clear Instances of Wrongdoing” in his response to Sam Stein last night, I thought of printing your list and mailing it to him.

Get lots of paper, Edward Teller did that. You might want to ask him how long it was.

who is this senator who just asked which of our major banks is insolvent? i only have audio

If POTUS wanted to show a clean break *which would really frighten WallSt, but if he did* then he wouldn’t have chosen Paulson’s TARP author as Treasury Secretary, would he? I don’t know why anyone is surprised at Geithner’s bailout; it’s almost exactly what he wrote up for Paulson before Paulson changed it all after Congressional passage.

These guys are looking out for their own: Wall Street bankers, stockholders, and bondholders. Taxpayers are very low on Geithner’s “who I care about” list. Very very low. Otherwise he’d nationalize the banks NOW instead of waiting another six months and throwing another two trillion at worthless, insolvent banks that won’t lend.

Heh. Geithner just said it: can’t say anything about individual companies because of national economic security.

must be a matter of national security /s

I’d recommend removing the snark. I’m convinced that’s the way they think about it: national economic security. If we knew how bad it is, they think, the economy would never recover.

giethner just makes your point.

Bunning (R-Tennessee)

Both banks and hedge funds are insolvent. Both are hiding it and Geithner appears to have come up with a plan mostly to inject a couple trillion dollars into both.

You owe me yet another drink. *g*

fair trials!!!!

LOL there is a lot of ignoring the obvious, isn’t there?

If we knew how bad it is, they think, the economy would never recover.

they’re right about that, people are afraid of the word “depression” yet here we are, everyone knows it but nobody has the nerve to say it

I personally agree, it’s probably irresponsibel to go public with the fact that this is indeed a depression

yep, yet another. must be a lot already.

Hugh, when Obama used the phrase “Clear Instances of Wrongdoing” in his response to Sam Stein last night, I thought of printing your list and mailing it to him.

and then did you?

They’re continuing to live in the “making reality” world while we continue to struggle in the “reality-based” world.

I will happily store overage

Bunning (R-Tennessee Kentucky)

Unfortunately, my homestate has to take the blame for Bunning. And McConnell. Tennessee gets to claim Corker and Alexander (which basically there isn’t a whole lot of difference in the four – except that Bunning is senile)

a fucking R

Who’s counting.

Sorry. I looked at the screen and thought that’s what I saw. A brain fart.

LOL! hope you have a big warehouse

Well, the Rs (unlike the Ds) are at least an opposition party, so let’s milk them for what we can.

not enough zeros. *g*

Apparently I need to make an ink and paper run first!

amen.

“Investors” like Goldman are hoping to pump the share prices of financial stocks back up so they can short sell them all over again for fun and profit.

Pump & dump.

This picture is from 12/07 when Hugh’s list was about 2/3s the size of what it is now. I believe it was printed on standard 8 1/2 by 11 at 9 or 10 point font.

Costermongers interlude: Palin backs out of CPAC.

Re Krugman, I think he is wrong.

The stress test is a figleaf. It is a substitute and not a good one for an open accounting of what banks have on their books.

Then he says that the government backing of all this crap isn’t “ring-fencing” except maybe it is. Of course, it is. That’s the whole point. There is no value that can be given to these crap assets that doesn’t leave the government holding the bag or the banks declaring bankruptcy. I’s one or the other. Geithner is definitely going for the first option.

Finally he says he’s OK with qunatitative easing, i.e. the Fed running the presses hot. WTF has that gotten us so far?

The AP has been corrupted by its current bureau chief. It’s a shadow of what it used to be, when impartiality and “just the facts, ma’m” ruled. Now they’re just tools of the Movement Conservatives.

geithner is now making the case for entitlement reform – ss and medicare.

i really hate this guy. this hearing is not good for my character.

Fi

nally he says he’s OK with qunatitative easing, i.e. the Fed running the presses hot. WTF has that gotten us so far?

but, but… bernanke is a good guy. krugman knows him.

