Charlie Rose

IRISH  05/09/2009 01:04 PM Report

Given the focus of this excellent interview on the "here and now" aspect of the financial crisis, it will be interesting once the present crisis assumes a more stable position to witness if the federal govt does a "reset" of the entire regulation of the financial markets to avoid the mess of the last 20 years.

doodahdaze  05/09/2009 09:33 AM Report

and the "liberal-causes" lobbyists

doodahdaze  05/09/2009 09:30 AM Report

tartufe, that's good of you to show both sides of the argument; i'm impressed.<smile>

It was combination of both liberal and conservative, tinkering and manipulation of the system by politicians spurred on by their constituents, that got us into this mess. Something about, pressuring and forcing banks to make riskier loans so minimum wage earning illegal aliens and their ilk can own homes; and the retaliation, of bringing back credit default swaps and their ilk to leave the masses holding the bag of shit... Maybe bringing back the Glass-Stiegel Act would be a start. It sure beats lining up the "financial-services" CEOs in front of a firing squad.

tartufe  05/08/2009 09:21 PM Report

I like REMant, think that sometimes a lengthy contribution is worth the effort. So this is lifted - a cut and paste.

This week on the JOURNAL, Bill Moyers spoke with U.S. Senator Dick Durbin (D-IL) about campaign finance reform and the prospects of Congress passing legislation to help struggling homeowners avoid foreclosure.

Against intense opposition from banks and credit unions, Durbin has been working to pass a bill that would empower bankruptcy judges to reduce homeowners’ mortgage debt and help them to stay in their homes. Last week, 12 Democrats joined Senate Republicans to defeat the legislation.

Durbin said that banks caused the current recession and are now working against government policy that would help solve the economic crisis:

“It was clear to me that even though the mortgage foreclosure crisis is getting progressively worse in this country and is, I think, at the heart of our economic weakness, that the banks were unwilling to step in and really participate in finding a solution... Here we are in a recession brought on by these financial institutions [with] some very bad decisions that they’d made causing great pain and suffering for a lot of workers and businesses and homeowners across America. And yet when you sit down and talk about some fundamental reform of these financial institutions, so that people have a fighting chance when it comes to their credit cards, so that folks facing mortgage foreclosure have a final chance to maybe save their homes, basically the banks are gonna have the last word. It’s counterintuitive – the people who brought this crisis to us are the ones that are dictating policy.”

Some argue that well-intentioned but misguided government policies are partly to blame for the mortgage crisis and that further federal intervention in the housing market could make things worse. Steven Malanga of CITY JOURNAL wrote:

“Nearly a century of Washington’s efforts to promote homeownership has produced one calamity after another... As Washington grapples with the current mortgage crisis, advocates from both parties are already warning the feds not to relax their commitment to expanding homeownership – even if that means reviving the very kinds of programs and institutions that got us into trouble... Our praiseworthy initial efforts – to eliminate housing discrimination and provide all Americans an equal opportunity to buy a home – were eventually turned on their heads by advocates and politicians, who instead tried to ensure equality of outcomes... Political meddling in this vast marketplace has wreaked havoc time and again, and will continue to do so – if we let it.”

REMant  05/08/2009 08:55 PM Report

I thought that as long as I had trespassed on the reading public significantly already, it wouldn't matter much if I did further. The following is from From Lionel Robbins, The Great Depression (1934, reprinted 1971) p69-75 available at http://www.mises.org/books/depression-robbins.pdf :

