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If The Banks Are Fine, Why Do We Need The Geithner Plan?

By Big Tent Democrat, Section Economy
Posted on Mon May 11, 2009 at 09:00:39 AM EST
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AP reported:

Government exams of the nation's biggest banks have helped lift a cloud of uncertainty that has hung over the economy. . . . "The publication of the stress tests simply cleared the air of uncertainty," said Allen Sinai, chief global economist at Decision Economics. "The results were not scary at all."

Happy to hear it. If that is the case, why in blazes do we need the Geithner Plan? It should be scrapped immediately and all government assistance, from TARP to government guarantees of bank debt should be scrapped as soon as possible, if not immediately.

Speaking for me only

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    If The Banks Are Fine, Why Do We Need The Geithner Plan? | 69 comments (69 topical)

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    Wanda on Tim (5.00 / 1) (#10)
    by TeresaInSnow2 on Mon May 11, 2009 at 09:33:30 AM EST
    Wanda Sykes quote

     

    "This is truly an honor to be here. It really is. I keep getting asked the same question, 'Are you nervous? Are you nervous?' With this administration, what is there to be nervous about? If I do a good job, I get great press. If I screw it up royally, Tim Geithner gives me a bonus."
     

    That's why we need the Geithner plan, for when the "screw up royally" so they can get more bonuses.  And it's just a matter of time before the fiction turns into the hard reality.  They can't hide behind Emeril Lagasse style book-keeping forever.  

    Heh (5.00 / 2) (#14)
    by Big Tent Democrat on Mon May 11, 2009 at 09:37:10 AM EST
    That was funny at least.

    Parent
    Most Banks Don't Need... (5.00 / 1) (#34)
    by santarita on Mon May 11, 2009 at 10:10:18 AM EST
    special assistance.  And Geithner has already said that banks that received TARP money can return the money as long as doing so won't reduce them below capital adequacy levels required by the government AND once the $$$ is returned they can't participate in the favorable government guaranty program.  The PPIP part has always been voluntary and banks may not choose to participate it in, especially if they think that they can achieve capital adequacy objectives without selling the toxic assets.  PPIP may be DOA.  

    It remains to be seen if the feds have been tough enough on capitalization requirements.  What we are seeing is a struggle between the government and some of the large banks.  Let's hope the courts don't get involved.

    That's not precisely what Geithner said (none / 0) (#40)
    by Big Tent Democrat on Mon May 11, 2009 at 10:16:40 AM EST
    To his credit, he said that if banks want to get out of government restrictions imposed by TARP, they ALSO have to abandon government guarantees of their debt.

    Good for Geithner on THAT.

    Parent

    We Have Finally Found... (none / 0) (#54)
    by santarita on Mon May 11, 2009 at 10:55:42 AM EST
    something we agree on!

    Parent
    It's true that the banks are raising capital (5.00 / 1) (#64)
    by MyLeftMind on Mon May 11, 2009 at 03:05:52 PM EST
    but that may be partly because it's clear that the Obama administration will continue to work with banks to socialize losses while privatizing gains.  Of course investors are now willing to invest in the banks.  Removing the banks' toxic assets simply means eliminating their liability for past mistakes and transferring the responsibility onto new duped investors and the public.  Geithner's solutions create a convoluted process that limits transparency and accountability.  The mortgage plan they rolled out a month or so ago let's the banks offer interest rate reductions and forgive a percentage of principal, with the taxpayers footing the bill for the difference.  Homeowners facing foreclosure are jumping on the bandwagon, but they have to pay 90 days of payments first, temporarily beefing up the banks' balance sheets.  Meanwhile, the banksters apparently can charge you double principal for any month you missed, which means the homeowner or the taxpayers pay that doubled principal.  Are the stress tests accounting for the temporary infusion they're receiving as a result of potential future government bailouts?

    A solution that supports the general public instead of the banksters and the superrich would create broad-based recovery from the ground up:  1) Refinancing of mortgages by the government (actual purchase of mortgages) requiring originating banks to continue to process payments for a small monthly fee. Since the government funds the new loans, the public would get the returns,  2) Business loans from the government utilizing credit unions and only those banks that don't need additional infusions of public money, and 3) Single payer health care to relieve Americans and American businesses of the outrageous expenses they now face.  