I raise the question, again, when are they going to certify that the banks are really most sincerely room temperature?

I was advised previously that they are all vampires. If that were the case, garlic futures would’ve gone through the roof.

Finally he says he’s OK with qunatitative easing, i.e. the Fed running the presses hot. WTF has that gotten us so far?

I have long thought that all that kind of activity of the Fed has no influence on the real economy. It’s only interest rates that matter, and once they are zero, out of ammunition.

from galbraith:

The other incentive that they had and which many of them acted on was to loot the institution because after all sooner of later the regulators are going to come in and you’re going to loose your access to all this wealth and power. So the top officers, if the institutions weren’t actually taken over by criminal networks, which happened in very important cases, Charles Keating and Don Dixon and others, the existing officers had an incentive at least to behave in ways to destroy the institution.

this is the foreseeable outcome. that the bailout money will be looted.

Tester: Would you ever let the big systemic banks fail?
Geithner: we’d do whatever is necessary to prevent that.
Tester: Then, if they’re too big to fail, where is the accountability?
Uh, yeah, good question…

Wow.

Geithner’s hearing is not good for anything. Your character, stock market, consumer confidence, etc. He is a total failure.

Thank you for that! I think I’m gonna need a bigger boat printer!

I’m trouble with the feeds. What did Geithner say about entitlements? Talking about entitlements right now seems incredibly dumb. Going into a depression they want to reduce what little safety net there is? Depress demand further? What are they thinking?

We have to take emergency measures now, but when things get back to normal, have to bring down the budget.

In context of long-run deficits. Seemed to say that the first sign would be on Obama’s forthcoming budget. That should be fun.

A walking, talking Peter Principle.

Speaking of community banks, they’re the only thing keeping the historic preservation org I’m on the board of going this year.

the bailout money will be looted.

Yep. they will steal everything down to the wall paper, and then toss a figurative match on the way out. If they can.

geithner was trying to reassure that budgetary responsibility re the budget was coming and that is was important to deal with long term costs. i think he did actually say the words “entitlements” “social security” and “medicare”

Failing upward.

And Jane, it seems a strange time to be talking about putting that back deck on the house when it is burning down.

Heh. Corker hits a home run. Question of who will takes the losses and when.

my interpretation is that the cost of bailing out the banks will be the social safety net.

Corker: Shouldn’t the losses be addressed now?
Geithner: I come down on the other side of the strategy.

Asked point blank whether this is a solvency problem or a liquidity problem, Geithner responds that the gimfladget on the hufflegiver needs to be properly primilized.

remember what obama told is in september?

Obama: The Bailout Just Ate Universal Health Care, Energy Policy, College . . .

Should have had quotation marks around it.

Transparency at last!

I hate it when it takes a Republican to ask a straightforward question.

Not familiar with Corker…is he a wingnut? He seems remarkably lucid…

He’s the worst of the worst. He led the pack against the auto co. bailout. Very interested in union busting (nonunion auto cos in his state).

Aaaah. One of them. Thanks.

Wasn’t Corker one of the crazies on th auto bailout?

One of the major reasons the states are in trouble are the result of their investments in the toxic securities. They took really bad decisions, iow, in their rôle as fiduciary. They were gaming the system as much as other investors, knowing full-well the consequences. The AIG insurance scheme and the dodgy bond raters marking worthless junk as AAA securities gave them an excuse when the jig was up. But they knew better.

Corker (R-Tennessee), the only new R in the 2006 senate.

ha! now you owe ecahn a drink too *g*

Yes, see 119.

Here’s a bargain: I’ll save them all up for the next FDL mid-Hudson BBQ.

how does that compare with decreasing revenue due to economic recession?

i’m game!

Another costermongers interlude: W welcome signs being stolen from houses in his Dallas neighborhood.

Thanks for the reminder. I’d forgotten that.

Thankfully, neither nonprofit board I’m on has gotten caught with any shit (so far anyhow).

