mlyn

Wall Street's Response to Obama's Economic Policy

The criticisms are that his "plan" is just too general; nothing substantive to hang a hat on; no specifics, etc., etc., etc.

Has anyone ever thought that the intent of his "plan," regardless of the stock market, is some kind of message to other players like bondholders or sovereign wealth funds? Can one possibly imagine that the economic team is trying to engineer some kind of reaction outside of the expected Wall St. media reaction he is getting now?

The Fed and the Treasury would like nothing more than the U.S. dollar to devalue or, put the other way, have other currencies revalue up in relation to the U.S. dollar.

Instead of Treasury nationalizing the banking system, perhaps it wants Wall St to decide to go into Chapter 11 or something else. Wall St. had the expectation that it was going to be "bailed out" by taxpayers' money, and surprise, surprise.

I'm only speculating because I, for now, cannot agree that the economic team is "clueless." Obviously it is risky that the econ team will achieve "spring cleaning" it wants considering all the despairing "fall out" in the market and media.

I agree with the author, but only time will tell what the outcome will be.


On Feb 11 09:26 AM kelm wrote:

> Your first hint that there is no substance to the "plan" is when
> Geithner's first concrete step in his speech was setting up a website.
> I have lost count of the number of instances i corporate America
> where I have seen that tactic used. It ALWAYS means they have nothing
> concrete.
>
> Yes, better transparency is necessary. But the crux of the problem
> is - fix the banks. Fix means - exactly what are we doing to get
> all the bad banks closed down or restructured in some defined period
> of time. Tell me how you'll communicate your success after you've
> told me what EXACTLY you are doing and how EXACTLY it will solve
> the problem. Don't kid yourselves. If those details don't exist then
> there is no plan in any meaningful sense.
>
> Geithner was supposed to present a plan to fix the banking system.
> A plan means details not vague generalities. At best you could call
> it a strategy but it is the same strategy that Japan followed to
> their continuing detriment.
>
> The Treasury's "plan" put's America in an even worse posture than
> we were in before and will greatly prolong the crisis.

Wall Street's Response to Obama's Economic Policy

The criticisms are that his "plan" is just too general; nothing substantive to hang a hat on; no specifics, etc., etc., etc.

Has anyone ever thought that the intent of his "plan," regardless of the stock market, is some kind of message to other players like bondholders or sovereign wealth funds? Can one possibly imagine that the economic team is trying to engineer some kind of reaction outside of the expected Wall St. media reaction he is getting now?

The Fed and the Treasury would like nothing more than the U.S. dollar to devalue or, put the other way, have other currencies revalue up in relation to the U.S. dollar.

Instead of Treasury nationalizing the banking system, perhaps it wants Wall St to decide to go into Chapter 11 or something else. Wall St. had the expectation that it was going to be "bailed out" by taxpayers' money, and surprise, surprise.

I'm only speculating because I, for now, cannot agree that the economic team is "clueless." Obviously it is risky that the econ team will achieve "spring cleaning" it wants considering all the despairing "fall out" in the market and media.

I agree with the author, but only time will tell what the outcome will be.


On Feb 11 09:26 AM kelm wrote:

> Your first hint that there is no substance to the "plan" is when
> Geithner's first concrete step in his speech was setting up a website.
> I have lost count of the number of instances i corporate America
> where I have seen that tactic used. It ALWAYS means they have nothing
> concrete.
>
> Yes, better transparency is necessary. But the crux of the problem
> is - fix the banks. Fix means - exactly what are we doing to get
> all the bad banks closed down or restructured in some defined period
> of time. Tell me how you'll communicate your success after you've
> told me what EXACTLY you are doing and how EXACTLY it will solve
> the problem. Don't kid yourselves. If those details don't exist then
> there is no plan in any meaningful sense.
>
> Geithner was supposed to present a plan to fix the banking system.
> A plan means details not vague generalities. At best you could call
> it a strategy but it is the same strategy that Japan followed to
> their continuing detriment.
>
> The Treasury's "plan" put's America in an even worse posture than
> we were in before and will greatly prolong the crisis.

Madoff Hearings Pull Down the Market

Since the regulatory agencies appear to be incompetent, here is a good use of TARP money: Give them out to people like H. Markopolos to do the investigatory work. He can employ many of the unemployed Wall Streeters who have a better nose for fraud than the SEC. Compensation might be a retaining fee, with bonuses or a percentage if they prove a ponzi or naked shorts, or some other fraudulent scheme before the SEC. Thoughts on this?

Confessions of an Austrian Economist

Since fiscal stimulus appears inevitable, a better and rapid stimulus might be in buying commodities for reserves like base metals, oil, natural gas, etc. because they are cheap now. Long term infrastructure completion takes too long for a fiscal impact.

Economic Outlook: Is It Safe?

Anyone who is anti-government based solely on ideology had better explain the bloated $600 billion pentagon budget, the two wars which are off-balance sheet.

Let's hope we finally get a government budget that "spreads the wealth" to transportation, alternative energy, infrastructure, science and technology, education and health care.

I.O.U.S.A.

Like IThinkBig, I also believe a risk event will push us over the precipice. I think Buffet did not answer well the question about the U.S. dollar. He said something about foreigners can sell us back our dollars or sell to some other country as though it has no impact on value. I don't think people understand what it means to have the international reserve currency; it has its benefits but we've also abused our responsibility. A major risk event is when/if the U.S. dollar is dumped for another currency as the reserve currency like the euro. As it is, Russia wants to dump Fannie and Freddie shares; a Chinese economist says that the loss of Fannie and Freddie would change the international financial system . . . that means the end of the U.S. dollar as the reserve currency.