The Treasury Dept. IG seems to think it has created the potential for an even greater financial disaster than if TARP had never been enacted.
"The Troubled Assets Relief Program, known as TARP, has not addressed the problems that led to the last crisis and in some case those problems have festered and are a bigger threat than before, warned Neil Barofsky, the special inspector general at the Treasury Department."
Full Story:
http://www.foxnews.com/politics/2010/01/...ated-risk/
valid questions about not regulating banks.
the thread on Volcker has as simple answer: set up an agency that will liquidate failed institutions in an orderly manner. the government will not rescue your company nor your job. you will be fired and your companty sold. all stockholders and creditors will lose their entire inverstment. end of story
(01-31-2010 06:16 PM)Stampeding Terp Wrote: [ -> ]The Treasury Dept. IG seems to think it has created the potential for an even greater financial disaster than if TARP had never been enacted.
"The Troubled Assets Relief Program, known as TARP, has not addressed the problems that led to the last crisis and in some case those problems have festered and are a bigger threat than before, warned Neil Barofsky, the special inspector general at the Treasury Department."
Full Story: http://www.foxnews.com/politics/2010/01/...ated-risk/
Absent TARP, we'd probably be in a Depression right now. The purpose of TARP was to avoid one and it appears to have worked. It is therefore difficult to argue that we'd be better off had it never been enacted.
The problem of moral hazard, however, is a big one and nothing, as yet, has been done to address it.
(01-31-2010 07:00 PM)Byrdy Wrote: [ -> ] (01-31-2010 06:16 PM)Stampeding Terp Wrote: [ -> ]The Treasury Dept. IG seems to think it has created the potential for an even greater financial disaster than if TARP had never been enacted.
"The Troubled Assets Relief Program, known as TARP, has not addressed the problems that led to the last crisis and in some case those problems have festered and are a bigger threat than before, warned Neil Barofsky, the special inspector general at the Treasury Department."
Full Story: http://www.foxnews.com/politics/2010/01/...ated-risk/
Absent TARP, we'd probably be in a Depression right now. The purpose of TARP was to avoid one and it appears to have worked. It is therefore difficult to argue that we'd be better off had it never been enacted.
The problem of moral hazard, however, is a big one and nothing, as yet, has been done to address it.
+1. That's it in a nutshell. We are hurting now, but absent TARP, it would be 1931 all over again. It does really piss me off that many of those responsible for creating the economic disaster personally walked away with millions and then benefited from TARP.
No one knows whether it made things better or worse. The system should be such that we're never at risk of the nation being held hostage by the misdeeds of a relatively few individuals. That's the farthest thing from what we have now.
(01-31-2010 08:27 PM)PackLTBuy Wrote: [ -> ]No one knows whether it made things better or worse. The system should be such that we're never at risk of the nation being held hostage by the misdeeds of a relatively few individuals. That's the farthest thing from what we have now.
You really think that a collapse of the banking system in the U.S. would not have made things worse? Do you remember the panic back then when banks, investment houses, and AIG were going under or teetering on the edge? It would have been a freaking nightmare!
Washington's failure to enact new financial reforms is leaving us at great risk. This is Barofsky's one and only message here.
(01-31-2010 08:37 PM)TimTerpT Wrote: [ -> ] (01-31-2010 08:27 PM)PackLTBuy Wrote: [ -> ]No one knows whether it made things better or worse. The system should be such that we're never at risk of the nation being held hostage by the misdeeds of a relatively few individuals. That's the farthest thing from what we have now.
You really think that a collapse of the banking system in the U.S. would not have made things worse? Do you remember the panic back then when banks, investment houses, and AIG were going under or teetering on the edge? It would have been a freaking nightmare!
Do you think the banks used the bailout money to the best advantage for the country? That doesn't seem to be the consensus, especially where AIG is concerned. The question also has to be asked why Ford stayed solvent while GM and Chrysler foundered. Are we any better off for having bailed the latter two out than we were? Will they ever again make a profit and repay the taxpayer... with interest?
(01-31-2010 08:27 PM)PackLTBuy Wrote: [ -> ]No one knows whether it made things better or worse. The system should be such that we're never at risk of the nation being held hostage by the misdeeds of a relatively few individuals. That's the farthest thing from what we have now.
I haven't heard a credible source disagree that we had to do it. but that's not to say the penalty couldn't have been far more severe, such as Volcker proposes in the article on another thread. the entiee top of the companies should be gone. Buffet even suggests that there be claw back provisions to take back prior bonues if the company coincidently turns up broke a year later
I think there's too much heat that we won't have soem reform. what we need to watch is Republicans in control of either the White House or congress. they legislate to let foxes in the henhouse
My sister and her husband are trying to buy a house. They are paying $25k less than the appraisal and their loan has been approved. However they can't seem to locate someone to underwrite the loan. Crazy.