"It would be a great mistake, however, to attribute the intensification of the crisis, particularly in its earlier stages, entirely to the influence of such obstacles [as protectionism]. There were other policies adopted, the effect of which was no less serious. The breakdown of an inflationary boom is a revelation of a wastage of capital. Large blocks of investment which have been made in the expectation of profit now prove to have no such prospect. It follows, therefore, that if profitability is to be restored costs must be cut and the capital resources rehabilitated. In earlier depressions this has been the rule. And since the process has started quickly, comparatively little cutting has been necessary. But at the outset of this depression other measures were adopted. In the United States the word went forth that consumers' purchasing power must at all costs be maintained. President Hoover pledged the leaders of big industry to make no reduction of wage rates. Until the summer of 1930 no serious reduction of wage rates took place. At the same time special efforts were made to maintain rates of dividends for shareholders. In Germany, too, throughout 1930 wage rates were well maintained. Now this policy was the reverse of what was needed. As we have seen already, the depression is essentially a depression in the constructional and raw material producing industries—a falling-off of demand for capital goods. As will be readily seen from the theory which has already been developed, one way of explaining the coming of depression is to say that demand at the consumers' end has become relatively too high. And, in fact, there was no deficiency of consumption at this period. Global statistics of consumption are almost impossible to obtain. But investigations made by the Harvard School of Business indicate a state of affairs which is far from suggesting that consumers' buying was unduly slack. The following table exhibits some of the more spectacular results which the Harvard enquiry brings to light: [table omitted] These are admittedly strong cases. But it is clear that in many lines, consumption in 1930 was higher than in the boom year 1929. In 1931 it was still high. Not until 1932 when the deflation which followed the financial crisis of 1931 had the system in its grip was there any important falling off. This is exactly what we should expect from the theory outlined in Chapter IV. But it is not a state of affairs which seems to call for the action which was taken. In fact, the result of this action was to intensify the effects of the boom. The maintenance of wage rates and dividends was at the expense of capital. There can be little doubt that it was financed by encroachment on secret reserves. But what does this mean? Simply that the new saving of the community which takes up the sale of securities that constitute hidden reserves, instead of constituting new demand for the products of the capital-goods producing industries, is appropriated

