Lawrence York

On PPIP and Geithner's Latest Power Grab (Linkfest)

The Fed and Treasury seek to expand their powers that permit them to annoint the winners and losers rather than letting the free market do so. Intregal to this power grab is letting their constituent banks operate with guarantees from the taxpayer. This is not Capitalism, but a design to control it and the players. What is remarkable is that Geithner's call for more capital assumes that the Fed and Treasury would know when it was necessary. Clearly they failed miserably in the past and have an exceedingly consistent record of missing abuses until they cause crisis. Yes we need reform, but we need to separate regulation from the purse and politics. Geithner's proposal is indeed a power grab and will not fix the fatal flaw of promising safety on inherently risky practices. Banks need to banks not investment banks if they are to offer guarantees backed by the taxpayer.

Geithner's Financial Reform Is Doomed to Fail

Bravo and well stated! Banks, with the Fed and Treasury as their salesforce, want to keep the competitive advantage of placing public money at risk to make profits. It is incredulous that Congress can't or won't see this point. We either need to be a capitalistic system or not and the promise of guarantees by the taxpayer has no role.

Added Debt Won't Rescue the Great American Ponzi Scheme

I think the author is dead on in his assessment that more debt is not the cure of America's financial woes. I would additionally add that US unrealized debt will amplify as the US is forced to repatriate the fruadulent securities it packaged and sold around the world; as GNMA's losses are realized, and as a wave of credit card and auto securitizations go bust. Indeed the solution is also a problem. The big bang will come when the US government completes its transfer of bad debt to the Treasury and the world, en masse, concludes that private securities are the place to be as government guaranteed securities are a complete illusion. The answer then, is a for sale sign--selling US private sector assets to foreigners in any amount they desire.

U.S. Debt Watch: Paths to Repudiation

It is unfortunately the case but we have time. China our largest creditor is trapped--one the one hand they know it and don't like being overconcentrated in US Treasuries nor getting puny interest rates and on the other until their own economic crisis dissapates they can not afford to let their currency appreciate. The US therefore has time but the clock is ticking. First order of business is to stablize the economy and stop the job losses. Second order is to create jobs through small business and circumvent the money center banks by direct lending to small businesses. Thirdly we must build confidence by working together. Hearing the rebuttal of Obama's address and knowing the Republican agenda of keeping dysfunction until the 2010 elections, I think the author is correct but would say the probability is greatest for hyper inflation to pay off our debt in cheap dollars. With this plan the Congress can still bring home the bacon to their constituencies.

Is the $700 Billion Really for Bailing Out the Fed?

I don't think it is necesary to believe in a conspiracy to follow the thread of the position the Fed has put itself into by accepting crap as collateral for real taxpayer money. The Fed needs a bailout and is recharacterizing Treasury's Bailout as one for the banks who should've already have paid the Fed back. The plan is to overpay to give banks capital again in exchange for the securities the Fed needs to give back. I think this accounts for why the original proposal was for no oversight and no court redress when they were found out.