    That's what it would look like if our government wanted to support our economy while protecting most Americans.  Instead we have a convoluted process that will limit transparency and hide what's going on while the super rich make off with the last bit of resources our great country has to offer.  

    Nobody destroys an argument (none / 0) (#1)
    by Militarytracy on Mon May 11, 2009 at 09:04:44 AM EST
    based on lies with a short common sense question like you do.  Well, sometimes Atrios does too.

    I would like an answer (5.00 / 2) (#5)
    by Big Tent Democrat on Mon May 11, 2009 at 09:15:25 AM EST
    to the question.

    If the banks are fine, why do we need PPIP?

    Parent

    Or, if the situation is not scary at all (none / 0) (#6)
    by Cream City on Mon May 11, 2009 at 09:20:19 AM EST
    why are we still scared?

    (Hmmm, maybe because being lied to about all this, while also being taxed to the max to bail out the banks, ought to scare us all?)

    Parent

    All the news reports and articles (none / 0) (#9)
    by ChiTownMike on Mon May 11, 2009 at 09:31:06 AM EST
    I read said that the banks were not as in bad shape as some people wished they were. They also said they were not out of the woods yet. In addition the reports said that a few need to raise more capital to prepare for a possible larger economy downturn and/or additional consumer defaults which is a responsible thing for the government to insist on. And they said the asset problem was still a problem and that they needed to be removed from the banks balance sheets which is why we needed PPIP and still do. That is what every major report I read said.

    Parent
    Do you have a link to the article (none / 0) (#11)
    by Militarytracy on Mon May 11, 2009 at 09:34:18 AM EST
    that says that banks aren't in as bad shape as some people wish they were?

    Parent
    This commenter (none / 0) (#13)
    by Big Tent Democrat on Mon May 11, 2009 at 09:36:31 AM EST
    just does not like that we do not swallow the BS whole.

    His commenting on this subject is just ridiculous. Has been for a while.

    Parent

    I see (none / 0) (#16)
    by Militarytracy on Mon May 11, 2009 at 09:38:28 AM EST
    I've been away a bit

    Parent
    Wished they were? (none / 0) (#12)
    by Big Tent Democrat on Mon May 11, 2009 at 09:35:46 AM EST
    Your commenting on this subject is simply ridiculous.

    BTW, Wells and Morgan Stanley raised 15 billion in the private cpaital markets already and BoA is "capitalizing" (Geithenr says it is ok) by converting the government's preferred shares to common.

    Your own comment proves the absurdity - you write  banks are "ok" buuuuut "the asset problem was still a problem and that they needed to be removed from the banks balance sheets which is why we needed PPIP and still do. That is what every major report I read said."

    Precisely my point. These two things can not be true.  

    Parent

    Your article citation (none / 0) (#36)
    by ChiTownMike on Mon May 11, 2009 at 10:13:09 AM EST
    commented on the stress tests which focused on the current cash liquidity of bank capitalization. As your citation said the tests did clear the air of uncertainty and were not scary as the banks that do need additional capital to plan for any further economic falloff have the means to add that additional capital to their balance sheets.

    Of course all that has nothing to do with PPIP which is a separate issue as there are many moving parts to this problem. Some being shorter term and focused on the banks not falling into greater problems, and some being longer term fixes like the assets and PPIP. It's not hard or ridiculous to see the difference between the two.

    Parent

    It has EVERYTHING to do with PPIP (none / 0) (#43)
    by Big Tent Democrat on Mon May 11, 2009 at 10:19:26 AM EST
    If the banks are ok, then why do we need PPIP?

    Hell, Wells and Morgan Stanley raised 15 billion dollars in a flash.

    Why do we need to take assets off the banks' books if the banks are fine?

    Parent

    Brother (5.00 / 1) (#50)
    by ChiTownMike on Mon May 11, 2009 at 10:44:06 AM EST
    if you can't see the difference between current liquid capital needs and the need to take shaky long term assets off the books by now then I don't know what to tell you. In business you take care of different problems in different ways and in different time frames. I suspect you know that but chose to ignore it so you can just keep trashing the banks and Obama.