for the consumption of wage earners and dividend receivers. Consumption is maintained at the expense of capital. The powers of resistance of the capitalproducing industries are sapped, and the struggle for liquidity is intensified. Thus, when cost cutting actually began, the cuts which were necessary if profitability was to be restored were very much greater and very much more disturbing to general confidence than would have been the case if the process had not been so long delayed. The policy of maintaining consumers' purchasing power was of limited application and duration. Much more damaging and productive of general deflation have been the policies adopted in regard to debts and bad business positions in general. For these have been almost universally adopted. In the course of a boom many bad business commitments are undertaken. Debts are incurred which it is impossible to repay. Stocks are produced and accumulated which it is impossible to sell at a profit. Loans are made which it is impossible to recover. Both in the sphere of finance and in the sphere of production, when the boom breaks, these bad commitments are revealed. Now in order that revival may commence again, it is essential that these positions should be liquidated. There is nothing which is more damaging to confidence, nothing therefore which is more deflationary, than the exisistence on a large scale of bad business positions. They affect the whole business atmosphere. The word goes round that such and such a house is in difficulties. People say, "It's only a matter of time before a crash comes. When it comes it may hit us too." Hence, even if their own position is perfectly sound, they begin to draw in their horns to make their position more liquid. So too in the commodity markets. If stocks are hanging over the market, even if for the time being prices have not fallen, people become nervous. They say, "The thing cannot last. It would be foolish to buy extensively." So hand-to-mouth buying sets in. The fear of a break is often much worse than the break itself. Now in the pre-war [WWI] business depression a very clear policy had been developed to deal with this situation. The maxim adopted by central banks for dealing with financial crises was to discount freely on good security, but to keep the rate of discount high. Similarly in dealing with the wider dislocations of commodity prices and production no attempt was made to bring about artificially easy conditions. The results of this were simple. Firms whose position was fundamentally sound obtained what relief was necessary. Having confidence in the future, they were prepared to foot the bill. But the firms whose position was fundamentally unsound realised that the game was up and went into liquidation. After a short period of distress the stage was once more set for business recovery. In the present depression we have changed all that. We eschew the sharp purge. We prefer the lingering disease. Everywhere, in the money market, in the commodity markets and in the broad field of company finance and public indebtedness, the efforts of Central Banks and Governments have been directed to propping up bad business positions. We can see this most vividly in the sphere of Central Banking policy. The moment the boom broke in 1929, the Central Banks of the world, acting obviously in concert, set to work to create a condition of easy money, quite out of relation to the general conditions of the money market. This policy was backed up by vigorous purchases of securities in the open market in the United States of America. From October 1929 to December 1930 no less than $410 millions was pumped into the market in this way. The result was as might have been expected. The process of liquidation was arrested. New loans were floated. The following table shows the issues on foreign account alone in the principal investment centres for the years 1928 to 1932 [table omitted] It will be seen that the issues in the second quarter of 1930 were of an order of magnitude comparable with the issues of the corresponding quarter of 1928. This money was not soundly invested. For the most part it went to prop up positions which were fundamentally unsound. The easy conditions in the money market then and later on made possible the carrying of stocks which otherwise would have had to be sold off. The fundamental causes of uncertainty and deflation were not removed. It is clear from their magnitude that they could not be removed in this way. The reflation merely helped them to persist. But this was not all. The policy of relief was not confined to the money markets. Everywhere the Governments of the world, fearing the effects of a break, intervened in one way or another to support weak positions. We have noted already the multiplication of tariffs. More direct forms of support were almost equally prevalent. The expenditure of the Federal Farm Board, the Reconstruction Finance Corporation, the renewed support to restriction schemes of one kind or another, are only the most conspicuous cases of a policy which was universal. The effects we know: continuation of uncertainty, intensification of the deflation, prolongation of the depression. It is important to realise the nature of this diagnosis. It is not difficult for its critics, who are often people with something to save from the wreck themselves, to misrepresent it as a plea for bankruptcy as such. But this is not the case. Nobody wishes for bankruptcies. Nobody likes liquidation as such. If bankruptcy and liquidation can be avoided by sound financing nobody would be against such measures. All that is contended is that when the extent of mal-investment and overindebtedness has passed a certain limit, measures which postpone liquidation only tend to make matters worse. No doubt in the first years of depression, to those who held short views of the disturbance, anything seemed preferable to a smash. But is it really clear, in the fourth year of depression, that a more astringent policy in 1930 would have been likely to cause more disturbance and dislocation than the dislocation and disturbance which have actually been caused by its postponement?

doodahdaze  05/08/2009 06:24 PM Report

"The paradoxical paradigm is a direct result of Newtonian physics; which is why we must embark the embargo." - an expert, circa "some son-of-a-bitch from out of town" - Harry Truman

scottf  05/08/2009 05:29 PM Report

I agree, he took it very easy on Geitner.

- Geitner is too Wall Street centric

- He thinks that bailing out banking will solve the unemployment/underemployment problem - it won't.

- Banks won't change their ethical practices or adjust their compensation rates because they were in no way punished by this crisis

- The idea that talent would not be available at lower comp levels is completely rediculous (thats like saying if you get rid of a dictator and create a power vacuum that there would be no one to fill it) - talent is everywhere. Its not rocket science to be in banking

- Entities that are too large to fail are being forced by the gov to become larger - what about that?

- Our "Free Trade" policies have eroded the job market for low skilled workers so severly that the downward wage pressure on the American middle class has created a demand for borrowing inexpensively, which the government was all too willing to facilitate, especially due to the ego of A. Greenspan.

- You cannot manipulate a market to function more like a market -

They may save the finance sector for the short term at a HUGE expense to tax payers, however, they won't fix the economy or the recession. Yet another reason why the Federal Government is too large and too powerfull, and why the vast majority of your tax revenue should go to the most local level. Get used to it, this is the way America is going to be for a long time.

