| The Daily Show With Jon Stewart | M - Th 11p / 10c | |||
| Elizabeth Warren Pt. 1 | ||||
| ||||
Congress created the Congressional Oversight Committee to oversee the Treasury’s management of the TARP program. The Panel, under its chair, Elizabeth Warren, is doing its job. Here’s an example, complete with a lecture:
Treasury has not explained its assumption that the proper values for these assets are their book values – in the case, for example, of land or whole mortgages – and more than their “mark-to-market” value in the case of ABSs, CDOs, and like securities; if values fall below those floors, the banks involved may be insolvent in any event. Treasury has also failed to explain its assumptions about the economic events that would cause investors to default or how long it believes assets will have to be held to produce a reasonable return for private investors. Without non-subsidized buyers, market functioning is an illusion.
Treasury also hasn’t explained why it thinks this is a liquidity crisis, and not a solvency crisis. Not only that, it doesn’t have the information necessary to make that call: granular information about the loans and mortgages that make up the securitized pools we now call toxic waste. The Warren Report suggests that without saying it. Since Treasury is fixated on its current path, Warren explains the alternatives.
We have looked at two, conservatorship and receivership. Warren explains a third, subsidization. The government provides a loan, a guarantee or an investment into the sick bank, or the purchase of the toxic assets from the bank at a high price, or some combination. This assistance usually moves through the bank holding company to the sick bank. Before it is made available, the bank holding company will have exhausted most of its assets, so flowing the money through it increases the risk of loss to taxpayers. That is what has happened so far.
The analysis is detailed, but open-ended. Following bureaucratic procedure, the Panel leaves it to Treasury to find the facts and then figure out the best strategy to protect the public from the failures of the financial elites.
It’s no surprise that John Sununu, a Republican, and Richard Neiman, the New York Superintendent of Banks and former CEO of TD Bank, a subsidiary of Toronto-Dominion Bank, loathe the whole transparency thing that Warren thinks is very important:
These issues are complex, however, and the Panel did not reach an agreement on either the economic assumptions underlying strategic choices or on the optimal strategy to pursue. Further, we are concerned that the prominence of alternate approaches presented in the report, particularly reorganization through nationalization, could incorrectly imply both that the banking system is insolvent and that the new Administration does not have a workable plan. The stakes for the American people are too high to permit any such misapprehensions to develop and intrude on successful outcomes that affect our national financial security.
… Speculation on alternatives runs the risk of distracting our energy from implementation of a viable plan and needlessly eroding market confidence. Market prices are being partially subjected to a downward self-reinforcing cycle that could be exacerbated by unwarranted consideration of more radical solutions such as nationalization.
Sununu and Neiman have faith that the real problem is confidence in our financial elites, both in and out of government. Sorry boys, the confidence train left the station with trillions of dollars of other people’s retirement money on it. One essential step to restoration of confidence is in-your-face evidence that the financial muggers have been purged and punished and shorn of their plunder.
Congress has done nothing with Warren’s reports. Those hearings full of outrage and bombast were pointless and useless, except for the YouTube clips. It’s hard to investigate during the day when you spend the evenings sucking cash from your targets. Warren can’t do this by herself. Maybe someone in Congress could stop posturing, read her reports, and act in the public interest. I’m sure Warren and her staff will help.
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zed
HuffPo has a post by Richard Nieman asking for public input for his questions of Timothy Geithner at tomorrow’s hearing. Here’s mine:
feature, not a bug.
the hearings have been and still are imo designed to be pointless and useless, other than for youtube clips.
i’m not just making this up, it’s my conclusion after listening to hundreds of hours of hearings over the past couple of years.
the youtubes of elizabeth on jon stewart’s show are sooooo good.
Surely you jest.
Yeah, I know, don’t call you Surely.
I thought we temporarily booted Digg to the curb.
Sununu and Neiman: Clap Harder!
I STILL have no answer WHY funds aren’t simply provided for the purpose of LOANS only, that the bank makes a simple commission for brokering the transaction
there is NO reason we’re subsidizing ANYTHING they’ve gambled with, they want to make the profit WE set they lend the money at the commision WE tell them, and if they refuse to lend that money we DECERTIFY them as banks, seize their banking assets, send them on their way to have their fun in las vegas, auction those assets to actual BANKERS
Soooo, how do these 2 bozos know that the banking system isn’t insolvent. The term “workable plan” can be defined in many ways. Workable for whom? would be my first question.
Secret laws, secret banking, secret immunity from prosecution.
I’m amazed we got all those pictures of the dog last week.
I kinda wish there were more accountants in Congress.
Although I’d like them to be a cut above the ones at the banks.
The banks hired all the ex-Arthur Anderson accountants. Experience with Enron is a plus.
they have a secret dog, we saw the one that wasn’t secret
you didn’t know this?
It’s a photoshopped dog.
A quick look at the bios of Congress critters makes it pretty obvious pretty quickly that they’re hardly representative representation.
I wonder if any divergence of the background of a Congressman compared to the demographic of their state/district is traceable over time.
No one has DUGG this post so seems we have until they decide to stop co-opting the Lake and taking all their traffic! The Lake does get paid based on how many visit and see the ads displayed and if DIGG keeps the traffic at their website the Lake loses revenue… So no DIGGing until they stop!
it works the same for digg? if they keep the traffic their website earns $ from the visits?
fyi, Movie night upstairs.
Ho shit, I got the audio from a bunch of teebee programs on my machine. Commercials overtalking each other. Weird. Clicked off the tab and came back. Voila. All gone.
Thanks, Masaccio
Unfortunately, Elizabeth Warren won’t save us
It’s clear now that, Warren’s intelligence & integrity notwithstanding, the important questions leading to fundamental reform & restoring the Constitution will never be asked because answered truthfully, they would mortally threaten the oligarchy of political power & financial interests in control of the system.
If there was any question how this was going to play out, Obama’s very first appointment of Rahm Emmanuel was the writing on the wall.
The just released OLC torture memos show the depths to which this nation has descended during Cheney’s reign of terror. We have a war criminal sitting on the federal 9th circuit bench rather than in prison for life. Karl Rove, Newt Gingrich & Rush Limbaugh speak through a complicit media with the statesman-like authority in opposition to anything Obama proposes. Southern Methodist University has won the honor of hosting the G. W. Bush Center for Revisionist History & War Criminal Reputation Rehabilitation.
We have huge financial corporations reporting massive first quarter profits while they’ve received billions to shore up their capital bases, foisted billions in worthless defaulted assets on the Treasury, borrowed billions more at virtually zero interest from the Fed while lending out more than a trillion at 15% to 30% on revolving credit card debt, and have been granted special accounting rule changes making it easier to falsify their real financial condition. And soon, we will be treated to another kabuki dance of stress test manipulation vindicating the last ten years’ and next four years of failed policies.
With the deck stacked so egregiously in favor Goldman Sachs, JP Morgan/Chase, Citi, B of A, Wells Fargo, etal. at the expense of another ten trillion in federal debt and the savaging of our Main Street economy, even I could make a billion dollars a quarter with 40 to 1 leverage on my invested capital under these loser take all conditions.
Focusing exclusively on the “confidence thing” is also Summers and Geithner’s thing, too.
it’s all a “con game” anyway.
I thought the bolded language in the Sununu quote sounded like it was straight from the Bush Terror Playbook.