Obama Dials Down Wall Street Criticism

Wall Street Journal:

WASHINGTON--The Obama administration, after months of criticizing Wall Street, has been scrambling to woo top bankers and financiers to back its latest bailout plan.

In recent days, in spite of public furor over huge bonuses paid at American International Group Inc., the administration has concluded that it needs the private sector to play a central role in fixing the economy. So over the weekend, the White House worked to tone down its Wall Street bashing and to win support from top bankers for the bailout plan announced Monday, which will rely on public-private investments to soak up toxic assets.

Read the whole story: Wall Street Journal

Comments

[PhilipTaylor]

Spector does NOT want to Help THE 99.9% of Americans NOT on Wall Street?

WS Banks do NOT help Main Street!

This is NOT "Rocket Science!"

Isolate WS Banks like a "Cancer" and build Credit Flows, "like Bypass Surgery", directly to Americans from Credit Unions, Community Banks, & Government Bank at Low Rates!

[watchTVgetSTUPID]

SPECULATOR's DREAM

Buy toxic assets for pennies on the dollar by letting the government's FDIC fund pay for it when it fails.

Say hello to the destruction of the FDIC and he dollar.

[invisihand]

Is anyone else sick of hearing the "too big to fail" mantra? The progression that US (and Int'l, of course) corporations have taken over the last 20-30 years is amazing. From breaking up the baby Bells to the mega merger consolidation frenzy of the last 15+ years, there is no doubt that the "too big to fail" syndrome is by design.

This all sums up to be taxation without representation.

[VivaZapata]

yes. i am sick of that mantra and all the other lame excuses for this sell out to wall street. what the polls fail to see is that these greedy pigs do not care about the good of the country. they will continue to play the game they know which is to get around any sense of responsibility to humanity and the earth for their own greedy pursuits.

To satisfy rampage, let me emphasize that this is my opinion, which is obvious, but he needs that kind of clarification.

To CJ1957 who seems to think that the interests of Wall Street and Main Street are intertwined, I will only repeat, "yes. while the phony boom was exploding on wall street, they used a better grade of plywood to board up the storefronts on Main Street."

[Michael Ashby]

Yes, and by the time the hogs are fully fed we will be so broke there won't be any money to fix our infrustructure. That is the really sad part of this.

Mr Obama is blowing it all on Wall Street. And they will survive, I never had any doubt of that. But he is helping them so much and not helping workers at all, not even removing regulations that hurt American workers like visa programs that were created during the good old days of the bubble....­nothing.

So there will be a power vacuum when this is over and only Wall Street will be able to fill it.

[ProudMormon]

Bringing in hundreds of thousands of skilled competitors from overseas is just natural globalist extension of the anti-success and anti-rich Democratic bent.

You see, here in this country, it's the corporate executives that are up on a pedestal, making far more money than they deserve. But on a global scale, it's Americans that are on that pedestal, and Democrats have a natural inclination to try to right that "wrong" by bringing millions here and trying to force us to revert to the global mean.

That's the natural global conclusion of a belief that success is undeserved, and unearned.

[watchTVgetSTUPID]

To big to fail should be for the dollar ... but now it is to hollowed out to survive. Wait for China to ull the plug soon

[rughead23]

With citizens being asked to volunteer their non- working hours to restoring America's volunteer work force, shouldn't forgoing the merry - go - round of compenstaion bonuses be standard for such a here - to - now suspect institution as the financial institution. Ask my opinion, I feel like the monetary system was set up like bowling pins to be propped up and knocked down with one fell swoop, to be reinfused with sed cash to perpetuate a cyclical nature of passing the illusive buck, much like a pyramid scheme....­.short selling being the number one culprit and monetary "Fire Sale" ringing as true as Dick Clark's rockin' New Year's Eve countdown from 10 to 1. I Feel for NYC being Literally "Short Sold" in Manhatten as Sam Bee reported especiallly as the post trauma of 911 is still as near as 7 years and I imagine on the tips of many tongues in the form of anti - depressant pills. We could see the plumes of smoke billowing from here outside Philadelphia, and looking back I feel like a part of my independence was stolen having as much love for New York as anyone.

[PhilipTaylor]

So Lets help the Rest of America, the 99.9% that is not Wall Street!

This is not "rocket science" even though Wall Street wants us to think it is!

