The Good News Economist

Treasury Accepts Lowball Price for TARP Warrants

Linus,
Thanks for your papers and these articles raising the awareness. Most of US taxpayers have no idea how valuable these warrants ultimately can be... or even that negotiating is happening on their behalf... thus the lowered payback price. If we can raise the political awareness of these paybacks, the stories may change.
GNE

Banks No Longer in Crisis Mode

@battman,

I don't disagree that the top banks decreased lending. (I have consistently not been an elite(top) bank fan and believe they should be split up and parceled out to the more responsible second tier solid conservative banks)

What I continue to maintain is this...
"overall business lending by *all US banks* was up 12 percent in 2008." The data is very clear on this.

GNE

Banks No Longer in Crisis Mode

@morph366,
As the opening sentence suggests, I am not implying that all is back to normal. I agree that the Fed's job is still difficult, but that doesn't mean they will not be successful.

@ paradigm1974,
Indeed almost all PR firms will concur that appropriate deliberation prior to release of good news is just as important as when then news is negative. One wrong sentence can provoke negativity even when not merited.

@Dustinian,
I too would like to see many of those top teams squirm a bit more. In fact, I'd like to see the mid tier bank execs be given the top jobs... better yet, break up the big banks and divide them up among the top banking teams that have proven the public trust.

@Gary A,
A liquid business is more likely to be solvent than a non-liquid business. However, not all businesses with liquid assets are solvent, and not all solvent businesses have strong liquidity.

@Default 1,
Even Arianna gets it right sometimes. Her quote is right on the mark whether she knows it or not. You may want to have a look at how big residential real estate market is compared to that of commercial.

@Prudent Man,
I disagree with your memory of history. Have a look at this article:
mast-economy.blogspot....
I too was around in the seventies. I really don't see this dip as any different... in fact as that article suggests there is fairly substantial evidence that our current "crisis" has much in common with other historical finance downturns in the past 800 years. (not just 30 years ago)

@mikesa69,
Thanks for reading. A closer look at my profile will reveal my name, my website and my rational for only choosing to cover the good news: the negativity is covered quite well elsewhere...

@WayneinOregon,
Thanks: one of my favorite quotes is "most economists make astrologers look respectable."

@jstratt,
I agree that bank problems still exist. IMHO, your disagreement is a matter of degree. One of the necessary outcomes of the stress tests will be some amount of objectivity in the midst of our subjective terms like "crisis"

@wholesalecd/jay,
Yes, I still "ignorantly" maintain that there really was never a "credit crisis" at *most* banks. Of the over 8000 chartered US banks the crisis was concentrated in the top 20. (A quarter of one percent)... And the total number of banks that have failed since Oct... 37 (not even one half of one percent)

Bank Failures, 2009 Edition: Three and Counting

donzelion
>The regionals will only start to fail once the risks percolate
>through the system - they'll be indirect casualties of the
>excesses brought on by commoditized banking. But make
>no mistake: they will be victims, unless you believe the
>regionals are MORE decoupled from the national economy
>than China, India, and the emerging markets have proven to be.

The regional banks are not decoupled. But if you examine their balance sheets you'll see that they continue to do "banking," not offer stupid financial service clusters in order to manipulate higher returns.

What specific "risks" do you see percolating into the regionals? I respectfully disagree. They will not touch any of that toxic stuff... especially not now....

gne
goodnewseconomist.com

Regional Banks Reject TARP Funding

thannagan,

I totally agree that the TARP was focused on the elite banks. And history will show that those big banks spent tons on lobbying for TARP.

If any handout is still needed, it will be primarily for those elite whose junk stinks to high heaven.

For the most part, the second tiers are steering clear of TARP. The don't have toxic waste on their books that needs a tarpaulin to cover it up...

Bank Failures, 2009 Edition: Three and Counting

Excellent point klarsolo...

In fact let's look at the *rate* of bank failures. It has actually slowed since the big chill back in October and November when it peaked at about 5 banks per month.

Then 3 Banks in December

and now only 3 Banks in January

I'd say this is a quite calm rate of failure.

With respect to most regionals they are doing just fine... In fact have a close look at the regionals and you will see that they are a quite strong and well capitalized, bunch.

Take a look at these 5 that have just flat out refused TARP funding...
mast-economy.blogspot....

I'd like to transplant their management teams to our top 5 banks.
gne