Tuesday, January 20, 2009

President Obama Faced With Major Bank Rescue Decisions from Day One

Obama Urged to Move Swiftly to Rescue Banks, New York Times
Obama Team Considers New "Bad Bank" , Financial Times

As the world's attention turns to the pomp and ceremony of the Inauguration of the new President of the United States, the financial community is increasing the fervency of its calls for quick and significant action to rescue the increasingly vulnerable banking community. While the need for some action to save troubled banks, like Citigroup and Bank of America, is widely acknowledged, there are a number of different proposals for what specific steps should be taken.

In a recent speech, Federal Reserve Chairman Ben Bernanke outlined three options for a bank rescue plan : 1) an extension of the TARP philosophy, by which the government would purchase troubled assets from the banks; 2) government provision of guarantees of bank assets and agree to absorb certain losses related to troubled assets; 3) the formation of a "bad bank" that would use stock or cash to purchase declining assets. Great Britain recently chose to employ the third "bad bank" strategy in its efforts to limit the expansion of the crisis in the banking industry.

Whichever strategy or combination of strategies they decide to pursue, President Obama and his administration will have a number of factors to consider when making their decision, including the possible--if not probable--disagreements between major players like Treasury Secretary designate Timothy Geithner and Chairman Bernanke and the likely imposition by Congress of conditions and limitations on the use of the remaining bailout money.

Discussion Questions:
1) Should the government offer further direct, financial assistance to banks?
2) If yes, what is the best way for the government to approach a further rescue of struggling banks?
3) Should a certain portion of federal rescue money be dedicated to foreclosure relief?

1 comment:

MC Shalom said...

You Bail Out, We Opt Out.

All of Our Economic Problems Find They Root in the Existence of Credit.

Out of the $5,000,000,000,000 bail out money for the banks, that is $1,000 for every inhabitant of this planet, what is it exactly that WE, The People, got?

If Your Bank Doesn't Pay Back Its Credits, Why Should You Pay Yours? Or Else ...

If the Banks Get 0% Loans, How Come You Don't?

At the Same Moment, Everyday Some of Us Are Losing Our Home or Even Our Jobs.

Credit is a Predatory Practice.

When the Predator Finishes Up the Preys, He Dies. What Did You Expect?

Credit is Mathematically Inept, Morally Unacceptable.

They Bail Out, We Opt Out

Opting Out Is Completely Anonymous.

The Credit Free, Free Market Economy

Is Both Dynamic on the Short Run & Stable on the Long Run, The Only Available Short Run Solution.

I Am, Hence, Leading an Exit Out of Credit:

Let me outline for you my proposed strategy:

Preserve Your Belongings.

The Property Title: Opt Out of Credit.

The Credit Free Money: The Dinar-Shekel AKA The DaSh, Symbol: - .

Asset Transfer: The Right Grant Operation.

A Specific Application of Employment Interest and Money.
[A Tract Intended For my Fellows Economists].

If Risk Free Interest Rates Are at 0.00% Doesn't That Mean That Credit is Worthless?

Since credit based currencies are managed by setting interest rates, on which all control has been lost, are they managed anymore?

We Need, Hence, Cancel All Interest Bearing Debt and Abolish Interest Bearing Credit.

In This Age of Turbulence The People Wants an Exit Out of Credit: An Adventure in a New World Economic Order.

The other option would be to wait till most of the productive assets of the economy get physically destroyed either by war or by rust.

It will be either awfully deadly or dramatically long.

A price none of us can afford to pay.

“The current crisis can be overcome only by developing a sense of common purpose. The alternative to a new international order is chaos.”

- Henry A. Kissinger

They Bail Out, Let's Opt Out!

If You Don't Opt Out Now, Then When Will You?

Let me provide you with a link to my press release for my open letter to Chairman Ben S. Bernanke:

Chairman Ben S. Bernanke, Quantitative [Ooops! I Meant Credit] Easing Can't Work!

Yours Sincerely,

Shalom P. Hamou AKA 'MC Shalom'
Chief Economist - Master Conductor
1 7 7 6 - Annuit Cœptis
Tel: +972 54 441-7640