REMant  05/08/2009 05:12 PM Report

Tho the transcript shows little more than grunts and groans on Charlie's part, not much more could have been elicted from Mr Geithner. Unfortunately, it is more of the same. While it is nice to know that the admin are all on the same page, one has the feeling that the page has been dictated by Larry Summers, who would likely be Treasury secretary if he had been confirmable, and these periodic sessions are taking on the quality of a farce.

This debate rests and always has rested since 1936, on Keynes assertion that free market ideas should be abandoned for mercantilism, because as he said "in the long run we are all dead." But we will certainly be dead if morality, the real utility that must occur for survival, is abandoned. Keynes no doubt took this attitude from his friend GE Moore, whose relativist ethic was embraced by his homosexual Cambridge circle.

Geithner uses the word risk to describe ventures that are being made without real capital, or savings behind them. They not just "over-leveraged." They should not have been possible at all. This is because like Keynes he feels that life is a gamble that requires the incentive of big rewards. Like Keynes he feels that debt is justifiable, even necessary, to create those rewards, to get the animal spirits flowing. In Keynesian thinking credit is supposed to create savings, not savings, credit. Similarly demand is supposed to create supply, not productivity, and make possible goods for sale. This is the difference between Keynes and classical economics, the manipulation of so-called demand. It is obvious that under classical assumptions, no one can make a profit, and yet everyone, especially since Keynes, believes profit alone drives the system. When, therefore, the inevitable busts have occurred, they are forced to say, as Geithner said here, that there is some paradox involved, and more regulation is required. Even if that were so, how can a system check itself when the govt always steps in to reward selfish behavior?

Confidence, which was used by my count no less than 41 times between Rose and the secretary in this interview, is synonymous with taking those risks, thus it is believed created along with the demand. But confidence unfortunately suggests to most that some act of faith, or perhaps a few Hail Mary's, will bring about divine forgiveness, a Deus ex Machina, etc. The idea seems often to be like the current attitude regarding self-esteem, which everyone ought to have, no one should impugn, and which can built up by grade inflation, little trophies for participation, and the like. Thus artificially lowering interest rates should build confidence. May I urge that it was just such an attitude that created the moral hazard which caused the misinvestment?

But, in any case, it is not consumer confidence the central bankers and Treasury chiefs are interested in, but investor confidence, the fear always being that there will be a run on the dollar. I think, too, that they are interested in saving these big banks not because they are important to the real economy, but pivotal to the US' position as a financial hub, and therefore, to its position as a world power. They know full well what would happen if China cashed in its chips, and/or they and the Saudi's stopped subsidizing us. And this kind of wheeling and dealing requires the full faith and credit not just of a few big banks, but of the US government. So I think saying that these institutions are necessary to general recovery is a bogus argument, just as much as suggesting, as Keynes repeatedly did, that recovery was just a state of mind.

So Mr Geithner says: "But if you look at how they are acting and behaving, generally when people are concerned about risk, the dollar has been stronger, and there's been money flowing into treasuries and U.S. financial assets. And that's a sign of relative strength and confidence in this financial system, justifiably so." As Hume said more than two centuries ago, the public have no choice but to support the national debt, and so it is with ppl who hold dollars. But it is not a sign of strength, rather of decline, like putting more money in a Ponzi scheme. No doubt the secretary finds this, too, paradoxical.

There is no paradox of thrift, it is a matter of productivity, like interest rates. Interest rates decline naturally when productivity increases and less input is required to make more output. At the same time less thrift (or saving) is required. Keynesians fail to appreciate this simple equation. Poor ppl, who are not very productive necessarily require more savings, than those who are more productive. There is nothing more credit can do to improve this situation, but it will help if poor people do not try to sell exclusively to those with established money, but rather to themselves. We have been living off the poor around the world for decades now, and it is neither good for them, nor for ourselves. But Keynesians refuse to recognize moral hazard at all. Indeed banks are not useful because ppl have confidence in them, like that of Dickens' Mr Merdle, but because they actually contain ppl's savings. Either they do, or they do not. The govt either has income that can support its debt - our money - or it does not. Alexander Hamilton's Bank of the United States was created out of paper promises; we should not 200 yrs later be resorting to this fiction. And no business should be borrowing to meet payroll and normal expenses anyway.