The only complexity is how the Banks are linked together!

We could isolate them like the cancer they are and build a Strong Credit Flow directly to the 99.9% of America outside the 8 Wall Street Banks and AIG!

With a little work and funding, like a Bypass Surgeon does everyday, we can go around Wall Street!

We have Credit Unions, Community Banks, and the Government can lend directly to consumers and businesses at much better rates if the funding was flowing to these sources.

Wall Street is not the "HEART OR BRAIN" of this Country and should be BYPASSED until its cleaned OUT and regulated!

$1 to Main Street does not equal $1,000 to Wall Street!

Fund Credit Unions, Community Banks, and OPEN up Credit FLOW from the Government to Consumers and Business on Main Street, the 99.9% of America that matters!

Print a Credit Currency against the Government's guarantee to reduce DEBTS!

[ProudMormon]

The government can only lend at "much better rates" if they ignore the cost of inevitable loan defaults.

Most government backed mortgages have a 0.5% or higher interest premium compared to private loans to help cover defaults. It's the public equivalent of private mortgage insurance (PMI).

I wonder how much of this "credit freeze" the pundits say we're in is caused by banks lacking the expertise to adequately calculate loan risk. They've been partying for so long, just handing off their loans to either Fannie/Freddie or bundling them into MBSs where they don't have to bear the risk of default, that perhaps they've forgotten how to do it.

Most of these big banks never wanted to make loans and hold them anyway. It's the small credit unions and community banks that do that. They're the only ones that care whether a borrower is capable of carrying the loan over its entire loan period, because they continue to hold the loans.

The government approach hurts the good banks and good borrowers at the expense of the bad banks and bad borrowers. Why should I be forced to pay a 0.5%-1% interest rate premium so that the government can drive lending standards into the toilet and push their social engineering?

[PhilipTaylor]

So you are saying that Banks do not take massive CUTS of EVERY LOAN to pay Massive INCOMES and CHRISTMAS BONUSES of $10 to $100 Million!

I did not know that since I thought WS People make 400 times what the Average American does!

WS BANKS = INEQUITY and INJUSTICE and MASSIVE INTEREST RATES +TRICKS

Banks also “BUY” Congress with 5,000 $1 Million Payments over TEN YEARS!

That is $3.5 Million per Congressional Member on average every four YEARS - ON AVERAGE with lots more to the Members who make committee decisions on Wall Street!

Give some LOGIC that “HOLDS WATER!”

[Carolab]

Underwriting restrictions for Fannie Mae are much more strict than before. Allowable seller contributions, etc. are carefully verified. I just went through qualification with a buyer, Fannie Mae was extremely careful about how much the borrower had to bring to the table and the sources of that money and any seller concessions. When you obtain a VA Loan, lenders are not allowed to make you pay the PMI. However, if you apply for an FHA Loan or conventional loan, you have to pay the PMI. Borrowers in the existing FHA program pay an up-front premium of a 1.5 percent and annual premiums of 0.5 percent. FHA is the only government agency that operates entirely from its self-generated income and costs the taxpayers nothing. The proceeds from the mortgage insurance paid by the homeowners are captured in an account that is used to operate the program entirely. The Homeowners Protection Act specifies different requirements for loans classified as "high-risk­." Although the HPA does not provide the standards for what constitutes a "high risk" loan, it permits Fannie Mae and Freddie Mac to issue guidance for mortgages that conform to secondary market loan limits. For non-conforming mortgages, the lender may designate mortgage loans as "high risk."

[monicaangela]

Does anybody have a link to the original language that was included in the Henry Paulson three page Tarp document. The language in that document is the key to much of what is happening, and why it's happening. I can't seem to find it on the web anymore.

[OrbitOne]

Hank might have a copy, monica. :)

[monicaangela]

Good, call him for me. 0 ;-)

[DACC]

Check his resume. He was not a Constitutional Law Professor.­..
Reply Favorite Flag as abusive Posted 08:38 AM on 03/24/2009 (as posted by ctji1957)
Funny, Harvard Law School refers to him that way.
http://www.factcheck.org/askfactcheck/was_barack_obama_really_a_constitutional_law.html

[DACC]

Correction: Chicago Law School

[Carolab]

He taught a class devoted to voting rights, as I recall.