IMO TARP was intended to address the liquidity problems in the market. But many of the funds were used for other purposes. People with good credit are not getting loans. This problem is slowing the recovery.
^yup, our government should focus more on lending to sound individual borrowers instead of propping up banks that are just sitting on the money.
if you're a "conservative", reread that sentence five times and watch for the word in bold
(01-31-2010 09:14 PM)Stampeding Terp Wrote: [ -> ] (01-31-2010 08:37 PM)TimTerpT Wrote: [ -> ] (01-31-2010 08:27 PM)PackLTBuy Wrote: [ -> ]No one knows whether it made things better or worse. The system should be such that we're never at risk of the nation being held hostage by the misdeeds of a relatively few individuals. That's the farthest thing from what we have now.
You really think that a collapse of the banking system in the U.S. would not have made things worse? Do you remember the panic back then when banks, investment houses, and AIG were going under or teetering on the edge? It would have been a freaking nightmare!
Do you think the banks used the bailout money to the best advantage for the country? That doesn't seem to be the consensus, especially where AIG is concerned. The question also has to be asked why Ford stayed solvent while GM and Chrysler foundered. Are we any better off for having bailed the latter two out than we were? Will they ever again make a profit and repay the taxpayer... with interest?
Ford was in favor of the bailout. They feared being killed if their competitors went under and then took their suppliers with them. Did you really want to see the American car industry go under? Many Republicans advocated exactly that, partly because of their hatred of unions. Many of the banks have already repaid the loans. GM has promised to do the same by june. The Tarp money was money well spent, despite the bankers refusal to free up enough loan money. Without TARP, NO ONE would be lending now.
As I have pointed out on another thread, the economic situation is dire. But, no matter how bad things are (or will get) it's not going to get as bad as things would have been in a full blown depression.
Bernanke understood that one of the reasons the Depression of the 1930's happened was because the government let the banks fail. He wasn't going to let that happen a second time.
If you want to argue about whether TARP was a good investment or not you are missing the point.
(01-31-2010 09:38 PM)Supersport Wrote: [ -> ]What we need to watch is Republicans in control of either the White House or congress. they legislate to let foxes in the henhouse
Why are you trying to turn this into a Republican bash? Congress has been under the control of Democrats for three years now and what can you point to that shows they understand the problem, much less have an answer for it?
An entire YEAR has been wasted in an effort to ram through a health care bill while the economy and jobs have been relegated to the "disregard" drawer by both the White House and Congress. Throwing out the "evil Republicans" smoke screen does nothing worthwhile. Do you have a real answer?
(01-31-2010 10:04 PM)TimTerpT Wrote: [ -> ] (01-31-2010 09:14 PM)Stampeding Terp Wrote: [ -> ] (01-31-2010 08:37 PM)TimTerpT Wrote: [ -> ] (01-31-2010 08:27 PM)PackLTBuy Wrote: [ -> ]No one knows whether it made things better or worse. The system should be such that we're never at risk of the nation being held hostage by the misdeeds of a relatively few individuals. That's the farthest thing from what we have now.
You really think that a collapse of the banking system in the U.S. would not have made things worse? Do you remember the panic back then when banks, investment houses, and AIG were going under or teetering on the edge? It would have been a freaking nightmare!
Do you think the banks used the bailout money to the best advantage for the country? That doesn't seem to be the consensus, especially where AIG is concerned. The question also has to be asked why Ford stayed solvent while GM and Chrysler foundered. Are we any better off for having bailed the latter two out than we were? Will they ever again make a profit and repay the taxpayer... with interest?
Ford was in favor of the bailout. They feared being killed if their competitors went under and then took their suppliers with them. Did you really want to see the American car industry go under? Many Republicans advocated exactly that, partly because of their hatred of unions. Many of the banks have already repaid the loans. GM has promised to do the same by june. The Tarp money was money well spent, despite the bankers refusal to free up enough loan money. Without TARP, NO ONE would be lending now.
None of which answers the questions I asked. Do you want to bet that GM repays the loans in full by the end of June? I have little faith that they'll pay even part of it back. If they manage to pull it off, will they become an independent company once again or will the government still own them? As for loans, I read a lot of complaints about people with excellent credit being denied. Things aren't rosy yet and recovery should be the priority of Congress. However, taking the time to get it right with the help of the right people should be the plan.... not some patchwork of jack-leg legislators gone wild and tons of pork earmarks.
(01-31-2010 10:58 PM)Stampeding Terp Wrote: [ -> ] (01-31-2010 10:04 PM)TimTerpT Wrote: [ -> ] (01-31-2010 09:14 PM)Stampeding Terp Wrote: [ -> ] (01-31-2010 08:37 PM)TimTerpT Wrote: [ -> ] (01-31-2010 08:27 PM)PackLTBuy Wrote: [ -> ]No one knows whether it made things better or worse. The system should be such that we're never at risk of the nation being held hostage by the misdeeds of a relatively few individuals. That's the farthest thing from what we have now.