Recovery implies a return to a previous state. I hope that no one seriously wants that, and Geithner, insists they don't, even can't, but I fear that that they either do, or that they have not got it clear in their minds that this crisis did not come about through the machination of an evil genie. It came about through misinvestment encouraged by interest rate manipulations, budget deficits and subsidization by 3rd world nations, who ought rather have been concerned with democratic, free mkt growth in their own countries. Yet here is the secretary saying: "Right now, things are frozen because of that, and because people can't borrow to make these investments. So the way these markets typically work, people have to be able to borrow to make any investments. It's like the way the housing market works. You know, if you had to sell your house in a market where nobody could get a mortgage, the price would be very low. You'd be reluctant to sell, reluctant to move, take a new job." Does he mean to start the housing bubble again to boost these prices? I am not sure lowering interest rates in order to stem house price decline was a good idea either. The loss should have been from the lenders as much as the buyers alright, but it should not have come via the depreciation of everyone's dollars. Any time the govt moves in to cushion the consequences of ill-advised actions it is probably not doing any good for the long-term.

I believe something else to be at work behind the scenes of this tragedy, and that is the domestic agenda, which, I feel, is what largely driving the admin to take on so much at once, and I suspect the president is afraid that his program will not be supported, nor perhaps even, effective, without inflation, or at least if not done in a time frame contemporaneous with the fear of "not doing enough." In other words he no longer believes that social and economic reform is central to recovery, if indeed he ever did, because I do not think this was ever in the minds of the Clintonians and the remaining Reaganites, who together make up the congressional majority. So instead of reform driving productivity, driving recovery, yielding confidence, the order is reversed: more risk is taken, increasing confidence, bringing recovery, allowing reform.

But what needs to be reformed? Is it not precisely the attitude in question? Is it not the permissiveness, the political correctness, the self-flagellation that makes an entire nation act like abused spouses, repressed minorities and molested children? Would not such a people seek consolation rather in failure? Is it not precisely that, which means two days, two weeks, two years, or even two decades from now the same sort of ppl will be saying we needed to do more, etc. Failure is always an excellent excuse for more failure. Would you give an alcoholic a gallon of hooch to help him sober up? This is simply self-deception; avoiding facing the consequences of one's actions. Keynesians always fall back on claims when their measures fail that not enough was done, as in their reading of Japan's debacle, which was very similar to ours, both as to cause and remedy. When Charlie asked him if the admin was too wedded to a Wall St mentality, all Geithner could say is that time will tell, and then shifted immediately into a recitation of how "aggressive" they have been.

Confidence - consumer confidence, at least - could have been far better bolstered by dealing openly with these 19 large banks from the start. And then honestly with American ppl. There is a clear, well-researched and obvious program to reform this country: 1. require 100% bank reserves; 2. scrap the absurd tax code for a flat tax; 3. scrap the pension mess for a system of national savings accounts; 4. scrap the heathcare system(?) for managed care along the lines of the Japanese or Swiss; 5. improve the efficient use of resources and prevent the abuse of them by similar cap-and-trade programs; and, not least, 6. pass a balanced budget amendment. These measures, and IMHO, these measures alone, will turn this country around and anyone who opposes them can be reasonably considered to have selfishness as the reason. Besides that, I think any political party embracing these measures will undoubtedly win the overwhelming support of the American ppl at present. A sensible program for this country would reduce its population not seek to increase it, increase that population's productivity, and restore natural complexity and balance, which is being destroyed by ill-considered attempts to advance economic "growth."

