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Prolems past & future

Discussion in 'The Economy' started by Tropo, 26th Nov, 2008.

  1. Tropo

    Tropo Well-Known Member

    17th Aug, 2005
    Prolems past & future

    On Wall Street, Geithner is known as a highly competent technocrat, well versed in the financial complexities. But he has also been seen as a weak and compliant regulator of Wall Street firms, someone who did not seem the storm coming.
    Occasionally, Geithner would anguish publicly about the accumulating time bombs like credit derivatives and urge bankers to do something, but he did not use his supervisory powers to compel action. In bailout negotiations with Wall Street titans, Geithner and the Federal Reserve were spun around like a top more than once.

    No wonder the stock markets rallied explosively when they heard Geithner would be their new boss in Washington. They think he is their guy. Summers may be a brilliant economist--everyone says so--but he, too, is a club member in good standing and now manages a huge hedge fund while he advises Obama. The president-elect needs to get a "second opinion"--someone from outside the financial club who can explain the flaws in the rescue strategy preached by Bush's treasury secretary Henry Paulson and Tim Geithner at the New York Fed.

    Their approach has clearly been designed to preserve what's left of the Wall Street establishment and maintain the supremacy of the largest financial firms while the taxpayers pick up their losses.
    That model has failed and too many smart people know why. The bailouts have been too little too late and aimed at an impossible objective--persuading private capital investors to believe in the phony assurances proffered by the bankers. AIG, the insurance giant taken over by the feds, has turned into a bloody hemorrhage.
    Citigroup will be another and may soon be joined by other major banks demanding the same favorable terms. Wasting more public money on insolvent mastodons is the least of it. The real scandal is it doesn't work.
    It can't work because the black hole is too large even for Washington to fill. Government should take over the failing institutions or force them into bankruptcy, break them up and sell them off or mercifully relieve everyone, including the taxpayers.

    Stock markets rallied again with the salvage of Citigroup. But not everyone in Wall Street was cheering. Christopher Whalen of Institutional Risk Analytics, the bank monitoring firm that has repeatedly been right about the banks when the government officials were wrong, had harsh words for the deal.
    "Pretending that Citi is going to be a going concern I think is silly," Whalen said.
    "We should be thinking about breaking this company up and redistributing the assets into stronger hands."
  2. Mark Laszczuk

    Mark Laszczuk Well-Known Member

    16th Aug, 2005
    I've copped a bit of flak over at SS - I even got accused of being a racist for the first time in my life - for daring to point out that Osama is just another politician who is only interested in looking after his rich mates while everyone else was waxing lyrical about how he's gonna change everything and how wonderful and black he is and what a big step the U.S. has taken in race relations (lol).

    This article shows that I was right as far as I am concerned. You were right Wacko Jacko - it doesn't matter if you're black or white - the only colour that matters is green.

  3. Cherry Pro

    Cherry Pro Active Member

    18th Jul, 2007
    Sydney, NSW
    Now listen up first heard it on Invested ...Osama ...has joined US

    Now, don't call me racist (I'm brown) but someone asked whether the
    "White" House was going to have a name change as well !

    Last edited by a moderator: 26th Nov, 2008