    Why do we need to take assets off the banks' books if the banks are fine?

    The banks are fine in what the stress tests were testing for and that wasn't the worth of the assets or their long term affect. Again I suspect you know that or at least hope you would. And if you know it then I'm not sure why you are asking what you are other than to just keep trashing the banks and Obama. Of course you are free to do that but it doesn't help the problem or help inform others of the current viability of the remedies that have been put in place.

    Parent

    I know what to tell you (none / 0) (#55)
    by Big Tent Democrat on Mon May 11, 2009 at 11:05:23 AM EST
    If the banks are unable to carry out their business - to wit, they do not have the capital to make new loans, then they are not "ok."

    that seems a difficult idea for you to hold in your head.

    Parent

    They are carrying out (none / 0) (#59)
    by ChiTownMike on Mon May 11, 2009 at 11:26:39 AM EST
    their business. As I posted previously they are lending. Why do you deny that they are? They are also trading in their stocks and bonds divisions. They are also starting to turn small profits.

    If things keep going in that direction then the banks will be able to attract more capital and have more money to lend as credit worthy demand increases but they can't lend until credit worthy demand increases.  There has to be demand and it has to be credit worthy. Do you understand that? For some reason you seem to want them to lend to additional borrower's who do not exist. That is an unreasonable position. PPIP was created to facilitate the banks being able to borrow so they can lend but yet you oppose PPIP. So on one hand you want the banks to lend more but you don't want to put them in a position to do so. You are at odds with yourself it seems.

    Parent

    I am not denying it (none / 0) (#60)
    by Big Tent Democrat on Mon May 11, 2009 at 11:34:28 AM EST
    You were.

    the question remains, why PPIP?

    Parent

    Why are they "trading" (none / 0) (#67)
    by NYShooter on Tue May 12, 2009 at 05:48:11 AM EST
    anything?

    Are you saying we gave them tax dollars to gamble with?

    Yes, they showed a small 1'st quarter profit. But they didn't make it by traditional bank practises....lending. As was widely reported, they made it by gambling in the stock market (which fortunately had a bounce off the bottom) and by charging outrageous fees and penalties.

    It really isn't that difficult to make money when the Government gives it to you for free, and if you blow it in the casino, well, they'll just give you some more.

    Face it; This is a power play. The banks said to the politicians, "give us trillions of the taxpayer's dollars since we don't intend to give up the reckless, prolific lifestyles that we've gotten so used to. And if you don't, you'll never enjoy another victorious election celebration again.

    It really is that simple.

    Parent

    We need the Geithner plan.... (none / 0) (#28)
    by lambert on Mon May 11, 2009 at 10:04:17 AM EST
    .... so we can shovel trillions of dollars to the banks with no transparency and no accountability.

    Surely it's a mistake, at this point, to imagine that there's any public policy aspect to this at all?


    Parent

    The stress tests indcated (believe them or not) (none / 0) (#29)
    by steviez314 on Mon May 11, 2009 at 10:07:06 AM EST
    that for the CUURENT level of banks' assets, they are or, with new capital,will be well-capitalized.

    That said nothing about them making NEW loans.  If you want the banks to make new loans (and that decision has been made that these banks are the vehicle to make new loans), then they would either need more capital than the tests indicated, or old assets need to come off their books.  The PPIP will get some of those old assets off.

    I expect that those banks that the tests indicate are over-capitalized will not participate in the PPIP but will choose to keep those assets.

    Also, note that the stress tests account for TARP I--sufficient capital levels were determined given the TARP I money already on their books.  The tests would have come out differently if those were backed out.

    Parent

    I thought loaning money (none / 0) (#31)
    by Big Tent Democrat on Mon May 11, 2009 at 10:08:30 AM EST
    was their business.

    Are you saying they are fine, but can not continue in their businesses?

    This is ridiculous.

    Parent

    Really, BTD, how hard is this? (none / 0) (#38)
    by steviez314 on Mon May 11, 2009 at 10:15:09 AM EST
    Banks must keep a certain percentage of capital against their assets to cover future losses on those assets.

    The stress tests said they have or must get, enough capital to meet that requirement.  The tests, like all regulatory ones, look at the balance sheet AS IT EXISTS NOW.

