Summers Criticizes Bailed Out Banks For Not Lending More, Says Economic Recovery Pace 'In Doubt'

bloomberg.com:

White House National Economic Council Director Lawrence Summers chastised some banks that received government aid for not doing enough to reduce foreclosures, while declaring that next year's economic growth pace is "in doubt."

"Prudent financial institutions will recognize that the profits they're enjoying are in part a reflection of the commitment government and the broader society have made to the financial system that has enabled them to enjoy those profits," Summers said in an interview with Bloomberg News yesterday in Washington.

Read the whole story: bloomberg.com

Comments

[themodernleader]

Advisor Summers should recognize that loaning requires fiduciary duty of determining the chances of the money being repaid. Borrowing is needed to produce the good or service demanded by others. The demand triggers the need for the loan.
Now the consumer is flat busted. There is next to no demand for goods or services, thus loaning becomes a risky business. Simply forcing banks to loan to unqualified borrowers is not a viable solution.
The right solution is to create demand through putting our unemployed millions into purposeful jobs that restart demand while rebuilding our economic bases and employee competence, character and citizenship. To leaders of covert allegiance, such obvious solutions are too obvious and clear to be real. Only the mathematical and other esoteric methods of fraud experienced leaders can ever be trusted. To the corrupted the obvious is not at all obvious.

[PhilipTaylor]

America has shipped its wealth building capabilities to Asia and South America.

Our only means of support was the FAKE Wall Street Derivatives Economy built on PURE SPECULATION on everything that moved and does not move!

At the same time the FED Reserve System was flooding the Economy with MORE and MORE Debt (Printed Debt) and the Wall Street Banks were pumping out real debt to the consumer so more and more derivatives could be manufactured and sold.

Also, at the same time Wall Street banks were placing massive and repeated bets that the Derivatives would soon FAIL, which of course, they knew would happen since they were made by the banks to FAIL. A special kind of "Insider Trading" because the Banks "Manufactured" the "Sure-Fail Derivatives to Fail" and also "Bet they would FAIL."

Obama has taken to approach of supporting this corrupt cycle to the tune of $23.7 Trillion and has allocated basically ZERO to WEALTH BUILDING Manufacturing or High Tech for export wealth building. So we see the Investment bankers used to investing with NO Risk using A1G Credit Default Swaps and other forms of hedging! These so called Investment Bankers refuse to invest in Main Street Manufacturing because it requires risk taking and they have become GUTLESS and becuase they know they have $Hundreds of Trillions in TOXIC Derivatives hidden "Off-Balance-Sheet!"

So Obama says NO to Main Street Manufacturing and

Wall Street says NO to Main Street Manufacturing! NO Solutions!

[PhilipTaylor]

We need to reimplement the GlassSteagallAct and abolish the GrammLeachBlileyAct and break up the banks into 1) retail banks, 2) investment banks, and 3) insurance companies and other financial institutions and then start running these separate and distinct entitites with principles and integrity just like we did very successfully for over half a century. It's really pretty easy and simple to fix the system if we do it this way, and it would work for the benefit of all Americans just like it did from 1933 up to 1999. Regulation Q of the Glass Steagall Act set the rate of interest that banks were required to pay savers at 5.25% and this needs to be reimplemented. What the Federal Reserve has done with interest rates is NOTHING SHORT OF OUTRIGHT ROBBERY OF SAVERS.

Everything that Bonkers Ben and the Boys have done has only made things much worse in the real economy. Sure, they've recovered all of the profits for Goldman Sachs and the other big investment banks, but that comes at the expense of plundering averaging Americans and directly stealing literally trillions from taxpayers. We have never seen a bigger economic disaster in the US financially than what we have right now and hundreds of millions of people are affected all over America. The Main Street economy continues to sink at an accelerating pace, and will continue to do so until and unless these out-of-control people at the Fed and on Wall Street are stopped.

[PhilipTaylor]

The FED Reserve as a "REGULATOR" is a Leader in the allowing the FAKERY on WALL STREET they allow the following kind of OFF-BALANCE-SHEET Accounting that was legalized during the ENR0N SCHEME that California still has NOT fully recovered from.

Each of these five Banks has over $30 Trillion in TOXIC Derivatives and some claim quarterly profits of a few $Billion or at most 0.0007% of the Toxic Derivatives and that would take 3,000 years to offset these Derivatives though such earnings:

The 0ffice of Comptroller of the Currency, 0CC, issues a quarterly Report that has the following info about OFF-Balance-Sheet TOXIC DERIVATIVES (TRULY MIND B10WING NUMBERS):

1 JPM0RGAN $81TRILLION in Toxic Derivatives
2 BofA $78TRILLION
3 G0LDMAN $48TRILLION
4 M0RGAN $39TRILLION
5 C1T1GROUP $32TRILLION

http://www.occ.gov/ftp/release/2009-72a.pdf It is on page 23

The FED is Regulating and allowing this once illegal Accounting. Perhaps the FED should BE REGULATING CAR POOLS instead!

