"As the Obama administration completes its examinations of the nation’s largest banks, industry executives are bracing for fights with the government over repayment of bailout money and forced sales of bad mortgages."
"Some of the healthier banks want to pay back their bailout loans to avoid executive pay and other restrictions that come with the money. But the banks are balking at the hefty premium they agreed to pay when they took the money."
"Both large and small banks have pressed the Obama administration to make it less costly for them to exit the bailout program by waiving the right to exercise stock warrants the banks had to grant the government in exchange for the loans. At a meeting last month, the chiefs of three of the largest banks separately asked Mr. Obama to direct the Treasury not to exercise the warrants..."
Labaton, Stephen and Edmund L. Andrews. 2009. "Showdown Seen Between Banks and Regulators." (11 April).
http://www.nytimes.com/2009/04/11/business/economy/11bank.html
My eyes almost fell out of their sockets when I read that piece in the Times earlier this evening. The first thought that occurred to me was how contractually obligated all those corporations seemed to be just a short time ago when the discussion was focused on executive pay. Obama will sooner than we thought have the opportunity to show just what stuff he is made from. I have lost much of the respect that I had had for the man. He seems little different from a DLC Clintonite at this point. Will he ever ask that banks be held accountable for their obligations to the people? Or will he be more concerned with the executives and the stock holders? Obama seems to have too much Chicago Democrat in him. I'd not be too confident that he is willing to "do the right thing." Maybe Spike Lee can be convinced to write him a letter on behalf of Obama's constituents.
ReplyDeleteI posted this just because of the talk of sanctity of contracts during the AIG bruhaha.
ReplyDeleteAs for Obama, you have not signed up for my lottery yet.
This article appears to be thinly-disguised propaganda. An attempt to sell 'the regulators' (like Larry Summers, Geithner and Bair) as having a serious intention to rein in the excesses of the large banks.
ReplyDeleteWhen you read:
"Government officials do not plan to disclose the results for individual banks but may reveal broad results for the entire industry at the end of the month. … Stephanie Cutter, a spokeswoman at the Treasury Department, said it did not comment about the participation of specific banks in the plan or their efforts to exit the program..
and
"...the stress tests of the 19 biggest banks, due to be completed in the next three weeks..... If the test indicates that the losses would leave a bank with too little capital, the bank will have six months to either raise extra money from private investors or get money from the government"
Wow! Wouldn't we like a deal like that for our house and personal debts!
Here's the REAL crux of the article:
"....the new $500 billion to $1 trillion plan that will use public subsidies to encourage private investors to buy mortgage assets. the government’s bailout fund is dwindling, putting the administration in a bind. It is all but certain to need to seek more money from Congress, which wants to see results from existing programs first. The fund is down to its final $134 billion, according to Treasury officials, and is expected to face new requests for money in the coming weeks..."
More and more money. No results apparent after already having spent trillions of public money. Meanwhile thos big welfare-dependent banks are buying up public water assets, land, businesses etc overseas . And they still feel confident enough to object to limits on executive pay etc.
If the above isn't a sign of gutless public regulators I don't know what is.
Then there's talk of even more bank mergers. More concentration of industry power portrayed as the answer to problems when it is, in fact, the CAUSE of them.
ReplyDeleteThe good news is that many in the financial industry are leaving their jobs because of compensation restrictions. The bad news is that these people are most likely the ones who caused the problems and they will be looking for other venues to screw over us again.
ReplyDelete"One set of rules for the gentry another for the commoners."
ReplyDeleteIt has 'ever been so.
Roman Empire or France 1787?
Sounds like France 1791. I'd be more hopeful if we could count on moving to the France 1792-1793 period. Robespierre died for his own sins, but he was only a little too myopic and tended to confuse his friends and enemies. Maybe in the process of seeking real change that distinction becomes lost in the fray.
ReplyDelete