You really think that a collapse of the banking system in the U.S. would not have made things worse? Do you remember the panic back then when banks, investment houses, and AIG were going under or teetering on the edge? It would have been a freaking nightmare!
Do you think the banks used the bailout money to the best advantage for the country? That doesn't seem to be the consensus, especially where AIG is concerned. The question also has to be asked why Ford stayed solvent while GM and Chrysler foundered. Are we any better off for having bailed the latter two out than we were? Will they ever again make a profit and repay the taxpayer... with interest?
Ford was in favor of the bailout. They feared being killed if their competitors went under and then took their suppliers with them. Did you really want to see the American car industry go under? Many Republicans advocated exactly that, partly because of their hatred of unions. Many of the banks have already repaid the loans. GM has promised to do the same by june. The Tarp money was money well spent, despite the bankers refusal to free up enough loan money. Without TARP, NO ONE would be lending now.
None of which answers the questions I asked. Do you want to bet that GM repays the loans in full by the end of June? I have little faith that they'll pay even part of it back. If they manage to pull it off, will they become an independent company once again or will the government still own them? As for loans, I read a lot of complaints about people with excellent credit being denied. Things aren't rosy yet and recovery should be the priority of Congress. However, taking the time to get it right with the help of the right people should be the plan.... not some patchwork of jack-leg legislators gone wild and tons of pork earmarks.
It would have been lunacy to let Detroit go under with 15 million people akready unemployed. I couldn't be happier with the bailout and I drive Hondas.
"General Motors maintained its pledge to repay billions of dollars to the U.S. and Canadian governments by June and said Ed Whitacre will stay on as chairman and chief executive.
Whitacre, a former AT&T chairman and CEO, took the top spot on an interim basis on Dec. 1, when the board asked Fritz Henderson to step down. Speaking at a press conference at GM’s headquarters in Detroit, Whitacre said he was honoured to accept the board’s invitation to remain as CEO.
"We've made significant progress in the past couple of months, so much so that I can confirm with certainty that we will pay back in full the U.S. Treasury and Canadian and Ontario government loans by June," Whitacre said. "This represents a significant milestone in our journey back to being a profitable and viable company."
Tim, I hope Mr. Whitacre is correct and the loans are fully paid by June.
Of possibly greater importance is the housing market, especially new construction. There isn't a man, woman or child in this country who isn't impacted by the state of the housing market. No other industry effects as many people as it does and we need a robust housing market if the economy and jobs are to turn around.
(01-31-2010 11:17 PM)Stampeding Terp Wrote: [ -> ]Tim, I hope Mr. Whitacre is correct and the loans are fully paid by June.
Of possibly greater importance is the housing market, especially new construction. There isn't a man, woman or child in this country who isn't impacted by the state of the housing market. No other industry effects as many people as it does and we need a robust housing market if the economy and jobs are to turn around.
We can agree on that. I'm pessimist that we will EVER recover, in my lifetime, from the effects of globalization and the continued loss of millions of quality jobs.
(01-31-2010 10:44 PM)Stampeding Terp Wrote: [ -> ] (01-31-2010 09:38 PM)Supersport Wrote: [ -> ]What we need to watch is Republicans in control of either the White House or congress. they legislate to let foxes in the henhouse
Why are you trying to turn this into a Republican bash?
because Republicans deregulated banks to the point that they were gambling on wild bets with no money to pay if they lost except customers deposits.
Quote:Congress has been under the control of Democrats for three years now and what can you point to that shows they understand the problem, much less have an answer for it?
a fair question, but I'm hoping they won't continue to deregulate any more at least. keep in mind we jsut went through thsi less than 20 years ago under Reagan. then bankers got a taste of blodd and figured out how to do it again x100. no question it will take some smart people who have the will get control of them and I'm not sure there are any in government.
Quote:An entire YEAR has been wasted in an effort to ram through a health care bill while the economy and jobs have been relegated to the "disregard" drawer by both the White House and Congress.
agree 100%
Quote:Throwing out the "evil Republicans" smoke screen does nothing worthwhile.