Q: can you talk with us about assest

A: enormously difficult to be fair and realistic and have gov understands the risks. gov could decide. or independent model based valuation. will instead use the private/public fund to help us make these evaluations.

me: good idea. because the markets have been doing such a grand job of allocating and evaluating risk.

me: just shoot me now.

for hugh and anyone else having trouble with the streaming. cspan radio is working v well for me and it is only audio:

here is the direct real player link:

http://play.rbn.com/?url=cspan…..8;rbnkey=1

ConEd jackhammers just started outside my window. Better listening than Geithner.

It means death to the states, I think.

i was outside earlier just to get some fresh air. gloomy, gray dirty snow day. this hearing has me thinking about going out again to take advantage of the nice day.

I’m in the city. Gray. Will go out after hearing. I’m too deeply into it to give it up now.

even though i’m bitching and whining…. just want to say thanks to jane for the thread. maybe it’s true that misery loves company, but no way i could listen to geithner without company.

good (for me *g*)

I’m thinking primarily of government pension funds. This affects their bond rating. Their ability to raise money in the bond market is impaired. It’s a downward spiral from the aforementioned bad decisions. First it was the dot.com boom-bust cycle followed by the real estate boom/bust. It was the equivalent of the roaring twenties.

No shit. I played it over and over to transcribe it accurately. Is this as big a load of bs as it sounds?

ditto that

We don’t know how we’re going to value the “assets that are at the center of this crisis.” “We’re exploring a range of different structures for this program,” and we’d love to have your suggestions.

What a jerk.

tarp transparency being discussed.

me: fed transparency?

me: good idea. because the markets have been doing such a grand job of allocating and evaluating risk.

The government could value the assets and the instruments based on them tomorrow. It doesn’t because this would show the banks were insolvent.

Stress testing is already underway? What does that mean? Where? When? With which banks?

thank you for getting that transcription. un-fucking-believable.

The government could value the assets and the instruments based on them tomorrow. It doesn’t because this would show the banks were insolvent.

ding, ding, ding!!!

We’re going to ask banks for a plan of what they are going to do with the money, then they’re going to have to report on a monthly basis and we’re going to let the public see that.

This is what I believe is called hands-off, seat-of-the-pants policy. And it sounds exactly like the policy enunciated by his predecessor.

Just switched over to cnbc. Anchors all cross talking about how much value there is in these assets. People lining up to buy (predator funds), but banks won’t sell because of what it would do to their capital ratios.

Gee Moderator, I’m sorry if I upset someone’s sensibilities and was politically incorrect.

But FYI, these sayings are not “fantasy violence” but real world sayings that are used quite often by Program Managers. I find them a lot less offensive than the obscenity that you allow very often and which doesn’t seem to bother you.

To each his/her own and this is not the first time I have been admonished for saying something pragmatic on this blog.

Wow. Can’t believe you were moded on that. That’s a famous slogan of U.S. Marines, on T-shirts and everything.

geithner: deep obligation to bring the deficits down to a sustainable level. must address long term entitlement problems

me: how about our social obligation to take care of each other? why does no one mention the military budget? why always social security and medicare?

Some people are so averse to taking any action at all, even in fantasy or joke form, that they would be better off silent because they offer nothing and win nothing for anyone.

Re TALF from my scandals list item 87

Also on December 19, 2008, the Fed announced that it would allow access to its $200 billion Term Asset-backed Securities Loan Facility (TALF) to all investors, including hedge funds, who hold consumer debt instruments. This means that they can dump these instruments on the Fed in exchange for cash. The theory, but unfortunately not the practice, is that these investors will use the money they get to invest in more consumer credit. There is no indication that they will. The inclusion of hedge funds is an especially worrisome sign because there are increasing questions concerning the solvency of these private opaque actors.

mod may not have known that.

Well, you know why no one mentions the military budget. It’s now the third rail. One of the Rs great successes of the past 8 years (builing on a long history, of course).