    If you want banks to make new loans, they must get new capital, or run off old loans, or retain enough earnings to do so.

    In no discussion fo the stress tests is it ever assumed that the banks will grow their loans by x%.

    Parent

    If banks can not make new loans (none / 0) (#41)
    by Big Tent Democrat on Mon May 11, 2009 at 10:18:01 AM EST
    then how can they be Ok? Making new loans is their business.

    How freaking hard is that Stevie?

    Parent

    Until this recession is over, the banks' (none / 0) (#45)
    by steviez314 on Mon May 11, 2009 at 10:22:37 AM EST
    business is not making new loans--it's making enough money to cover losses.  It's not needing new government help.  It's being solvent.

    The stress tests were designed to answer these questions.  That's what they got the OK on.  Not on their ability to make new loans.

    The PPIP is designed so they can make new loans.  I guess that answers your blog post question.

    Parent

    Interesting (5.00 / 1) (#53)
    by Steve M on Mon May 11, 2009 at 10:54:14 AM EST
    So credit will not be available again UNTIL we are already out of the recession?  How do you envision us getting out of the recession without credit?

    Parent
    So why PPIP? (none / 0) (#49)
    by Big Tent Democrat on Mon May 11, 2009 at 10:27:17 AM EST
    So they can make new loans they should not make?

    Or to cover for past losses?

    I vote the second.

    Parent

    Banks Are Lending... (none / 0) (#52)
    by santarita on Mon May 11, 2009 at 10:53:59 AM EST
    they are just restricting the kind of loans that they make.  They don't have the capital or appetite for making less than solid gold loans.  

    Parent
    Most are lending (none / 0) (#46)
    by ChiTownMike on Mon May 11, 2009 at 10:24:47 AM EST
    Some are lending based on current demand which is low, while some are lending a little bit less based on the fact that they are conserving capital for a possible future economic downturn and the defaults that will result from it. In addition their lending is going to be less because they are not taking the risks by lending to non-credit worthy consumers and businesses which is part of the reason they got themselves into the mess they are in. To not take those risks now shows they have learned from their past mistakes. I'd say that is a good thing.

    Parent
    So no need for PPIP (none / 0) (#47)
    by Big Tent Democrat on Mon May 11, 2009 at 10:26:32 AM EST


    Parent
    No necessarily (none / 0) (#56)
    by ChiTownMike on Mon May 11, 2009 at 11:11:30 AM EST
    Some banks may need PPIP. If they do then it is a good thing it is available. On the other hand some banks may not need it which would be a good thing. It would be a good thing because it would not only free up government money for other things but it would also show that the so called toxic assets are not currently being viewed by the banks as being as toxic as some people have been saying they were for months now. I don't think there is any question that the small and regional bubbling up of the RE market evidenced by a resurgence of sales and a price bottom already being reached has put new life into those assets.

    If the bottom has been reached in key areas such as it has in regions in California then TARP is doing it's job and bought time and will continue to as other markets slowly reemerge making the assets viable again. Which was the whole premise behind PPIP - that being that the assets still had tangible worth.

    In the end if PPIP is not needed by the majority of the banks then the Nationalization people will be proven wrong as Obama's programs would have plugged the dike until things settled. And if PPIP  is needed and is successful the Nationalization people will also be proven wrong as the assets will not just be dead wood sitting on the taxpayers government balance sheets.

    Parent

    Why is it a good thing? (none / 0) (#57)
    by Big Tent Democrat on Mon May 11, 2009 at 11:15:34 AM EST
    Why isn't, say, HOLC, a better thing?

    Parent
    PPIP and HOLC (none / 0) (#61)
    by ChiTownMike on Mon May 11, 2009 at 11:45:07 AM EST
    are two very different things that would address two very different problems. Plus HOLC does not exist.

    Parent
    Neither does PPIP (none / 0) (#62)
    by Big Tent Democrat on Mon May 11, 2009 at 11:47:06 AM EST
    Proposals are proposals.

    Indeed, they are very different proposals.

    One has merit, HOLC, which would help homeowners AND banks. The other is simply a giveaway to banks, PPIP.