Now the object of this interview was to jawbone specifically the idea that these so-called stress tests should boost confidence. This was clear from the secretary's response when it was brought up, and because we ought to know by now that the Obama admin does nothing by accident. The stress tests seem to have been designed in part as a means to get banks to raise capital, thus forcing them to recognize they have losses they have so far refused to, but in many cases that will mean changing preferred stock, a lot of which is owned by the taxpayers under TARP, to common stock or equity, which means that this is, in part at least, a backhanded way for the govt to buy toxic assets. Geithner says the govt will not want to do that, but no one in this process has told them they had to do anything with the toxic assets. Bernanke's statement was to me far more negative, stressing only these 19 banks would survive another downturn. I do not see how the conclusion can be that therefore no one need be concerned. By one source, these large banks are expected to lose nearly $1 trillion in this crisis, $600 billion of it still to come. Geithner says their hoarding deepened the recession, but others say, rightly IMHO, that their unwarranted support has deepened it. This episode then seems less an exercise in transparency than in once again trying to boost investor confidence. The irony is that aside from a very few banks and mortgage lenders there was never any real problem with our banking system. I agree especially therefore with those who think they should be made to pay the price for their mistakes. I do not at all see how as the secretary put it: "...we want to make sure that these [bail-out] programs are priced so that when conditions normalize, it's not economic for people to use them..." or how "it's like insurance, again, it's like insurance, precautionary insurance against the risk of a deeper recession. That will help make recovery more likely, because then banks won't have to keep behaving against the possibility that they have to protect themselves against things getting worse."

Nor can I agree with the proposition that executive pay pkgs were the root cause of this malfeasance. It takes two to tango. The question is whether the American ppl can have any more virtue than Wall St or the govt that supports it given the kind of economic notions advanced here.

ShalomFreedman  05/07/2009 10:54 PM Report

There are many important questions Geithner was not asked to address. He did not speak about how areas of the country which have been devastated by the economic crisis, mainly the Midwest, are going to be revitalized. He did not really speak about the United States relation to other economies in the world. He did not really consider how the U.S. will deal with the Trade Deficit issue which many believe one of the roots of the present global crisis. He did speak about the paradox of asking the American people who need to in the long- term save more, to resume spending now in a more vigorous way. But he did not really give a sense of how this will all work out. He and Charlie Rose stuck to the practical steps the government is taking now to get us out of the crisis. He also did not speak of any of his colleagues but repeatedly referred to the President's concerns and priorities. He of course expressed outrage and at the same time understanding of the fact that many of those who caused the crisis are now being supplied with funds by the government.

On the whole however once again he appeared as confident, in charge, cautious, and responsible.

tartufe  05/07/2009 05:07 PM Report

Here's the opinion sans the drawing, from the mirco link below.

75th and current United States Secretary of the Treasury. I'm pretty sure I didn't understand most if not all of what he said. Though it was interesting that he started smirking and lighting up when he started talking about the moral outrage and absurdity of bailing out companies that caused the mess were in. It's like even he can't believe what he was saying.

mirco  05/07/2009 02:57 PM Report

http://mircochen.blogspot.com/2009/05/timothy-geithner.html

A drawing and opinion

ShalomFreedman  05/07/2009 01:53 PM Report

Timothy Geitner sounds more confident and assured now than he had on previous appearances on Charlie Rose. He speaks more calmly. He also speaks in a clear and straightforward way. He also shows a great deal of caution and it seems to me balanced judgment. He indicates that while there are real signs that the pace of the downturn is slowing down the Economy is far from having turned the corner.

He expresses confidence in the banking system as a whole. It is clear that this crisis is too a crisis of confidence, and his manner in this show works too in the right direction.

Geithner is uncommited about a second stimulus package. He also indicates that he believes that Money will be received back from the big banks, an estimated twenty- five billion.

All in all his appearance here, and the sense he gives of the work the Government is doing is impressive.

tartufe  05/07/2009 01:21 PM Report

Shamelessly stolen from REMant's post of 5/6/09 11:25PM, Future of Trade in the Global Economy. Rec, read it all.