[oneeyedodin]

Aint Fox a peach?
Mock Canadian soldiers serving and dieing in Afghanistan.
How to win friends eh?
Jackassb@sturds

[marka]

If America emerges from this mess without engaging in significant reforms to our economic system we will repeat each and every error again.

[PATina]

Yup !

[CostaDelBarto]

One of the errors in this case was a military decision to invade Iraq, a decision which has cost the US in every respect. Money, international standing. Be nice if that wasn't so easy to repeat, either.

[CarolinaDem]

This is picky, but maybe important since we need to get some serious truth out of our military. It was not a 'military' decision to use the military that way. But did they offer adequate professional military advice about what it was going to mean? Heck no. Our brass proved either stupid or corrupt just like everybody else except me. no, me too.

[OrbitOne]

Unless you can change human nature, that will always be the case.

[whatsthatsound]

Nonsense.

[rampage]

I am fairly certain reforms are coming.

[VivaZapata]

the formula of saving zombie banks through huge public funding is a proven failure. you open up the government largess to them; they spike the equities market; they pull out; they buy commodities and the people are left with the pile of steamers. capitalism, like its soviet counterpart, has already failed. what we're seeing is the propping up of a decrepit, dying old man on very shaky, brittle sticks.

[rampage]

Your opinion, nothing more.

[VivaZapata]

isn't it more than my opinion that the zombie banks would have already gone under had the bailout not taken place. wasn't that the opinion of bernanke, paulson, and now geithner? to me that sounds like failure.

to cjt1957: on the issue of saving trying to AIG and the Wall Street banks, yes. I believe Obama got it wrong. I also believe he had no choice. I don't think any president has had any real control over these financial matters; it's all just a big carny show. step right up. get your toxic assets. it's good for you.

[cjt1957]

So Obama got it wrong?

[bilmardre]

Yes, he's to blame for global warming too.

[bilmardre]

Remember back when the market was falling and pundits were exclaiming this effects people on main street because everyone has a 401k plan?
Now the market is rising and the pundits are saying, is this just a plan that benefits wall street, whats in it for main street?

Incredible.

[cjt1957]

Wall street is Main street. They work in tandem...

[monicaangela]

LOL !!!

[VivaZapata]

yes. while the phony boom was exploding on wall street, they used a better grade of plywood to board up the storefronts on Main Street.

[monicaangela]

Did those 401k's go back to where they were when this started? Until that happens, main street is still the loser, and i don't see the 401k's being replenished any time soon.

[cjt1957]

The 401's will be back when Wall street is back. They work together..­..

[bilmardre]

So it's bad when it goes down, and it's not good when it goes up.
Got it.

[rampage]

Point taken. The MSM stirs shlt up, it's what they do.

[freedomitchy]

A glimmer of optimism, this recycled Bush, Paulson plan may do some good in the short run and we all know Wall Street only looks at the short run. And besides, we all know that all recycling is good. But, will make things worse in the long run. A lot of the run up was investors covering shorts.

[whistleofworth]

In the long term there will be regulation­s...there will be accountabi­lity...thi­s is "stablizing the patient" part...and I am glad u r thinking long term...I honestly believe President Obama is with u on that.

[cjt1957]

The Shorts is a large factor in gettin us where we are. Bring back they Up Tick Rule....

[freedomitchy]

Unquestionably, bring back the up tick rule. Why doesn't Obama do it?

[PhilipTaylor]

This is not "rocket science" even though Wall Street wants us to think it is!

The only complexity is how the Banks are linked together!

We could isolate them like the c@ncer they are and build a Strong Credit Flow directly to the 99.9% of America outside the 8 Wall Street Banks and AIG!

With a little work and funding, like a Bypass Surgeon does everyday, we can go around Wall Street!

We have Credit Unions, Community Banks, and the Government can lend directly to consumers and businesses at much better rates if the funding was flowing to these sources.

Wall Street is not the "HEART OR BRAIN" of this Country and should be BYPASSED until its cleaned OUT and regulated!

$1 to Main Street does not equal $1,000 to Wall Street!

Fund Credit Unions, Community Banks, and OPEN up Credit FLOW from the Government to Consumers and Business on Main Street, the 99.9% of America that matters!

[monicaangela]

Bingo !!

[scooperss]

If only someone would listen.

[PATina]

Yup !

[whatsthatsound]

Bingo! I really like the metaphor of a bypass operation.