I wonder if his “solution” for Social Security includes THE fix that would “fix” it for perpetuity? Raise the cap on income subject to SS tax.

Ta-da! Fixed.

As for Medicare: universal healthcare NOT written by and for insurance companies (private insurance/profit motive have NO place in whether or not people get healthcare).

Ta-da! Fixed.

in the titanic ship of state, apparently banks and the MIC are in first class and our seniors are in steerage.

Raising taxes on the top would bring deficits down too ya know.

now, now, you know that’s not being pragmatic /s

“A lot of detail has not come out today.”

The understatement of the day.

Mods probably know a lot of sayings of various types, whether from Marines or Army or whomever.

But there are also a lot of heavily racist, violent,s and sexist saying used by Marines and Army and such.

Just because they are old sayings in the military, doesn’t make them particularly appropriate.

As always, YMMV

thank you for the reminder. i’m lost in the alphabet soup. and it doesn’t help when the language keeps getting changed.

shit pile –> toxic assets –> legacy assets

personally, i like atrios’ best. but i wonder what is next?

good point. thanks.

Homeland security is helping america’s security too

My son was given just such a t-shirt by his marine friend. I just took a quick look, but couldn’t find one online.

Heh. Sherrod Brown sez get off supply side and look at demand side. He should confer with Bennett.

here are the questions i would like to see asked:

has anything like the approach you propose to use ever been used before in a banking crisis? has it ever worked?

have any other approaches ever been used? have any of them ever worked?

Well here’s a bunch of products with the “beatings” slogan. Haven’t found the official marines one yet.

Good Qs.

Undoubtedly the A would be: we’re in uncharted waters.

Geithner said govt can’t do that level of detail. Isn’t that exactly what the govt is doing with AIG, Fannie, Freddie?

follow up questions:

what historical banking crises come closest and what makes our situation different?

…

seriously i can think up a ton of questions that don’t require an economic knowledge.

I would ask him if looking at banks, investors, american citizens; who is the biggest winner and who is the biggest loser from his plan.

great. now we’ve got sherrod using right wing populist rhetoric. we are so fucked.

I’ve seen that slogan on T-shirts sold at Disneyland. No joke.

Geithner just was saying that he will not be micro-managing banks. Another amazing bit of understatement. It doesn’t look like he will be asking them to do squat.

Yep. Takes a moderate command of the obvious. And that would have been the first way I would have searched for the best plan, had I been in charge.

I believe it. It’s a long American tradition.

ah, that’s because the banks are micromanaging geithner.

That’s what my 170 was about. They’re already micromanaging AIG, Fannie, Freddie. IIRC, Bernanke went into a litte detail on that in his testimony.

exactly – especially ones during the last 30 years or so. then i’d try to track down the people involved and ask them what did the learn from the experience and did they have any advice to share. there are different places to look for expertise and shouldn’t we use all of them?

oh wait.

we only talk with team players. why would we talk with a bunch of foreigners when we don’t want to hear from roubini, baker, galbraith, stiglitz, krugman, etc?

i missed bernanke altogether. is it worth going back to?

I’d like Geithner to explain how it is that Sweden handled their banking problem of the same sort (though smaller size) quite handily in the 90s as opposed to the Japanese that did what we are trying to do (NOT nationalize) and…look what they got out of it. They have NEVER recovered (lost decade my ass).

Well, that’s exactly how I learned about terrorism, guerilla warfare, torture. I knew nothing about those subjects in advance, but plenty of others did, so I just learned what was already known. Worked like a charm, and put my knowledge leagues ahead of what I heard from the “experts” who were chosen to speak on TV.

And no, Bernanke is not worth cycling back on.

I thought it was mod snark back there!

Or ask the standard: compare and contrast your program to the Swedish and the Japanese plans.

thanks. don’t know if my blood pressure could cope anyway. will gladly give it a miss.