Dominance in Mant's ref was (initially) to sports teams. For this ref. shift to financial institutions that fractured the system.

"This dominance reinforces for enthusiasts the idea of a natural aristocracy, or Social Darwinism, in which they attribute their fraud to excellence, at least until asset bubbles burst, and Ponzi schemes unravel. Another instance is charter schools, and colleges like Princeton, which self-select and leave poorer students at the remaining public schools, and then claim to be better.

"The most disturbing thing about recent talk of recoveries, etc, is that it reveals that not only these ppl, but many ordinary ones are unwilling to seize the present as an opportunity for reform, but only want a restoration of business as usual. And, unfortunately, despite many remarks to the contrary, that seems to include the president."

Ricardo_Amaral  05/07/2009 01:02 PM Report

My screen name on the Elite Trader Economics Forum is SouthAmerica. I would like to suggest that Tim Geithner’s economic team should take the time and read the enclosed threads on that forum:

1) Another "Sucker's Rally"

http://www.elitetrader.com/vb/showthread.php?s=&threadid=157630

May 4, 2009

SouthAmerica: …Regarding the current “Sucker’s Rally”

The current Sucker’s Rally started when a Pandit internal memo at Citigroup was leaked to the press saying that things were looking good at Citigroup in the first 2 months of 2009 as long as they did not take in consideration the write offs and other losses.

Suddenly all the banks were doing great – mainly after the FASB changed the accounting rules and the Banks were allowed to use the new Mickey Mouse accounting rules.

The market went up even more when the results for the first quarter in many companies were better than Wall Street had estimated. These results were achieved by cost reductions and massive layoffs and not by market and product improvements in most of these businesses.

…I don’t agree with Warren Buffett regarding the financial shape of the U.S. Zombie banks including Wells Fargo.

The Zombie banks such as Citigroup and Bank of America among others should be nationalized immediately.

If Wells Fargo was in such a great shape then why Warren Buffett was going all over the place at the end of 2008 pushing of the $ 700 billion bank Bailout in which Wells Fargo got $ 25 billion dollars as their share of the piece of the action.

Mr. Buffett said: “ losses at Citigroup Inc. have distorted the public perception of U.S. banks…”

The public’s negative perception regarding the major U.S. banks are not distorted by Citigroup losses; the public’s negative perception of the major U.S. Zombie banks are rooted on “Mickey Mouse” accounting procedures being used by the banks and the usual off balance sheet shenanigans.

I bet that without the Mickey Mouse accounting principles being used by the banks and the other shenanigans that they play with the numbers – if all that BS is eliminated then the real numbers probably would be scary – in plain English; most of these banking institutions would be insolvent and bankrupt.

If you are investing on these Zombie banks today then you can consider yourself to be a potential customer for another Bernie Maddoff in the future since you are a big fool and deserve to lose all your money.

*****

2) General Motors and Ford

http://www.elitetrader.com/vb/showthread.php?s=&threadid=162796

***

3) The U.S. Supreme Court and economics

http://www.elitetrader.com/vb/showthread.php?s=&threadid=162624

***

4) Lou Dobbs on CNN - about China

http://www.elitetrader.com/vb/showthread.php?s=&threadid=163070

***

5) Alan Greenspan speech on 9/27/05 - US Economic Flexibility - and Analysis

http://www.elitetrader.com/vb/showthread.php?s=&threadid=56301

.

tartufe  05/07/2009 01:00 PM Report

Mr Jerry - that's an enviable posit to be able to make, that "Mr. Geithner took the time to explain the situation fully and thoughtfully." Were I so well equipped perhaps dispelling my ignorance would do the same for my feeling hosed - as well as my progeny.

If you are not already you should apply to be a functionary within Geithner's stable. He doubtless would be pleased with unchallenging help (despite lip-service to the contrary).

martie  05/07/2009 12:45 PM Report

Thank you for this hour-long interview with Timothy Geithler and for taking the time to discuss almost every facet of our economy and the questions that have been on my mind. I am confident in the Obama Administration's approach. Keep up the great work, Charlie Rose!