[Carolab]

What we need to bypass is the FED, like FDR did with the Reconstruction Finance Corporation.

http://eh.net/encyclopedia/article/butkiewicz.finance.corp.reconstruction

[monicaangela]

I still don't see why the government can't take the money it is loaning/giving to banks and other financial agencies, and set up a loan/grant agency and get credit flowing by loaning to responsible citizens and businesses. Why give the money to the criminal and expect the criminal to stop committing crimes?

[cjt1957]

There are a lot of people that are in trouble. They did not document income for loans. They lied about their income. They did not stop the bankers that made faulse statements on their behalf. They kept borrowing from their home equity to pay other bills they could not afford. They had criminals in government like Barney Frank and Chris Dodd "giving" them the "right" to home ownership. They acted in an irresponsible manner with thier money.
It is much easier to moniter the few banks and lending institutions that are criminal, like Freddie and Fannie, than to look after the thousands of individual criminals they helped get us here as well.

[monicaangela]

It appears that in your analogy, the bankers who are fiduciaries of the money they are loaning out had no responsiblitiy in this. The banks have all of the information needed to be able to check if a person is telling the truth on their application or not. If they knew they were lieing and gave them the loan anyway, how can you blame it on the person applying for the loan only. Some of those people you claim lied about their documentation, were encouraged to do so by unscrupulous brokers, I even know some who gave the correct documentation only to find out that their information had been changed on their loan. There are many cases in court today in reference to my last point. Educate yourself, this has been a scheme on a grand scale, pulled off by the banks, wall street, and financial institutions.

[ThunderclapNewman]

Because A) the government shouldn't be in the retail banking business, and B) that idea would only offer short-term relief.

The large commercial banks are the hert of the Ameircan economy---they provide the credit and cash for growth and maintenance of the economy.

It's complicated, and there are no simple solutions.

But without Wall Street and the large commercial banks---two different but related entities---there will be no economic recovery.

[OrbitOne]

You mis-spelled your Freudian slip "hurt", Barney.

[monicaangela]

Good Mroning Thunderclapnewman,

You really have faith in the banks. The small community banks that somehow don't seem to be mixed up in this mess seem to fit your idea more than the large commercial­/investmen­t banks that through the repeal of Glass-Steagall have run rampant.

I feel, with all of the money that the goverment is plowing into these large black holes, it would be just as easy for the treasury department to oversee a temporary branch of the government that would help to keep the economy going while all of this is unwound. The government is us, the people, that includes these blood sucking banks, why can't the government be in retail banking business. Anyone, any business in this country, is really a part of the government. What are you talking about? Do you think the banks are a separate entity unto itself and not a part of the government?

[PATina]

Except there are some very well run smaller banks that would be better replacements that the "too big to fail" commercial banks.

If I said... let's pay off the mortgages of the people who purposely got loans they knew they couldn't afford... that would be preposterous because we'd be paying for their irresponsibility.

But you say.... let's pay the people who purposely put us in this situation.­.. and that's not preposterous? Aren't we still paying for their irresponsibility?

By all means... help the banks that didn't grow to large to fail. Help the banks that acted responsibl­e... but please don't say we NEED these irresponsible institutio­ns... as if there are no other choices available.

[Carolab]

What about FDR's use of the RFC? Lending from the Treasury and NOT from the Fed seemed to work out pretty well:

http://eh.net/encyclopedia/article/butkiewicz.finance.corp.reconstruction

And, guess what? The large commercial banks can exist on their own. We don't need them controlling the Fed, and by extension, our Treasury.

[TrooAmerican]

Yayyyy, Geithner did something to create another bubble on Wall street!
thats all they care about anyway, because all day long, they play with other people's money and they just want them to toss it into the ring. They could care less about unemployment, housing, economies, as long as the Dow rises for whatever reason of the day.

Actually, the current Dow was just a downward depression of the Dow, not true value. Many companies are undervalued. The problem is that they rely on shallow, baseless reasons for the dow to spike, such as legislation or govt action to make the rich clearly richer without risk.

[monicaangela]

They aren't just making money for the sake of making money. The world has become their playground, it cost money to be able to play king and queen all over the world. These people are establishing a way of life that they were only able to enjoy before the civil war.

[cjt1957]

If it is so easy, get you some....