Tag: TARP

Profitability

“We’ve already blown past the worst-case scenario on unemployment” | repeat stress tests

Colin Henderson

As banks rush to repay TARP money, driven by the desire to remove government control rather than any reflection of improved financial standing, here is a sobering statement from Elizabeth Warren.  Just as GM didn’t ‘get it’ in terms of the world will look like on the other side of this recession, many banks appear to have similar blinders.  Instead of arguing that they are not in bad shape and that they are secure, why not make changes now that display the recognition that the future is not going to be anything like the past.  I say again, and blame … Continue reading “We’ve already blown past the worst-case scenario on unemployment” | repeat stress tests

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SIGTARP report and report to Congress on stress tests | Apr 19th, 2009

Colin Henderson

The only word for this document is breathtaking.  It is breathtaking because it touches a large amount of the US economy, and the largest businesses in the economy.  It deals with: Banks Auto sector executive compensation Executive replacement ‘luxury’ purchases, (eg corporate jets) SIGTARP administration And the detail contained in the 247 pages is work that is substantially net new since January this year.  I say this in defence of Geithner, and his quiet approach at first.  He has been rather busy.  But to the report to Congress today. The report sigtarp-april2009_quarterly_report_to_congress:   SIGTARP site. Summary of Geithners testimony at FT. … Continue reading SIGTARP report and report to Congress on stress tests | Apr 19th, 2009

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“Too big has failed” | FRBKC

Colin Henderson

This extract from the introduction in this speech summarises the situation well, both in US and UK.  It is such a clear example of taking the wrong actions (injecting cash into banks) over and over, yet not succeeding in the objective of restoring confidence.  Bank stocks have now reached the point that they have no impact on the Dow Jones index.  This means confidence is not just down but eliminated. Time to address the root problems: asset values and resulting insolvency management change Too big has failed | [pdf] Federal Reserve of Kansas City – Thomas Hoenig Over the past … Continue reading “Too big has failed” | FRBKC

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Sep 18th 2008 | Russian Missile Crisis – banking crisis version

Colin Henderson

I heard the headline earlier today but only after listening to this video now do I appreciate the depth of this.  We know the Lehman Brothers collapse was serious but only now do we know to what extent.  This was the economic version of the Russian missile crisis. It also explains for the first time, the awkward and otherwise inexplicable overnight shift in TARP approach by Paulson. Listen to the comments at 2 minutes 20 seconds and from then on.  Kanjorski is the Chair of the Capital Markets Committee.  The key comments are: “it was about September 15th [note his … Continue reading Sep 18th 2008 | Russian Missile Crisis – banking crisis version