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Treacle at Treasury - a moral crisis and more [May 5 update]
[I got a complaint comment from another TPM user (see original thread comments) saying that I was posting abusively by updating a blog entry. So to honor that complaint (even though it was just one poster and it was not well grounded), I'm changing how I post updates. Below are the current updates followed by a link to original thread (in its not-original time slot). The recent updates will generally also appear in the main blog along with the original comments but are posted here as a relatively stand-alone blog entry.]
Recent update [slightly edited]:
update May 5 to include Bloomberg on stress test leaks. The article says 10 of 19 big banks likely to need capital. But so far no leaks on the flip side -- are any banks too weak to save? This is a key reason for stress tests -- to find out which banks should NOT be saved. While leaking positive info might have good reason, let's hope that the stress tests are not being used as a mere whitewash or PR tool for Treasury.
updated May 4 to include article, Geithner's New Bank Fix Is Bogus, Too, which agrees with my views that the Geithner proposed conversion of TARP preferred stock to common stock is bogus and problematic. It also supports my position re bondholders:
As an aside, I read somewhere thanks to a TPMer that Obama had critics Krugman and Stiglitz over for a dinner chat last week. That strikes me as a hopeful sign. Would love to have a transcript of that chat...
Other updates and original blog:
Treacle at Treasury - a moral crisis and more [updated]
May 4, 2009, 12:12PM
Recent update [slightly edited]:
update May 5 to include Bloomberg on stress test leaks. The article says 10 of 19 big banks likely to need capital. But so far no leaks on the flip side -- are any banks too weak to save? This is a key reason for stress tests -- to find out which banks should NOT be saved. While leaking positive info might have good reason, let's hope that the stress tests are not being used as a mere whitewash or PR tool for Treasury.
updated May 4 to include article, Geithner's New Bank Fix Is Bogus, Too, which agrees with my views that the Geithner proposed conversion of TARP preferred stock to common stock is bogus and problematic. It also supports my position re bondholders:
Unfortunately, the plan also has two major flaws: First, it's smoke and mirrors. Second, the taxpayers will be even more exposed to losses than they are now. [...] The idea that bondholders should share the bank pain is finally gaining some momentum. Let's hope that continues in the coming weeks.As I see it, either the banks' problems are largely smoke and mirrors or Geithner is flailing helplessly. And if there has been any good news from Warren at COP, I haven't heard it.
As an aside, I read somewhere thanks to a TPMer that Obama had critics Krugman and Stiglitz over for a dinner chat last week. That strikes me as a hopeful sign. Would love to have a transcript of that chat...
Other updates and original blog:
Treacle at Treasury - a moral crisis and more [updated]
May 4, 2009, 12:12PM
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