Why is Geitner so determined to bail out his buds @ Citi

his plan it just a hash over of Paulson's rejected plan from last September: reward the miscreants and screw the taxpayer.

I'm done with this Administation.  Just like Clinton, he cavils to Wall Street and sticks it to the middle class. This is not change.

Tags: Citi, Geitner (all tags)



Re: Why is Geitner so determined to bail

No it isn't...  the banks will actually have to realize significant losses under the plan instead of just sitting on them and hoping it gets better...

But, you, like most people, are more interested in punishing banks than reviving the economy....  The latter is more important...

by LordMike 2009-03-22 09:29PM | 0 recs
Re: Why is Geitner so determined to bail

Banks only take losses if the price is below their book value.  Geitner's plan artificially props up the values and has the treasury issuing guarantees for these assets.

Instead of recognizing that citi and BofA are insolvent, his plan treats their assets as if they falsely undervalued.

This crisis has proven that these banks are too big to manage and that repealing the depression era limits on investment bank activity and insurance companies were necessary to protect the financial system from unmanageable risk.

Summers was part of the repeal of these protections. Surprise, he's trying to act like those repeals didn't cause the problems we deal with now.

Stiglitz and Krugman each have plans which recognize the insolvency of a few big banks and reorganize them instead of propping up zombie banks.

by martinlomasney 2009-03-23 03:54AM | 0 recs
Re: Why is Geitner so determined to bail

Why isn't Krugman volunteering to fill one of those treasury posts? Last time I checked, all these Democratic bigwigs were staying home scared because they either don't want to take a paycut or go through a vetting process so that they can serve the country. But if things go well, a lot of them will rush to be in such nice positions so they can network for years after their term.  Don't get me wrong. I am skeptical of Geithner and have no confidence in him. But I am sick of all these Democratic leaning economists complaining without stepping up to the plate. Complaining is for ordinary bloggers like us. Those of us who are not in a position to be hired.

by Pravin 2009-03-23 06:32AM | 0 recs
Krugman hasn't been offered a job. He and Summers

aren't pals?

by martinlomasney 2009-03-23 07:04AM | 0 recs
Actually he was offered a job in Clinton's admin

but turned it down because he wanted to be on the "outside"

by DTOzone 2009-03-23 10:55AM | 0 recs
Make an Argument

not charges.

by Charles Lemos 2009-03-23 12:36AM | 0 recs
Try this one

Geitner proposes that Treasury puts up 7% of the money. FDIC puts up 86% non-recourse debt. Private sector puts up only 7% and gets one-half the profits. Who's got the risk and who's getting the rewards?

What's the price $0.80 on a dollar of face value? $0.50, $0.10?

These few big banks are insolvent. They need to be reorganized, downsized and re-regulated so that their potential future failure cannot pose systemic risk.

Anything else is propping up zombies and delaying the final day of reconning for these irresponsible pirates.


by martinlomasney 2009-03-23 07:19AM | 0 recs


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