The only significant event that I was waiting for today was the unveiling by Timothy Geithner, U.S. Treasury Secretary, details on economic action plan aimed at saving the U.S. banking sector. At 11 am, American, as promised Geithner took the pulpit, opened his mouth in front of a long string of microphones and in the few minutes after the ether has been able to issue a giant cloud of nothing. Everything you said you knew that already. He had spoken to the New York example Times in an article subsequently taken up and commented on by several economic bloggers. Let me point out the right post from Mish and Yves in this regard. Just in the latter end of his article quoted an e-mail to Robert Radano.
In this mail, Radano advancing his personal conviction that there is no floor.
last week of representatives of the Treasury have been presented before the Senate Banking Committee to explain the alleged plan, the same should then reveal that Geithner Tuesday, the planet itself. At the Senate committee has not been shown any draft, written proposal or document of any kind. Just the same fine talk that the world was able to enjoy today. Radano drew the necessary conclusions, "or for unknown reasons did not want to inform the Committee of their intentions or a real plan does not exist."
grants seem to have particularly appreciated the content (?) Geithner's speech. As I write Wall Street is losing more than 4%. Let's see what
exactly Geithner said:
Banks with over $ 100 billion in assets will be required to undergo a full stress test "to ensure its ability to continue to lend during a phase of severe slowdown. The government will provide "capital support for schools that need it." Geithner said that the investments of the government are designed to be a "bridge to private capital," and added that the government injections (capital ed) will lead to a greater flow of bank loans than there would be without them . The government investments made through this program will be put into a separate entity - the Financial Stability Trust - that will be created to administer the government's investment in financial institutions in the United States.
Meanwhile, it would be very interesting to know the details about how the "stress test" evoked by Geithner will be executed. If a large bank were to fail the test and ask for a outrageous amount of capital what? Would be the gift without asking anything in return as seems to be going to Geithner, dust off the toys are made with Citigroup and Bank of America again inventing a state guarantee for any future losses or just let it go? Unfortunately, when the "details" seems to have become a paraloccia or otherwise of a particular secondary importance. We should therefore wait patiently for the U.S. Treasury Department decides it wants to do (because I doubt that has made a final decision) before we make a more precise idea. Beyond this, if we stick to today's announcement, the intention seems to be to return to the infusions of cash without asking for anything od ottenere in cambio.
Pratica che ha funzionato egregiamente in passato (ironia).
Come Geithner pensi di poter indurre le banche a erogare nuovamente del credito mentre l'economia continua a precipitare, mi sfugge completamente. Gli si regala del denaro e poi si spera come abbiamo fatto negli ultimi 18 mesi che gli istituti, per una qualche forma di riconoscenza accettino di correre rischi elargendo credito a destra e a manca?
Un altro caposaldo del piano di Geithner riguarda gli assets tossici:
Il governo, tramite FDIC e la Federal Reserve, in partnership con il settore privato, cercherà di far ripartire un mercato per i pericolanti assets legati al mercato property that weigh on banks' balance sheets. Geithner said the mixed fund, public-private partnerships, which would use government funds to provide the leverage to private capital, it would take to buy toxic assets at 500 billion initially, and may increase its spending to about 1 trillion dollars.
"By providing funding that markets are now able to ensure, to help start a market for assets that are based on real center of the current crisis," said Geithner. "Our goal is to use private capital and private managers, to try to provide the market with a mechanism for the assessment of assets." He added that the structure of this program and still study.
there a term for a person who continues to adopt the same strategy again and again, hoping that sooner or later it will lead to an outcome different from that obtained in previous attempts. I'm in a good mood, so I will not explicitly write the definition. What seems to want Geithner has taken the same approach that was so dear to the old Paulson. Former Treasury Secretary Hank Paulson tried several times to make someone buy the junk in his belly to U.S. banks. We tried first with the MLEC a fund that would be created with capital investment by major U.S. banks. In it the various banks could unload with comodo tutti i titoli tossici, cambiandogli nome, per poi attendere speranzose che gli investitori privati, obnubilati dalla fumosità dell'operazione e dimentichi della reale natura di questi assest, si accalcassero numerosi davanti alle porte dell' MLEC con l'intenzione di acquistarne grandi quantità.
