Bloomberg is reporting that Timothy Geithner, looks like he is flexing his new found power and "May" be trying to push Sheila Bair out as head of the FDIC.
Yes she is a R, but she has been the lone voice on behalf of the homeowners. She has proven that her system works after rthe FDIC took over IndyMac and she successfully modified 5500 mortgages. In a recent interview with Lisa Myers of NBC news, she stated that about half the foreclosures could be avoided for around 24-40 billion should the program go national.
It's been met with resistance by Paulson who for some reason insists on printing money to pour into the Black hole , formerly referred to as banks.
This is not the time to take the one person who actually has taken a pragmatic approach to this crisis by attacking the problem at the source. As BondDad's diary today suggested, no one is really certain what will work. That is true. But we also have a fairly good idea that one single approach is not going to solve the problem.
The way Ms Bair has attacked this problem has been impressive. They work with the mortgage until it's no more than 34% of take home pay and I beleive that includes property taxes and insurance.
She has lowered rates to 3% for a period of five years among a myriad of other solutions which would be negotiable if we were still struggling. My opinion, for what it's worth , is that property that's in good condition will ultimately find a bottom and rebound. They may be underwater now, but try going out and getting a decent rental when you have been foreclosed on.
Why would Geithner want to push her out?
Geithner, president of the Federal Reserve Bank of New York, has argued Bair isn't a team player and is too focused on protecting her agency rather than the financial system as a whole, according to two congressional officials and a person familiar with his thinking. Bair has battled with Geithner and fellow regulators over aid to Citigroup Inc. and other emergency actions, making her enemies in the Bush administration.
That makes me ask WTF is this guy doing? We have long complained that these solutions have been very sluggish ( to put it mildly) in helping at the source of the problem. The effects of foreclosures on the neighborhoods and home values have been discussed at length.
Now let put my tin hat on here for a second: There is a lot of money that has been bet, using credit default swaps, that these mortgages would fail. I imagine Ms. Bair has upset the powers on Wall Street, of which our tax money is going to pay off the side bets. Should her program be enacted and has the success rate she projects, a lot of bettors are going to come up snake eyes and we all know the fall out from that. If you and I bet the wrong way, we lose. But not in this new world we live in. If your connected you are a winner.
Not only that Ms. Bair has pushed for a rule , she just may get, that will force the banks to unravel their derivative liabilities. We need her in this job. Then we need to form a team around her so she is no longer the sole voice of reason on this "Financial Krakatoa".
My suggestion is write to your Senator(s) especially the R's and ask that they take a second look at Geitner as a Treasury appointee. Giving President Elect Obama the benefit of the doubt, it's possible he may have listened to the wrong people on this.
Lets not let this one go silently in the night. Here's woman brave enough to stand up to Power. Lets not let her Party affiliation get in the way of doing the right thing.
I 've always believed that a significant majority of the people in the world are assholes without regard to nationality, race, religion sex or political party. Ms. Bair doesn't fall in that category.
Update:
Strange- someone calling for some help...
Bernanke urges more action on foreclosures
Adverse costs for homeowners, lenders, economy, Fed chief warns
WASHINGTON - Federal Reserve Chairman Ben Bernanke called on the government Thursday to ramp up efforts to stem soaring home foreclosures, which are feeding into the country’s deep economic troubles.
Possible team player problem?