    Parent

    Actually PPIP (none / 0) (#63)
    by ChiTownMike on Mon May 11, 2009 at 12:07:19 PM EST
    does exist and is in it's launching stages with a lot of big money lining up to take part in the program. It is more than a proposal.

    HOLC on the other hand is not even a proposal by the administration. They do have other programs aimed at consumer RE loans but as far as I know they have not yet been successful. But that is a topic for another thread.

    Parent

    Actually (none / 0) (#65)
    by Big Tent Democrat on Mon May 11, 2009 at 03:14:00 PM EST
    it doesn't exist.

    Parent
    I've read a lot of articles that says it does (none / 0) (#66)
    by ChiTownMike on Mon May 11, 2009 at 07:10:18 PM EST
    Obama says it does. In fact the government was  taking applicationsup to the April 24th deadline and will approve them by May 15th. The program already has funds set aside for it. At least 100 have applied for the investment plan.

    Maybe you need to read up on it a little bit more. On the other hand my guess would be that you do know it exists.

    Parent

    Well (none / 0) (#68)
    by Big Tent Democrat on Tue May 12, 2009 at 07:25:28 AM EST
    You make my point. It does not exist. It is true there have been some actions that could lead to it, but it does not exist. And it should not, if the banks are ok.

    Parent
    I see (none / 0) (#69)
    by ChiTownMike on Tue May 12, 2009 at 10:28:06 AM EST
    Your point is analogous to there was never a space program to have a man on the moon until there was actually a man stepping on the moon. Therefore there is not a PPIP program until the first dollar is funded. That is not a very serious argument. In  the very near future it will be a losing argument as you know, not that it already isn't.

    Parent
    Yes! guess we don't have to buy (none / 0) (#2)
    by ruffian on Mon May 11, 2009 at 09:09:13 AM EST
    all those toxic assets after all!! Why is there not rejoicing in the land?

    Does scrapping also mean (none / 0) (#3)
    by dk on Mon May 11, 2009 at 09:13:27 AM EST
    that we get the unaccounted for hundreds of billions of dollars back too?

    Hey (none / 0) (#4)
    by Big Tent Democrat on Mon May 11, 2009 at 09:14:50 AM EST
    Everything is great with the banks we are now told. Why should we not get it all back?

    Parent
    Sh*t... (none / 0) (#7)
    by kdog on Mon May 11, 2009 at 09:22:43 AM EST
    the whole hustle should be scrapped, or have been scrapped, even if the results of the stress tests were "scary"...thems the breaks in a free market economy, every individual and corporation runs the risk of going busto.

    If we want a system where nobody fails, then nobody can get insanely wealthy...its called socialism or communism.  This mish-mash of two conflicting economic systems can't fly.  

    Perhaps (none / 0) (#8)
    by Big Tent Democrat on Mon May 11, 2009 at 09:25:42 AM EST
    But the scam does not work if you are going to give me the "all clear."

    What rationale for the Geithner Plan now?

    Parent

    Beats me brother.... (none / 0) (#18)
    by kdog on Mon May 11, 2009 at 09:39:05 AM EST
    I didn't see the rationale before the cleaner bill of health for the banks came out...much less now.

    Though the scam will still work...they've got the power and the guns, and what are we gonna do about it?  Vote Republican?  They'd pull the same stunt.  Tax revolt or protest?  Not as long as we are all still eating good.

    Geithner and the gang have the keys to the safe and carte blanche...all we can do is make enough of a stink to keep the con to a minimum, but we can't stop it.

    Parent

    Change we can believe in . . . (none / 0) (#19)
    by Big Tent Democrat on Mon May 11, 2009 at 09:40:31 AM EST


    Parent
    why does the wealth have to be insane? (none / 0) (#25)
    by Dadler on Mon May 11, 2009 at 09:59:12 AM EST
    brother, we can have a more equitable system for everyone, while still maintaining wealth for innovation, acheivment, what have you, by simply taking the insane part out of the wealth.  Or are we so addicted to the idea of insane wealth that we just can't stand the thought of, well, normal wealth?

    i don't see the choices as either/or.  i see them as smart or dumb.  we are choosing dumb day after day after day.  it's a choice, not an inevitablility.

    and it is truly disappointing (to put it mildly) that with this "problem", a quite major one inedeed, that obama being both dishonest and cowardly.  and that is inexcusable.