L'idea risultò talmente ridicola agli occhi stessi delle banche che l'MLEC non vide mai la luce. Paulson ci riprovò quasi un anno dopo con il TARP. Se risultava ridicolo pensare che i privati potessero comperare degli assets tossici, perché non lasciare che ci pensasse lo stato? Lo scoglio su cui si infransero le belle speranze di Paulson fu il prezzo. Quando denaro avrebbe dovuto scucire il governo USA per questi assets tossici? If it was just money the banks would not have taken sufficient benefit, if it was too much, spending would have appeared in the public eye and the political world as unjustifiable. In the end, unable to untangle this knot, Paulson had to resign, but merely to give more than 350 billion to the banking sector.
Geithner Now we try again. We all'MLEC 3.0 as he is known. The problem as usual is that the banks do not want to sell the toxic assets at market prices because we would lose too much money (and many are already basically insolvent). Individuals obviously do not want them to buy at prices above market levels. The conclusion that the political world (quantomeno Geithner e Paulson) ne ha tratto è stata: "il mercato sbaglia nel valutare questi assets". E per convincerlo del suo errore, Geithner vorrebbe concedere tramite soldi pubblici ad alcuni selezionati privati, abbastanza leverage per speculare su questi assets tossici, nella relativa certezza che eventuali perdite se le ingoierebbe lo stato.
Nella mente di Geithner, di fronte ai lauti guadagni che questi selezionati soggetti incasserebbero, il resto del mercato, dopo essersi rosicchiato le mani, si lancerebbe anch'esso nell'acquisto dei suddetti asset, facendone lievitare istantaneamente il valore. Si compirebbe quindi il miracolo. A fronte di una limitata spesa e garanzia da parte dello stato si verrebbe a creare un mercato per the trash. Everything for the consumption of banks that could finally do a spring clean by releasing their own budgets.
If much of the responsibility in creating the current crisis is attributable to the excessive leverage used to speculate on the dubious assets, it can actually be more sensible to offer leverage and other speculation?
Frankly, I think that Geithner would need a financial analyst and do not like that. Waiting eagerly runs out to study the structure of this new program. There will be fun, unless they surrender as he did before he and Paulson on the same obstacles.
The last major intervention Geithner announced regards to consumer credit
The government will use approximately $ 1 trillion to support lending to consumers and small businesses through an expansion of the Term Loan Facility Asset-Backed Securities (TALF). There will be an increase in the portion of loans guaranteed by the Small Business Administration and a concomitant speeding up the approval process (loan note).
Does the fact that the Government extends loans to small businesses and discuss it, the idea of \u200b\u200bextending credit to consumers simply did not make sense. With the economy is cooing with the term Depression we really want people to continue to borrow consumare? Che ne dite di cominciare a spendere soldi realmente disponibili invece di continuare a vampirizzare il futuro a forza di debiti? Magari Geithner troverebbe il concetto bizzarro, ma un tentativo in questo direzione sarebbe anche ora di farlo.
Il ministro del tesoro USA ha anche accennato alla questione dei mutui:
Geithner ha anche promesso un "esaustivo piano" che affronti la crisi dei mutui abbassando l'entità delle rate ed il tasso di interesse. Ha detto che i dettagli su questo progetto verranno sviluppati nelle prossime settimane.Anche qua nulla di nuovo e nulla di particolarmente preciso. I tentativi fatti dalla precedente amministrazione per consentire people to renegotiate their loans or to lower the amounts have not proved particularly effective. Or the banks will not agree to reschedule or applicants did not meet the necessary requirements to obtain one with or without state support. Only a fraction of the needy has been able to benefit from state assistance on this front. Not enough to significantly affect the problem.
interest rates would, in theory, the central bank's scope, but should now be clear that there is no more independence between it and the government. Recently, the long-term interest rates, which are linked most of the loans, are rising sharply. Bernanke has threatened several times in recent months, to purchase long-term good, but never actually do it. The attempt was to be able to keep rates low to force conversation. Lately it seems that the market has sensed the bluff. He does not want more stories, wants action. If the Fed will not start, and quickly, to buy good long-term interest rates will be doomed to rise, impacting on the cost of new mortgages.
Sarebbe forse ora di cambiarla.
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