SnyderShrugged Posted April 8, 2009 Share Posted April 8, 2009 Govt. May Spend More than $4 Trillion but Economy Faces 'Prolonged Weakness,' Oversight Panel Reports By CHARLES HERMAN and ALICE GOMSTYN On the six month anniversary of the passage of the bill that created the Treasury Department's $700... On the six month anniversary of the passage of the bill that created the Treasury Department's $700 billion to bail out the financial sector, the congressional panel charged with overseeing the bailout released a report predicting prolonged weakness for the U.S. economy. This, despite the government's commitment to spend trillions of taxpayer dollars on a massive bailout of the financial system. These were the findings released in a report today by the Congressional Oversight Panel, the body charged with overseeing the government's Troubled Asset Relief Program, the $700 billion plan aimed at bailing out the country's financial sector. "We still have a long way to go. A very long way," Elizabeth Warren, the Harvard Law School professor who chairs the panel, said in an interview today with Bloomberg News. Today, the "credit markets no longer face an acute systemic crisis in confidence that threatens the functioning of the economy," the report said. But, it said, the economy now faces an "apparently prolonged period of weakness" with regard to financial firms and lending. It noted, for instance, that Citigroup and Bank of America received multiple injections of capital from the government while borrowing costs remain high for businesses and individuals. The panel also cited increasing numbers of home foreclosures and lower home prices as reasons for concern. The panel criticized the Treasury Department for failing to identify what measurements it will use to determine whether its rescue programs are working. "If you don't articulate what the metrics are going out ... you can't know if anything succeeded or failed," Warren said. Warren also criticized the Treasury for its lack of openness on its rescue efforts as it first began the TARP program last year. As Treasury started this program," she said, "they really had the notion that they would spend the money the way they wanted, and not only were they not going to tell the public, I don't think they were going to tell the Congressional Oversight Panel." The Treasury Department recently unveiled a Web site dedicated to detailing the government's financial stability efforts. On the site, the department promises that the government's financial stability plan "will institute a new era of accountability, transparency and conditions on the financial institutions receiving funds." http://abcnews.go.com/Business/Economy/Story?id=7283059&page=2 Link to comment Share on other sites More sharing options...
SnyderShrugged Posted April 8, 2009 Author Share Posted April 8, 2009 bump just because I think it's important Link to comment Share on other sites More sharing options...
hkHog Posted April 8, 2009 Share Posted April 8, 2009 The big problem here is that now the government is going to start borrowing trillions of dollars from the same credit market. How do we expect credit to unfreeze when the government is going to be tapping it for all its got!? The TARP and stimulus plans do not work together AT ALL. One is supposed to allow banks to start lending again and the other is taxing the credit system to a new extreme. How does any of this make sense!? This is all just a massive waste of money because we have no unified plan with a few simple and compatible objectives and are instead trying to do everything at once. This is just insanity! Link to comment Share on other sites More sharing options...
PleaseBlitz Posted April 8, 2009 Share Posted April 8, 2009 It's been a couple of months since **** hit the fan. Do people really expect it to be close to being over? :whoknows: Link to comment Share on other sites More sharing options...
Taylor4Life Posted April 8, 2009 Share Posted April 8, 2009 The scary part about this is that $4 trillion is actually a drop in the bucket compared to what the banks lost in the derivitives market during this crisis. People mistakenly believe that the housing crisis is the root cause of the financial collapse. Derivitives, which Warren Buffet has nicknamed "financial weapons of mass destruction," are the real culprit. This article was written in 2003, well before the collapse: http://news.bbc.co.uk/2/hi/business/2817995.stm We can't say we weren't warned. Link to comment Share on other sites More sharing options...
SkinsHokieFan Posted April 8, 2009 Share Posted April 8, 2009 It's been a couple of months since **** hit the fan. Do people really expect it to be close to being over? :whoknows: I think people are. Even here in the tailgate Link to comment Share on other sites More sharing options...
Larry Posted April 8, 2009 Share Posted April 8, 2009 1) Supposedly, our entire economic system was on CPR six months ago. Do people really expect to be winning prize fights today? 2) That said, though, the feeling I'm getting from reading that article (or at elast, the part quoted) is: "Well, the crisis is over, and the patient isn't going to die on us, any more, but the credit market hasn't returned to the (foolishly overextended) state it was in before it's heart attack, and we're going to keep administering stimulants until it is." Is the mission of these bailouts to prevent the collapse of our economy? Or to get us back to The Days of Bubble? If it's the former, then maybe it's time for a "Mission Accomplished" moment, and let the patient heal the rest of the way on it's own. (While we stand by with the crash cart, just in case.) Link to comment Share on other sites More sharing options...
Peeping Wizard Posted April 8, 2009 Share Posted April 8, 2009 America is bored with this news story now. Link to comment Share on other sites More sharing options...