Yet Geithner and SUMMERS are increasing the FED"s REGULATORY DUTIES! What does that say about his judgement?

[PhilipTaylor]

The MASSIVE ELEPHANT UNDER THE TABLE:

Can anyone show a Mammoth Profit if you FAKE IT Using Legalized Illegal Accounting!
Even ENRON did it!

So is $2.72 Billion larger than $81 Trillion? NO! Well Then they are Bankrupt!

Without "MARK-TO-MARKET" they exaggerate the Value of the Derivatives "On the Balance-Sheet" while JPM/CHASE has Toxic Derivative Debts of $81 Trillion all conveniently hidden!

Accounting is totally FAKE and how can analysts ignore the MAMMOTH IN THE ROOM - unless they are paid to!

Why save these 5 WS MAMMOTHS who have OUT-LIVED their TIME with their $30+ Trillion Each in Toxic Derivatives!

When did it sound like a good idea to have "OFF-BALANCE-SHEET" accounting? Wasn't it ENR0N?

Glass-Steigel them!

Divide them up and get rid of the JUNK at the expense of the Stakeholders!

Bye Bye TOO-BIG-TO-FAIL!

[elan4444]

Not enough has been done to curb the credit card industry. I personally have had my limit reduced on my Chase card, since they don't appear to be making enough interest from me. My daughter had a card cancelled with a spotless payment record, mainly because she did not maintain a balance, paying it entirely every month. And for Goldman-Sachs to be planning a bonus-fest sometime soon, is to be entirely in a world of their own. The high-fliers need to come on down and pay their fair share of taxes, we'll just have to reorient the economy. We will survive, remember, we used to make furniture in this country as well as shoes and clothes, and we can do so again. Put our American work force back in business and you'll get a quality product at a decent price. So the big companies don't make as much? My crocodile tears are streaming. Sell the place in Gstaad, Mr. CEO! And while I'm at it, we need health care!

[AngieMom57]

Give Summers another diet Coke ;-(

[Lilith33]

Crooks....and that includes Summers!

[Star2000dancer]

First we reinact the Glass-Steagall Act.

[AceInTheHole]

He got caught in a vicious net that he naively or not , had a hand in constructing. Now wisdom has become his ally and he sees the destruction that net has made possible and that the people who pull the strings are unconscionable and almost integrity free. and have little if any regard for the middle class of America. So to his credit , he 's trying to do his best to ameliorate the situation. But he has a very uphill battle, which may be the battle of his life. GOOD LUCK LARRY!

[Star2000dancer]

He is not naive, he is a big part of the problem too.

[DiogenesOfAlaska]

He is right about the relation between the generosity of government help throughout the system and record profits at individual banks.

Now, didn't Goldman Sachs convert into a commercial bank or bank holding company or whatever they call it now?

How about them boys over there start lending to small businesses? Or at least to municipalities - at a little boyscout discount?

[Star2000dancer]

Yes, oh please lend us our money back, right after you have your big parties, okay? Then let Dennis Kucinich & Ron Paul who saw this before and predicted this step by step audit the FED!

[DiogenesOfAlaska]

just for the record: I am the personified party-pooper.

Any further questions?

[TJCole]

We needed to Nationalize these banks if we wanted them to serve the greater good, and to reform them from within, and to protect our huge investments, not doing so was the height of irresponsibility...!

It's as simple as that...!

[Star2000dancer]

Audit the Fed & reenact the Glass -Steagall ACT.

[outnow]

When Wall Street did Russia and Mexico, Larry was there. Now that the looting by Wall Street focuses on America, Larry is there, too.

[Star2000dancer]

Yup, him & Geithner. We don't forget. Repay the FED? Repay us!

[wehrke]

Banks are not going to lend money unless they feel they will get repaid (the present real estate situation aside).

[breakingpoint]

Auditing the FED
http://jischinger.wordpress.com/2009/06/24/s-604-federal-reserve-sunshine-act-of-2009
Experience the Financial Genocide
http://jischinger.wordpress.com/2009/07/11/us-indentured-slavery

[ThatOne4Me]

Did Larry Summers take kick backs from bailed out banks?

http://www.alternet.org/story/140327/

[beatbox32]

Gee, is Summers really that confused by the banks refusal to loan money that will never be paid back?

[plumnelly]

Give me a break, Summers who help instigate this meltdown now pretends he's befuddled. MAIN STREET, the middle class is the backbone of our democracy and financial stability, yet he took everything for himself and wall street friends. He and his financial gurus crying wolf now is pathetic and definitely criminal. Kick him to the curb!

[Star2000dancer]

Exactly.