I think accountablility is a start
Quote:Do you have a real answer?
yes. several:
1.) no more banks too big to fail. either figure out how to liqiuidate if necessary them without a crash or break them up so they're not too big to fail
2.) absolutely eliminate high risk, exotic financial instruments from commercial banking. they take deposits and make loans, period
3.) civil and criminal penalties for negligent bond rating
4.) of course, no economic issue resides in a vacuum, and a big reason too much money went into housing and then got leveraged into even more preposterous "securities" (not very secure, huh?) was that our economy is severely distorted by massive trade deficits. the money came back and went into housing and then securities and derivatives. so we need to take massive action to correct the deficits. that will naturally result in a reduction of the over-investment in housing. housing was one of the few industries that was nailed down (pun intended) and couldn't be oputsourced, so that's where the money went. no we have nowhere for it to go. big factor in the false boom
(01-31-2010 10:44 PM)Stampeding Terp Wrote: [ -> ]An entire YEAR has been wasted in an effort to ram through a health care bill while the economy and jobs have been relegated to the "disregard" drawer by both the White House and Congress. Throwing out the "evil Republicans" smoke screen does nothing worthwhile. Do you have a real answer?
(01-31-2010 11:44 PM)Byrdy Wrote: [ -> ] (01-31-2010 10:44 PM)Stampeding Terp Wrote: [ -> ]An entire YEAR has been wasted in an effort to ram through a health care bill while the economy and jobs have been relegated to the "disregard" drawer by both the White House and Congress. Throwing out the "evil Republicans" smoke screen does nothing worthwhile. Do you have a real answer?
Pushing the the
General Motors maintained its pledge to repay billions of dollars to the U.S. and Canadian governments by June and said Ed Whitacre will stay on as chairman and chief executive.
Whitacre, a former AT&T chairman and CEO, took the top spot on an interim basis on Dec. 1, when the board asked Fritz Henderson to step down. Speaking at a press conference at GM’s headquarters in Detroit, Whitacre said he was honoured to accept the board’s invitation to remain as CEO.
"We've made significant progress in the past couple of months, so much so that I can confirm with certainty that we will pay back in full the U.S. Treasury and Canadian and Ontario government loans by June," Whitacre said. "This represents a significant milestone in our journey back to being a profitable and viable company."
Pushing the health care bill and cap and trade before the job situation stabilized was a HUGE mistake.
(01-31-2010 11:49 PM)TimTerpT Wrote: [ -> ]Pushing the health care bill and cap and trade before the job situation stabilized was a HUGE mistake.
I couldn't agree more. As I've stated previously, IMO President Obama tried to get the HCB passed while his popularity and political capital were at their peak. IF he, Pelosi and Reid had gone about it in a different manner, openly and without the political favors, it could be a done deal today. They didn't read the mood of the American people correctly even after losses in VA and NJ. It took MA to awaken them from their self-imposed stupor. They bungled the whole thing so badly that it's unlikely anything will get done on health care for quite some time. If they're smart, they'll leave it alone until the economy is back on track and that's going to take a long time. If they carry on business as usual, they're setting themselves up for a crushing defeat in November.
At least that's how I see it.
(01-31-2010 10:44 PM)Stampeding Terp Wrote: [ -> ] (01-31-2010 09:38 PM)Supersport Wrote: [ -> ]What we need to watch is Republicans in control of either the White House or congress. they legislate to let foxes in the henhouse
Why are you trying to turn this into a Republican bash? Congress has been under the control of Democrats for three years now and what can you point to that shows they understand the problem, much less have an answer for it?
An entire YEAR has been wasted in an effort to ram through a health care bill while the economy and jobs have been relegated to the "disregard" drawer by both the White House and Congress. Throwing out the "evil Republicans" smoke screen does nothing worthwhile. Do you have a real answer?
Well, there is before the US Senate a financial reform bill that has already passed in the House without benefit of a single Republican vote there for it. Which sounds familar. Just sayin'.
I fall into the category of someone who believes that TARP probably staved off something worse from happening.
However, I do think it probably shouldn't have been used for the auto industry. These industries were having problems for years - and using TARP money on these entities is like using a cutting edge cancer treatment to cure lung cancer in an individual who continues to smoke.
I think a lot of the problems now - as it pertains to getting loans - is that the banks are better off holding onto to the easy money instead of risking it a) on a current housing market that may still look like an overall bad investment and b)being wary of putting out money before an increasingly active gov't sector changes the terms of the agreement.
(02-01-2010 02:53 AM)Redstuff Wrote: [ -> ] (01-31-2010 10:44 PM)Stampeding Terp Wrote: [ -> ] (01-31-2010 09:38 PM)Supersport Wrote: [ -> ]What we need to watch is Republicans in control of either the White House or congress. they legislate to let foxes in the henhouse
Why are you trying to turn this into a Republican bash? Congress has been under the control of Democrats for three years now and what can you point to that shows they understand the problem, much less have an answer for it?
An entire YEAR has been wasted in an effort to ram through a health care bill while the economy and jobs have been relegated to the "disregard" drawer by both the White House and Congress. Throwing out the "evil Republicans" smoke screen does nothing worthwhile. Do you have a real answer?
Well, there is before the US Senate a financial reform bill that has already passed in the House without benefit of a single Republican vote there for it. Which sounds familar. Just sayin'.
Does calling it financial reform mean its a good bill?