Must be. *g*

Geithner shorter version: I am going to take a couple trillion dollars of your money and spend it although I don’t really have any idea about how I am going to spend it other than it is going to banks and hedge funds and I’ll make up the reasons later.

Geithner punts on compare & contrast your program to the programs of the 1930s. Merkley should have followed up by asking Geithner to provide a thorough response in writing.

Sounds familiar…like what we were told about TARP 1.

Isn’t there some song that repeats: second verse, same as first?

Dodd whines: we’ve tried sooo hard.

Diapers up.

Safety pins at the ready…

Gees, Diaper Dave has a good one: “I appreciate the efforts at consultation, however I think having a major announcement and a major committee hearing today with the complete lack of detail we have quite frankly was a big mistake. And I think it’s a version of the American people hearing how cataclysmic the crisis is without no solution.”

The best Qs have come from Rs. As I said, they are a real opposition party (as opposed to the Ds), so let’s milk them as much as we can.

Listening to Geithner makes me long for the days when Neel Kashkari honored us with his wisdom and insight.

Geithner is a younger and better looking Paulson.

Speaking of whom, is Kashkari still in charge?

Now I owe you a drink. *g*

Yeh but I don’t buy that he doesn’t have a plan. It looks to me like he does have a plan, probably a fairly specific one, but he can’t say what it is out loud at this point, because of the effects it would have if he were to do so.

Yes, the Democrats have been a disappointment and that the best questions are coming from a Corker and Vitter is just disgusting. Vitter is right though Geithner has been talking for hours and hasn’t said jack, and even has said he isn’t saying jack, and even more that it would be “unfair” for him to say anything about anything.

Welp, Diaper Dave is after all (can we all just stipulate?) an well-established expert in the field of making mistakes.

Senator Mukasey up.

Hah. Schumer said uncharted waters.

he can’t say what it is out loud at this point,

national security.

he owes you a drink. don’t know though if i’d recommend his brand of kool aid.

Schumer is deluded. He said fed govt made money on RTC. To my memory, fed govt lost a couple hundred billion. Now that was less than the worst projections because the govt was able to unload some stuff, but that didn’t make the govt whole.

So anyone struck by the unreality of this? We are teetering on the edge of depression and Geithner has just proposed spending two trillion dollars on a plan that is even shorter than Paulson’s three pager. And these Senators are mostly just yawning. It’s like they are all on drugs.

p.s. i have tried to add a comment at EW’s re the conversation you and prof foland are having re the money market run. but i’m getting database errors. is it just me?

surreal.

reminds me of bush’s going away speech.

Checking

Heh. Kohl asks financial execs to come before the committee to apologize and say how they will change their errant ways. Sounds like they could subpoena the crooks, and should, for precisely that purpose.

OK. I’ve had enough. See you all later.

Yeh but I don’t buy that he doesn’t have a plan. It looks to me like he does have a plan, probably a fairly specific one, but he can’t say what it is out loud at this point, because of the effects it would have if he were to do so.

Well that’s where the kabuki comes in. The housing bubble burst 18 months ago. Bear Stearns went bust in March 2008, 11 months ago, and Geithner was in on that. The financial meltdown hit 5 months ago. And yet in all that time Geithner has not spent any time thinking about what to do and in all that time never came up with a definitive plan. I mean what was he doing all that time?

from the consequences section of wikipedia’s entry on the savings and loan crisis:

From 1986 to 1995, the number of US federally insured savings and loans in the United States declined from 3,234 to 1,645.[8] This was primarily, but not exclusively, due to unsound real estate lending.[15]

The market share of S&Ls for single family mortgage loans went from 53% in 1975 to 30% in 1990.[2] U.S. General Accounting Office estimated cost of the crisis to around USD $160.1 billion, about $124.6 billion of which was directly paid for by the U.S. government from 1986 to 1996.[1] That figure does not include thrift insurance funds used before 1986 or after 1996. It also does not include state run thrift insurance funds or state bailouts.