JerryKemp_Founder  05/07/2009 12:37 PM Report

Mr. Geithner took the time to explain the situation fully and thoughtfully. It's unfortunate that most Americans have too little financial knowledge to comprehend a straight-forward conversation devoid of hype, unfettered emotion and sensationalism.

tartufe  05/07/2009 12:16 PM Report

Little Timmy’s full of feces (edited for monitors sensibilities of expunged version). The large banks, a la Citibank et al, should fail - even encouraged to fail. Maybe intentionally destroyed is more on point. Systemic malignancies should be excised. The moral hazard will be guaranteed if not. Confidence in the system will be enhanced with corrective retribution that’s public, visible and trumpeted around the world. And voila, the rest of the system will prevail - and rightly so. And more RIGHTEOUSLY so. If the recovery is going to be slow anyway whose to say the system will notice. Plus I’m betting the leveraged paper is largely held by and between the perps themselves. So letting them devour each others (legal) livers would be cathartic for the system and the world. The big banks are credit card predators anyway, which without their lobbying pimps would help correct some cc abuses as well.

Our financial wise-guys took the world’s financial system down with their too clever by fractions financial gimmickry. The misery already inflicted is enough to deserve proportional retribution. (Geithner was particularly slimy when he implied that Europe was equally culpable. BS it was our own Harvard grown wise-guys.) Bernie Madoff is a ‘soft’ example of how the wise-guys should be treated.

Indeed, the difference is minimal as far as malfeasance. The CEOs and complicit enabling pols are all equally detrimental to the system. And as an aside, Geithner is culpable on two counts: 1. As a Treasury official he had to be aware that a bubble was in progress and he’s being disingenuous to claim otherwise (or doesn’t/didn’t qualify for his position), and 2. His tax evasion as an honest mistake again exposes a venality that’s at the heart of the problem and a disqualifier - especially for his office. REEKS!

And the fact that some are trying to repay the bailouts shrieks that Paulson’s plan was one of the biggest heists in history. Ill thought out and impetuous preemption to save his cronies backsides from themselves.

It’s a crock of feces (again edited for monitors sensibilities of expunged version), that I can’t buy, that the perpetrators are just soooo important that they have to be rewarded rather held accountable - proportional to the damage inflicted.

Serious, proportional fines and jail time are the only redeeming and ultimately confidence building actions that will suffice.

Wont happen. The system is too corroded with venal whores and controlling oligarches.

[The unedited blue language is a refuge of the ill-equipped, but outraged. Why do I feel so alone? As doodahdaze says, its about fairness. None on the horizon.]

Gray  05/07/2009 11:24 AM Report

This obviously is a very complex set of circumstances and there are a lot of politicized ways for these well laid plans to get messed up. That said, Timothy Geithner and his associates are bringing some very intelligent processes to the clean up of this economic mess and I hope they will continue to listen and refine those processes as we go along. One question I would like an answer to, that I have not yet heard anyone examine, is this: When the government invested in these financial and industrial institutions, many of their stock valuations were at record lows. With the recent improvements in the stock market, I am wondering how much the valuation of these government investments has increased, so far, and how that improved valuation has affected the governments position, relative to the deficit?

doodahdaze  05/07/2009 09:28 AM Report

If the "path" works, then he will be America's new modern Daniel Boone. It's all about motivation; What motivates people (in a positive, civil way)?. When you filter out all the complex dynamics, it all comes down to "Fairness"; Peoples' "perception" of fairness...

doodahdaze  05/07/2009 08:39 AM Report

Well, he is the Doctor. And the Doctor says, "You gonna die."... Unless, of course, you are a fellow "finacial-services" Brother. In which case, if you're used to tap dancing at work, you'll have to get used to tip-toe dancing.