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Ear to the Ground

Treasury Covers for Stingy Banks

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Posted on Apr 20, 2009
NASA / U.S. Treasury

Unhappiness over executive perks and a perceived lack of lending have provoked skepticism about efforts, led by Treasury Secretary Timothy Geithner, to revitalize the banking system.

President Obama has said he doesn’t want public money going into a “black hole,” but his administration’s bank bailout looks more and more like an abyss of cosmic proportions. Not only are the bailed-out banks lending less than before, the Treasury Department appears to be engaging in creative math to obscure the gravity of the situation.

The Wall Street Journal took a look at Treasury’s numbers and found them off by half.

Wall Street Journal:

The Treasury analyzed the monthly percentage change in the amount of new loans at each of the top 21 recipients of taxpayer funds. It then calculated the median change in lending at the 21 banks. (The median is the figure that falls directly in the middle of a string of numbers.) By that measure, the Treasury said, lending dropped 2.2% in February compared with the prior month.

Using the same raw data, the Journal’s analysis focused on the total amount of new loans by the 21 banks, a more comprehensive measure. In February, that total fell 4.7% from January, more than double the government’s estimate of the decline in the median. The Treasury hasn’t released its own tally of the October to February decline.

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Night-Gaunt's avatar

By Night-Gaunt, May 7, 2009 at 9:54 am Link to this comment

Right now Obama is pouring money into banks to keep them going but not changing them. Those that did become banks like Goldman Sachs, instantly became eligible for TARP money! But correction of the systemic problems aren’t being done. We could still fall into a Great Depression at any time. Just imagine Al-Quada making another strike, it is about time for one more. [They take about 8 years to get one in operation.]  Would be the impetus for martial law and clamp down on rights of most every one. Because there would be panic in the streets then. Except maybe of the likes of the Crying Saint Glenn Beck, and his ilk.

Don’t expect this to be cleared up in 10 years if ever. Without fundamental changes it won’t.

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By KDelphi, April 20, 2009 at 2:13 pm Link to this comment

This is related news…Naomi Klein calls for getting rid of Larry Summers..(Geithner can go with him to—wherever they go to) Common Dreams ala Wash Post.

http://www.commondreams.org/view/2009/04/20-8#comment-form

“Back in 1991, Summers argued that the subject of economics was no longer up for debate: The answers had all been found by men like him. “The laws of economics are like the laws of engineering,” he said. “One set of laws works everywhere.” Summers subsequently laid out those laws as the three “-ations”: privatization, stabilization and liberalization. Some “kinds of ideas,” he explained a few years later in a PBS interview, have already become too “passé” for discussion. Like “the idea that a huge spending program is the way to stimulate the economy.”

And that’s the problem with Larry. For all his appeals to absolute truths, he has been spectacularly wrong again and again. He was wrong about not regulating derivatives. Wrong when he helped kill Depression-era banking laws, turning banks into too-big-to-fail welfare monsters. And as he helps devise ever more complex tricks and spends ever more taxpayer dollars to keep the financial casino running, he remains wrong today.

Word is that Summers’s current post may be a pit stop on the way to the big prize, Federal Reserve chairman. That means he could actually make “maestro.”

Mr. President, please: Pop this bubble before it’s too late.”


Jaded Prole nails it…

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By Jaded Prole, April 20, 2009 at 12:14 pm Link to this comment

The US economic house of cards is in shambles and all the stat jigging and scam feeding isn’t going to make it better. The truth is becoming increasingly obvious as folks lose jobs, default on debt and as tent cities replace suburbia as a growing trend. Only by dumping the scam system that goes by the street name of “the free market” and moving an economy based on the production of real things and infrastructure modernization products can we begin to rebuild. We’ve had enough BS, we’ve been robbed blind and wrung out. We need a publicly accountable reality based economic system.

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By tomack, April 20, 2009 at 11:08 am Link to this comment

Four weeks ago my wife and I went through the motions of refinancing at one of the largest banks in the U.S. When the loan officer looked at my credit report, paycheck, etc., he promptly shoved aside a foot of paper from his desk and had us aproved for max amount in about 10 minutes. One day later the assessor was at the front door. Four weeks later we still don’t have signed papers.

Why?

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By RdV, April 20, 2009 at 9:30 am Link to this comment

Isn’t Obama’s statement about not wanting to pour money into the Wall St black hole a little after the fact?

KEY:

“Complicating their efforts, bank executives say, is a decline in demand among consumers and businesses.”

  The bubble burst and everyone is tapped to the max—and even credit card rates are increasing—so this line to “free up credit” is bullshit—it is cover to transfer our money for the commmon good to Obama’s masters.

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By Tommy Tucci, April 20, 2009 at 9:23 am Link to this comment
(Unregistered commenter)

TYPICAL MANTRA “FAILURE IS AN OPTION”

It’s truly unbelievable that 21st Century Ivy League status, Ivy League education dominates government top potitions, continues rewarding spontaneous combustive negative behavior, counter intuitive stubborn mentality, and gross incompetent failure. Its time for all good men and women to come to the aid of their country. Remove all word processors pull computer terminals from mainstream media and the REVERSE ROBIN HOODS MERRY MEN IVY LEAGUE. Get them in their proper attire and positions ORANGE JUMP SUITS WHITE SNEAKERS AND JAIL TIME.

Myth of American Invincibility Omnipotent Wall Street
http://newsblaze.com/story/20090418172350zzzz.nb/topstory.html

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G.Anderson's avatar

By G.Anderson, April 20, 2009 at 6:31 am Link to this comment

Question can a bubble that took at least 10 years to create be resolved in two years?

Housing in California is over inflated by at least
3 times it ‘s worth since the bubble began.

Since, jobs, and wages, and debt are much worse than when the bubble began, it’s unlikely that housing prices even back to where they were before the bubble began will resolve the issues behind the real estate crash.

Yes, the crash is of cosmic proportions. Right now millions are defaulting on credit cards, soon they will be forced into arbitation, where they will be gutted by the credit card companies. Millions of others will have their cards cancelled at the whim of Corporations who recieved bailouts from the government. They have no protection, from either the feds or California.

While usury remains there will be no recovery, just some empty screaming on the way down.

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