The U.S. government ultimately appropriated 105 billion dollars to resolve the crisis. After banks repaid loans through various procedures, there was a net loss to taxpayers of approximately $124 billion dollars by the end of 1999.[16]

my bold.

later.

Jack Welch whom I greatly respect blah, blah, blah. Why am I supposed to pay attention to a corporate pirate like the former head of GE? Does anyone think he has any interest in the needs of ordinary Americans?

I mean what was he doing all that time?

stealing us blind?

i’m sure he’s been working very very hard.

Agreed. It’s surreal. They’re just saying the same thing over and over again — nothing.

Again it takes a Republican to bring up Geithner’s role has a regulator at the New York Fed. Geithner completely missed all this but he is saying what he did prevented worse from happening. What could be worse than a financial collapse pushing the country toward depression? He did nothing. And then says I did not do enough. Just one incredible understatement.

geithner: i worked very hard and took a lot of important initiatives to make the system more resilient and they were successful but not good enough.

me: what inititiatives were those?

do our senators not listen to the answers? can they not think up their own follow up questions? or are they just reading a script written by one of their aides?

another “uncharter waters”

i’m sure he’s been working very very hard.

Well that’s what he just said. I wish someone would ask him specifically what he did. I mean specific items. Otherwise it just sounds like Bush: It’s hard.

Owe you a drink. But it such an obvious follow up and they just let it go.

I mean what was he doing all that time?

see my 221 – now you owe me a drink. *g*

now we’re even.

Interesting that Senators act like the Treasury and the Fed are essentially the same. TALF is a Fed program as are the other lending facilities. Sort of brings it around that if they are going to be treated as identical then why does the Fed remain private.

Guidelines and platitudes. Another Republican nails it. Could the Democrats be any more useless?

Q: this is not a criticism, just an observation. we’ve been here 3 hours and 32 minutes and we still don’t know how we’re going to solve this problem. today we’ve lost about a trillion dollars. just some guide lines and platitudes.

A: blah, blah, blah. principles. blah, blah, blah. hard to solve. comprehensive approach. blah, blah, blah.

Could the Democrats be any more useless?

ecahn’s not here, so i’ll say it: too stupid to live.

After Geithner spews a bunch of guidelines and platitudes, the Republican Senator says I rest my case.

We’re going to need a well-stocked bar.

he does have a plan, probably a fairly specific one, but he can’t say what it is out loud at this point, because of the effects it would have if he were to do so.

This is the key. Everything he has said today has been avoidance. Kabuki, as Hugh said.
Trying to hold out some hope that it’s a good plan he’s refusing to talk about…

corker again (at least i think that’s what the c-span announcer just said)

Ah, it’s Corker again, a crazy nutter asking better questions than all of the Democrats together.

yep. to both.

dodd whining about the number of meetings they have had to attend on this matter.

Dodd now recounting how many useless hearings he has presided over.

dodd can bite me.

Dodd just saying how he has been on this for 2 years but now the window is closing and they have to move. Well if he has been on it for 2 years why is there still no plan, not a half assed back of the envelope kind of plan, but a real fleshed out one?

More succinct than my #239 but it expresses my sentiment as well.

After listening to Geithner today for what felt like longer than the age of the universe and reading his speech, all I can say is that we remain firmly on track for depression.

Phew, finally it ends.

Wait a minute — Where is the outrage?

amazing job of live blogging by jane at the top of the thread.

my thanks to all.

i feel pretty depressed already.

oh, wait. that’s not exactly what you meant.

Exhausting. Thanks for sticking it out.

seriously – thanks again for the thread. this reminds me of the run up to the iraq war, except bigger and fewer people wanting to take some action. history in the making. just wish i could be organizing buses to nyc and dc or something more than just bearing witness.

now off to list the rest of the week’s hearings…

Yes, thanks for the liveblogging. This was important. Depressing but important.

An emerging consensus among the DFHs!

With no government involvement (interference/help) the banking system and the economy would’ve crashed to zero when the housing market crashed. Why? Because banks couldn’t loan to anybody who held bad mortgages and our economy depends very much on bank loans.