SnyderShrugged Posted April 8, 2009 Author Share Posted April 8, 2009 1) Supposedly, our entire economic system was on CPR six months ago. Do people really expect to be winning prize fights today? 2) That said, though, the feeling I'm getting from reading that article (or at elast, the part quoted) is: "Well, the crisis is over, and the patient isn't going to die on us, any more, but the credit market hasn't returned to the (foolishly overextended) state it was in before it's heart attack, and we're going to keep administering stimulants until it is." Is the mission of these bailouts to prevent the collapse of our economy? Or to get us back to The Days of Bubble? If it's the former, then maybe it's time for a "Mission Accomplished" moment, and let the patient heal the rest of the way on it's own. (While we stand by with the crash cart, just in case.) good take on this Larry and I share the same general concerns over the "bubble days" Link to comment Share on other sites More sharing options...
PleaseBlitz Posted April 8, 2009 Share Posted April 8, 2009 I think people are. Even here in the tailgate No doubt these are the same people that were claiming it was/is the worst economic disaster since the Depression right? God people piss me off sometimes. :mad: Link to comment Share on other sites More sharing options...
Hubbs Posted April 8, 2009 Share Posted April 8, 2009 It's been a couple of months since **** hit the fan. Do people really expect it to be close to being over? :whoknows: Lots of people do, including, sadly, Obama. His budget projections rely on numbers that couldn't be rosier if they came from a florist. Link to comment Share on other sites More sharing options...
ChocolateCitySkin Posted April 8, 2009 Share Posted April 8, 2009 It's been a couple of months since **** hit the fan. Do people really expect it to be close to being over? :whoknows: yeah i'm scratching my head at that one... i'd much rather be in prolonged weakness than. ZOMG THE WORLDS COMING TO AN END!?!>!!!111 Link to comment Share on other sites More sharing options...
Tonic24k Posted April 9, 2009 Share Posted April 9, 2009 yeah i'm scratching my head at that one... i'd much rather be in prolonged weakness than. ZOMG THE WORLDS COMING TO AN END!?!>!!!111 I think prolonged weakness is an understatement. As I said all along the hidden tax, a.k.a inflation, is right 'round da coner! Hope you're not retiring anytime soon, savings is going to be eaten up. Thank god we have "proven" financial geniuses like Ben Bernanke, Tim Geithner, and B.O. at the helm! Or maybe this is part of some Wal-mart conspricay to flood the market with greeters!(Lame, I know) http://www.reuters.com/article/newsOne/idUSTRE53790N20090408 "Author who predicted crisis sees inflation ahead" By Daniel Trotta NEW YORK (Reuters) - An author who saw the global financial crisis coming fears the next bubble will come in the form of inflation and has little confidence U.S. President Barack Obama's team is up to the challenge ahead. "The Democrats have replaced the Republicans as the big benefactors to the financial community," said Kevin Phillips, author of "Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism." "The financial community is donating more to Democrats than ever before and you've got more Democrats in the financial community, creating a very powerful pattern there. I don't think you're going to see the Obama administration and Congress willing to be tough enough in dealing with these things," he told Reuters. Phillips, a former strategist in the Nixon White House who has turned highly critical of the Republicans and voted for Obama in 2008, published "Bad Money," his 13th book, a year ago. The paperback edition came out March 31 with a revised preface and afterward, interpreting the events of the past year, but the prescient body of "Bad Money" remains unchanged. A year ago, he warned of a the pending explosion of a 25-year "multibubble" that started in the 1980s, when the financial sector accounted for 10 percent to 12 percent of the U.S. economy had started metastasizing into an "arguably crippling" 20 percent to 21 percent by the middle of this decade. Overleveraging and easy credit was bound to create disaster, he warned. Phillips assigns much of the blame to former U.S. Treasury Secretary Henry Paulson, but perhaps even more on Federal Reserve Chairman Ben Bernanke, who he calls a "disaster," and his predecessor, Alan Greenspan. Phillips calls Paulson a Wall Street insider who was looking out for his own, and Bernanke an academic misguidedly trying to refight the 1930s Great Depression. Together they formed the wrong team at the wrong time whose ad hoc approach threw away hundreds of billions of dollars and more than doubled the Fed's balance sheet, he says. "What you're seeing Bernanke do is he's trying to create a bailout reflationary bubble, which he can't describe as a bubble, just as Greenspan couldn't describe the housing mortgage bubble as a bubble. What we're seeing by Bernanke is a covert attempt to rebubble," Phillips told Reuters. Moreover, a commodities cycle probably started early in this decade and is only being masked now by recession, Phillips says, presaging a repeat 1970s style inflation, he said. (clink link for the rest of article) Link to comment Share on other sites More sharing options...
SnyderShrugged Posted April 9, 2009 Author Share Posted April 9, 2009 Good stuff Tonic and welcome! Link to comment Share on other sites More sharing options...
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