Treasury Secretary Brings Political Pressure on Banks

[Exsubmariner]

Nation's Three Largest Banks Team to Create a Rescue Fund of Sorts

So the big three banks are going to "rescue" the credit markets. I think this really pretense for them owning even more of it. That's really and aside, however. What really is interesting is this:

The Tresury Secretary has stepped in to the fray.

This follows the realization that the system, as it stands, cannot fix itself. The fed cannot simply print more money without weakening further what is already weak. A political solution is needed and this seems to fit the bill. Doubtless opportunity for the banks to help smaller lenders will lead to opportunism by the banks to take over those smaller lenders. It seems the motives of government and big business have collided head on with this one.

[adios]

[ QUOTE ]
Nation's Three Largest Banks Team to Create a Rescue Fund of Sorts

So the big three banks are going to "rescue" the credit markets. I think this really pretense for them owning even more of it. That's really and aside, however. What really is interesting is this:

The Tresury Secretary has stepped in to the fray.

This follows the realization that the system, as it stands, cannot fix itself. The fed cannot simply print more money without weakening further what is already weak. A political solution is needed and this seems to fit the bill. Doubtless opportunity for the banks to help smaller lenders will lead to opportunism by the banks to take over those smaller lenders. It seems the motives of government and big business have collided head on with this one.

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I think this is a pre-cursor to another rate cut btw. Anyway in the realm of politics, I've read speculation that the Bush administration has an agenda to wipe out mortgage lenders that are competition to the big banks, leaving the vast majority of mortgage lending in the control of the big banks. This sort of fits in with that speculation I guess.

[tolbiny]

[ QUOTE ]
Nation's Three Largest Banks Team to Create a Rescue Fund of Sorts

So the big three banks are going to "rescue" the credit markets. I think this really pretense for them owning even more of it. That's really and aside, however. What really is interesting is this:

The Tresury Secretary has stepped in to the fray.

This follows the realization that the system, as it stands, cannot fix itself. The fed cannot simply print more money without weakening further what is already weak. A political solution is needed and this seems to fit the bill. Doubtless opportunity for the banks to help smaller lenders will lead to opportunism by the banks to take over those smaller lenders. It seems the motives of government and big business have collided head on with this one.

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Its starting to sound more and more familiar. Instead of passing legislation to try to fix the downturn in the early 1930s Hoover met with the leaders of industry to convinced/pressured them into holding or raising wages or committing resources in one way or another.

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This follows the realization that the system, as it stands, cannot fix itself. The fed cannot simply print more money without weakening further what is already weak. A political solution is needed and this seems to fit the bill.

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The system can fix itself, the issue is the solution is going to be painful though, and if it comes to now it falls on the shoulders of those in power. If it can be stalled another year Bush will be out of office and any collapse can be blamed on the markets not having faith in the next president, or a massive storm system or whatever.

[Exsubmariner]

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The system can fix itself, the issue is the solution is going to be painful though, and if it comes to now it falls on the shoulders of those in power. If it can be stalled another year Bush will be out of office and any collapse can be blamed on the markets not having faith in the next president, or a massive storm system or whatever.



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Point to you, sir. The solution that avoids the pain of the system fixing itself is political.

[Exsubmariner]

I don't know about another rate cut. The ice is pretty thin as it stands and cheaper money would just lead to even more bad loans, delaying but exaserbating the problem later.

I didn't take the step of thinking someone wanted to set the stage for all of this to happen. I think that is quite a leap. Although, prediction and preparation are not out of the equation. I doubt that someone could manipulate the situation (the whole market), though.

[adios]

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I don't know about another rate cut. The ice is pretty thin as it stands and cheaper money would just lead to even more bad loans, delaying but exaserbating the problem later.

I didn't take the step of thinking someone wanted to set the stage for all of this to happen. I think that is quite a leap. Although, prediction and preparation are not out of the equation. I doubt that someone could manipulate the situation (the whole market), though.

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Told ya they were signaling another rate cut. The thing about the "Sub Prime Crises" is that many lenders have had problems with liquidity in funding short term borrowing. Who controls the money available to provide this liquidity for funding short term borrowing?

[Exsubmariner]

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Told ya they were signaling another rate cut. The thing about the "Sub Prime Crises" is that many lenders have had problems with liquidity in funding short term borrowing. Who controls the money available to provide this liquidity for funding short term borrowing?


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Still thinking here that there has been nothing done to resolve the core issue. There are going to be more bad loans and problems are just going to get deeper.

Hope you own some gold. The Fed is doing wonders for the $ value of my pile.

Edit: I think you are effectively predicting here how the Fed would have reacted. I don't think an effective prediction of that reaction is evidence for the "setting the stage," so to speak for that action. Effective prediction of response does not signal intent.

[Zeno]

There is bound to be extra interference, adjusting and meddling in the economy during the run up to a presidential election. Reasons are obvious so no need to harp on that.

On the general front I saw numbers of 3.9 % growth, the dollar hit a new low with its ongoing tug of war with the Euro, and oil is jumpy and exploring new territory at mid $90 a barrel. Things are going grandly. No reason for worry.

On the personal front, my pile of money in an energy fund is up 35% for the year so far, another money pile in a European “500” index fund is up 20% for the year and various international funds are all moving skyward at a steady pace that almost placates my greedy nature.

Wars are looming on the horizon as they always are and always will be, monotheism is still around and doing nicely, the new pope is very Catholic, the Italians are still making top-notch wine, Cuba churns out cigars, and Hillary is adding daily to her hoard of political money to buy the U.S. presidency. Relax exsub and have a beer, the ship is still afloat and manned by wise and prudent people.

-Zeno

[adios]

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There is bound to be extra interference, adjusting and meddling in the economy during the run up to a presidential election. Reasons are obvious so no need to harp on that.

On the general front I saw numbers of 3.9 % growth, the dollar hit a new low with its ongoing tug of war with the Euro, and oil is jumpy and exploring new territory at mid $90 a barrel. Things are going grandly. No reason for worry.

On the personal front, my pile of money in an energy fund is up 35% for the year so far, another money pile in a European “500” index fund is up 20% for the year and various international funds are all moving skyward at a steady pace that almost placates my greedy nature.

Wars are looming on the horizon as they always are and always will be, monotheism is still around and doing nicely, the new pope is very Catholic, the Italians are still making top-notch wine, Cuba churns out cigars, and Hillary is adding daily to her hoard of political money to buy the U.S. presidency. Relax exsub and have a beer, the ship is still afloat and manned by wise and prudent people.

-Zeno

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Awesome post. Also plenty for the markets to be concerned about which means lots more opportunities and a "wall of worry" to climb as well.

[Zeno]

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Awesome post.

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Thanks. I'm off for the weekend so want to get to this out to ya.

And as an added comment: No need to worry, with parxeology you can always construct a New Jerusalem.

-Zeno