What would fix that situation? It would require firms holding toxic assets to permanently write them down, as per mark-to-market. Could they have done that without going bankrupt? Nobody knows for certain. As Geithner says, nobody knows the balance sheets of these firms. For certain they weren’t going to unilaterally write down assets and perhaps find their competitors surviving at full value. That WASN’T going to happen. So, what was their remaining choice? They had to just hold on for dear life; waiting for homes to foreclose or for government intervention. Some probably had/have Credit Default “insurance” to cover the foreclosure scenario. They weren’t/aren’t planning to lose a penny no matter what it does to the economy in the mean time.

The effect on the economy is a shut-down with everyone losing jobs and feeling the pain the stupid Wall Street firms brought on by valuing those bad mortgage assets at AAA value.

Now the housing market has crashed down so far that even regular mortgages have gone under water.

What can fix things now?

If Wall Street is allowed to drag this out forever, then we all go down if along the way the toxic assets aren’t gotten rid of or fixed (somehow). That requires some government involvement. Geithner appears to be trying to find the plan which will get the job done with the least government financial involvement — admirable if it works.

My question about this plan is whether it’s sufficiently forceful.

Remember a key issue about the stimulus bill is whether tax cuts are really stimulative since they don’t force people to spend their money. If you have a plan whereby private capital (don’tcha just love that euphemism for ‘rich folk’?) will buy toxic assets then we have to wonder if they will. If the government does it we know it will get done. Geithner is apparently making them an offer they can’t (hardly) refuse by guaranteeing no downside to buying the toxic assets. That’s going to push a lot of losses onto the public, but save us from having to ante up money to buy the assets (and put them into a bad bank).

Will the cost of this debacle be distributed sufficiently to Wall Street or will the public bear the brunt of it? I hope someone questions Geithner on this when they get into the details.

I also hope they ask him about Credit Default Swaps & how they come into play in his plan and how the mortgages might be fixed (or refinanced) in his plan (especially since they would remain in the hands of private firms).

Wall Street is not very impressed though

It’s possible they like the idea of buying the toxic assets with a guarantee of no losses. That would make their investments a lot safer than the stock market and still potentially quite valuable.

What’s a bit question mark in making that choice is whether the mortgage problem will get sorted out favorably before the economy starts and those stocks appreciate in value.

I hate it when it takes a Republican to ask a straightforward question.

There’s a bit more to it than appears. Part of the politics of the ’90s when Clinton let some of this ‘liberalization’ go through was that Clinton got Wall Street to play pay to play. Now Corker wants someone to reveal that in public to embarass Democrats. Of course Corker is just a sneering little turd, but he did have the smarts to have someone else do his dirty work (to ask the good question).

Things are different now. We may get a lot of political money from Wall Street, but we also have the Internet. Obama can handle the financial industry more objectively, though there’s no real reason to pummel them just because they were stupid. Republicans want to spit in everybody’s drinks and laugh about it. Democrats just need to solve problems equitably.

The government could value the assets and the instruments based on them tomorrow. It doesn’t because this would show the banks were insolvent. — Hugh

ding, ding, ding!!!

It’s nice to be right, but that doesn’t really solve the problem. There’s inconclusive evidence these banks were criminal and there’s no reason we should simply say they’re insolvent and shut ‘em down. That would be unfair and bad for the economy.

A better solution is to help them get rid of the toxic assets and keep loaning money.

Just switched over to cnbc. Anchors all cross talking about how much value there is in these assets. People lining up to buy (predator funds), but banks won’t sell because of what it would do to their capital ratios.

Curious, I thought banks had ‘em marked down and used new government capital to refresh their reserves. Is it that the banks now like the government guarantees on the toxic assets? Maybe Geithner sweetened the deal just a bit too much. Or maybe he needs to force Banks with toxic assets to sell when there’s a private buyer — force them out of the banks.