    Parent

    It doesn't have to be... (none / 0) (#30)
    by kdog on Mon May 11, 2009 at 10:08:11 AM EST
    I'm just saying privatized gains/socialized losses can't work...socialize gains and losses or privatize gains and losses and come what may.

    To be honest I don't know which is the best economy...as a liberty extremist I lean towards a truly free market but I don't know, all systems have their problems...but either is preferred to the rigged market cronyism of socialized loss/private gain that Paulson/Geithner delivered.  That, I'm confident, will be a disaster for the little guy....guaranteed.

    Parent

    Are they saying the Geithner Plan fixed the banks? (none / 0) (#15)
    by ruffian on Mon May 11, 2009 at 09:37:16 AM EST
    If that is the case, they sure are modest about it.

    On Stephanopolous yesterday they had a typically fact-lite discuassion about what to do with the remaining 100 billion or so in TARP funds, if the banks don't need them. They seemed to think that money could just be given to municipalities, like it was part of the stimulus plan or something.

    One thing is sure, we are not going to get an intelligent answer to your question from the MSM.

    Nope (none / 0) (#17)
    by Big Tent Democrat on Mon May 11, 2009 at 09:38:44 AM EST
    they are saying the banks are fine but we STILL need to save them via the Geithner Plan.

    See ChiTownMike for instance. It makes no sense.

    Parent

    Yeah, I figured as much (none / 0) (#21)
    by ruffian on Mon May 11, 2009 at 09:45:34 AM EST
    'the banks passed the stress test' comes with a whole raft of caveats showing they are not fine unless thay continue to be propped up.

    I know most people are not going to look at the fine print, which is just what the perpetraters of the con want.

    And no, I don't want the banks to look bad if they are not, I just want the truth.

    Parent

    Scary is as Scary Does (none / 0) (#20)
    by Robot Porter on Mon May 11, 2009 at 09:44:27 AM EST
    Among the 10 banks that need to raise more capital, Bank of America Corp. needs by far the most -- $33.9 billion. Wells Fargo & Co. needs $13.7 billion, GMAC LLC $11.5 billion, Citigroup Inc. $5.5 billion and Morgan Stanley $1.8 billion.

    The five other firms found to need more of a capital cushion are all regional banks -- Regions Financial Corp. of Birmingham, Ala.; SunTrust Banks Inc. of Atlanta; KeyCorp of Cleveland; Fifth Third Bancorp of Cincinnati; and PNC Financial Services Group Inc. of Pittsburgh.

    Maybe this isn't The Exorcist scary, but it's at least as fright inducing as Robert Wise's The Haunting.

     

    And yet the government accepts that (none / 0) (#22)
    by Big Tent Democrat on Mon May 11, 2009 at 09:48:49 AM EST
    BoA can meet its capitalization requirements by converting its government held preferred shares to common stock.

    Wells has already raised 7.5 billion in the private capital markets.

    GMAC will draw the necessary funds from TARP.

    Morgan Stanley raised 7.5 billion in the private capital markets.

    I do not know what the regional banks plan to do.

    Hell, problem ALREADY solved.

    Now, if the government exercises its control over Citi and BoA, we are all set.

    The question remains, why do we need the Geithner Plan?


    Parent

    Because the stress tests are a scam? (none / 0) (#24)
    by Robot Porter on Mon May 11, 2009 at 09:54:48 AM EST
    "It's not really stressful, so how could it be a stress test?" said Simon Johnson, a former chief economist with the International Monetary Fund and professor at the Massachusetts Institute of Technology. "This makes it seem like we're not having a financial crisis at all."

    Johnson said some bank executives have told him they already are losing more money on commercial real estate loans than the tests estimated even under the harsher economic scenario.

    Boo!

    Parent

    Bingo (5.00 / 1) (#27)
    by ruffian on Mon May 11, 2009 at 10:03:57 AM EST
    That is the real truth.

    Credit card defaults will get even worse too, as unemployment worsens and the general economy further deteriorates. But of course, according to certain NPR reporters, that does not effect bank health at all.

