Treasury Plan = bubble redux (updated)

Community (This content is not subject to review by Daily Kos staff prior to publication.)

Saturday March 21, 2009 · 5:39 PM PDT

2009/03/21 · 17:39

On the 17th, I posted a diary about the Treasury's Troubled Asset-Based Loan Facility (TALF) asking the question: , "Isn't the way they're structuring this just a repetition of the same practices that got us into this whole mess to begin with?

Krugman's blog post entitled "Despair over financial policy" answers my question and Krugman does indeed sound in despair. He observes:

"The Obama administration is now completely wedded to the idea that there’s nothing fundamentally wrong with the financial system — that what we’re facing is the equivalent of a run on an essentially sound bank. As Tim Duy put it, there are no bad assets, only misunderstood assets. And if we get investors to understand that toxic waste is really, truly worth much more than anyone is willing to pay for it, all our problems will be solved." http://krugman.blogs.nytimes.com/...

Kossacks have echoed these concerns in numerous postings and comments. Does anyone have constructive ideas on how to get the ear of the Administration? I confess I don't, but wiser heads than mine are blogging here.

Liyamei

Community (This content is not subject to review by Daily Kos staff prior to publication.)

Tuesday March 17, 2009 · 8:18 AM PDT

2009/03/17 · 08:18

Today I read and then re-read a seemingly innocuous story in the WSJ about the delays in getting the Treasury's Term Asset-Backed Loan facility launched: http://online.wsj.com/...

You remember the TALF - the program announced by Paulson last fall that was going to get the credit market for asset-backed securities in student loans, credit cards, automotive loans going again so that companies could get operating capital and lenders could have funds available to loan to potential customers/borrowers?

Then I read closer and wondered, "Isn't the way they're structuring this just a repetition of the same practices that got us into this whole mess to begin with?

Maybe I'm missing something, but after reading bebswern's recent diaries on this subject, I tend to think he's onto something: http://www.dailykos.com/...

Poll

10 votes Show Results

Is the TALF as restructured

10 votes Vote Now!

Is the TALF as restructured

A well-conceived tool for restarting credit markets?

1 vote

A potentially useful short-term mechanism for loosening credit?

1 vote

A foolishly considered and short-sighted approach?

6 votes

2 votes

Why a 'bad bank' instead of using the Swedish model?

Liyamei

Community (This content is not subject to review by Daily Kos staff prior to publication.)

Saturday January 31, 2009 · 12:30 AM PST

2009/01/31 · 00:30

Setrak has posted about the anticipated 'Big Bang' that the Treasury Department will announce next week and it references the idea of a 'bad bank' that will purchase the bad assets from US banks as part of the effort to make them solvent: http://www.dailykos.com/...

The problem with the bad bank approach however, is that it leaves the share structure of the mismanaged banks intact and as such, leaves management intact. Where's accountability? Why shouldn't the shareholders take the risk of their investment's failure? And, why isn't the Swedish model for bank failure being pursued?

Update: Max Holmes proposes a hybrid model: http://www.nytimes.com/...

Poll

0 votes Show Results

In rescuing a banking system tottering on insovency, the Treasury Department should:

0 votes Vote Now!

In rescuing a banking system tottering on insovency, the Treasury Department should:

Use the single 'bad' bank approach currently being talked about by the Department?

0 votes

Follow the Swedish model of injecting equity to recapitalize the banks, but without use of a 'bad bank'?

0 votes

Use a hybrid as proposed by Holmes: rescue the four largest with bad banks for each and warrants (equity) for the government?

0 votes

Expat seeking perspective

Liyamei

Community (This content is not subject to review by Daily Kos staff prior to publication.)

Monday January 12, 2009 · 8:35 PM PST

2009/01/12 · 20:35

A baffled American living overseas seeks insight from dK readers.

By way of background, I'm an American expat, living in China since 2004. Fury, anger, outrage are all emotions I'm experiencing at the boldness and lack of shame shown by the outgoing Bush Administration at how their (mis)management of our country has turned out. But where is the outrage on the street about these issues? Good for people protesting about Oscar Grant and the Israel/Gaza war - those are important matters, but where is a protest about Bush and the condition his administration has left us in? Today I read that Bush is planning a 15 minute farewell address on primetime television on Thursday. Can't we make a publicly visible statement somehow about how we feel about him and his administration?

RSS

Treasury Plan = bubble redux (updated)

TALF = Bubble Redux?

Why a 'bad bank' instead of using the Swedish model?

Expat seeking perspective