    Geithner Plan is just putting the train wreck in slow motion and hoping for a miracle. Maybe Superman will fly real fast and spin the earth in reverse until the banks have no more bad debt.

    Parent

    I forgot the main objective of (5.00 / 1) (#35)
    by ruffian on Mon May 11, 2009 at 10:12:56 AM EST
    the Geithner Plan - making sure the banksters don't lose any personal wealth in the train wreck to come.

    Parent
    "Greed is good." (none / 0) (#39)
    by Robot Porter on Mon May 11, 2009 at 10:15:38 AM EST
    To continue on the movie reference theme.

    Parent
    "Are you crazy? (none / 0) (#33)
    by Robot Porter on Mon May 11, 2009 at 10:09:28 AM EST
    The fall will probably kill you."

    There.  Now we have four movie references in this thread.

    Parent

    Ha - Bolivia may be looking good (5.00 / 1) (#37)
    by ruffian on Mon May 11, 2009 at 10:14:48 AM EST
    in a couple of years.

    Parent
    "Kid, next time I say 'Let's go someplace ... (none / 0) (#42)
    by Robot Porter on Mon May 11, 2009 at 10:18:14 AM EST
    like Bolivia' let's GO someplace like Bolivia."

    ;)

    Parent

    BofA... (none / 0) (#23)
    by kdog on Mon May 11, 2009 at 09:51:26 AM EST
    and the loser brigade better come up with marketable services worth all them billions then, shouldn't they?  Otherwise, as I understand our economic system, it was nice knowing ya.

    Parent
    Regardless of the tests.... (none / 0) (#26)
    by Samuel on Mon May 11, 2009 at 10:01:25 AM EST
    We didn't need to create money to give to private banks.  Now it's time for people like you to stomp your feet about a fabricated issue - the stress test.

    Great website.  

    When I read that the banks (none / 0) (#32)
    by Anne on Mon May 11, 2009 at 10:08:43 AM EST
    being tested were negotiating with Treasury over just how stressful those tests should be, it was just one more sign - to me, anyway - that not only do they think they are still in charge, but Geithner and his band of former Goldman execs are making sure of it.

    I know they say they are trying to build confidence in the banking system and in the markets, but guess what?  I don't trust any of them as far as I could throw them - I haven't seen any indication that I should - have you?

    Arguing with Bank Examiners... (5.00 / 1) (#44)
    by santarita on Mon May 11, 2009 at 10:20:23 AM EST
    is a national pastime for bank management. The fact that there were negotiations over the final report shouldn't be surprising.  And generally the negotiations are over incorrect statements of facts or conclusions that weren't merited based on additional information or different ways of looking at things.  For example, if the bank examiners didn't take into account a pending sale of a major asset, the bank can "negotiate" with the regulators on that.

    It maybe that the feds were too easy on the banks or that the feds have an approach that is based on assumptions that will prove incorrect.  But the fact that "negotiations" took place is itself not significant.  

    Parent

    And one more funny (none / 0) (#48)
    by TeresaInSnow2 on Mon May 11, 2009 at 10:27:16 AM EST
    Economic Haiku (from Seattle Times):

    BofA, Merrill
    Two drunks hold each other up?
    Their bender, our cash

    Who are we to deprive them of their bender?
    Think of Geithner as a bartender, us as Planet Cocktail.  They need his plan for that bartender-like psychological reliability.  Planet Cocktail will always be there, thus to average Americans the banking industry is fine.

    Sorry, I keep throwing stuff out there in the hopes it will help give you answers.  Okay, I'll stop now.

    Why Do We Need The Geithner Plan? (none / 0) (#51)
    by Abdul Abulbul Amir on Mon May 11, 2009 at 10:47:36 AM EST

    Chrysler.  

    The hold on the banks is needed to screw the bond holders to the benefit of the UAW.  GM is next.

    Hold on the banks? (none / 0) (#58)
    by ruffian on Mon May 11, 2009 at 11:22:06 AM EST
    What hold on the banks is that? They have gotten everything they wanted, at very little cost. They are the ones with a hold on the taxpayer.

    Parent
    If The Banks Are Fine, Why Do We Need The Geithner Plan? | 69 comments (69 topical)

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