You are absolutely correct about the re-instatement of a competent DOJ, and turning around Civil Rights enforcement (after 8 years of politicised disaster) is a big achievement, and I'd add what Sec State Clinton has done with diplomacy at State is a similar story.
Unfortunately, that's not really what people had on the top of their minds when they elected Obama. Economy, jobs, and heath care. Those were the top three. And, unfortunately, Obama's administration, with an unable unassist on the part of the Democrats in congress, have been very conventional (and predicatbly ineffectual) on the first two voter concerns, while on the third...well...best leave that unsaid.
That's where the discontent is coming from.
The term obamabot is to my mind a new invention, for those who, after a year of ineffectual policy making and leadership on the top three issues facing Obama's voters, still make excuses for that ineffectualness. No one would have used the term a year ago. Fai de bèn a Bertrand, te lou rendra en cagant
Actually, I was called an Obamabot during the primary campaigns, so its novelty has really worn off. I don't think Obama's leadership has been ineffectual, I think that he faces nearly unsolvable political and economic problems. 40 years of "free trade/defense" industrial policy that favored concentration of wealth and the replacement of manufacturing by finance except for an arms industry whose effects on the rest of the economy have been investigated by Seymour Melman and his students and colleagues, 20 years of evangelical burrowing in the military, and 8 years of Bush-catastrophism puts Obama in the position of head of a shambles where he has very little freedom of movement and very limited resources. If there was an active movement like the labor movement in the 30s, it would help him, but all he has is a bunch of querulous "progressives" who want to complain that the fictional "rule of law" has not been magically "restored".
So, what should have been done? What could Obama have done better, in the existing environment? If not, what's the game plan now, and what can be the expectations? In the long run, we're all dead. John Maynard Keynes
It seems to me that you're importing a meta-controversy from Agent Orange to a forum where both the discourse, conventional wisdom and a large fraction of the users are simply not involved in that discussion - neither on your side nor on the side(s) you critique.
That's certainly your prerogative, and one of the advantages of this type of open message board is that discussions can migrate like that. But you might want to bear in mind that quite a large number of us are not Kossacks.
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
When people then proceed to complain about his "reality check" he pulls this bullshit about pissing on Obama's parade.
It's rather hard to avoid discussing the shortcomings of the Obama administration and focus on the areas of American political life that are more amenable to activist change, when the other party to the discussion insists on turning the discussion into a defence of Obama's record.
Further, this is a massive thread with, imo, some rather good discussion in it. I don't see anyone 'insisting' on turning it into any particular thing and I certainly wouldn't characterize it as a 'defense of Obama's record' in its overall tone. You, however, seem to be insisting that you want to discuss his 'shortfalls' and that's fine -- no one's stopping you. But don't be all aggrieved if people don't agree with your critiques and interpretations. Maybe we can eventually make language a complete impediment to understanding. -Hobbes
Calling his points spurious, outright garbage, and sound but not impressive are, again, all your opinion, not fact.
These sorts of "beliefs" are qualitatively different from those of the religious, who crave certainty and too often believe they have it. But yes, my characterization of Obama is an opinion based on many observations and impressions that have been organized into a working belief. As are yours and those of rootless. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
We're not anywhere NEAR a consensus of 'impressions that have been organized into a working belief' on any of these opinions, so until we are, those of you who have hardened your opinion into belief are going to have to expect arguments from us non-believers. And until you stop stating your opinions like they're the accepted working belief, I'll keep reminding you that they're not. Maybe we can eventually make language a complete impediment to understanding. -Hobbes
Some isn't worthless, I agree with that, having worked in the industry I've always said that, including here. But a huge amount is, far huger than is generally acknowledged...and if you add another 20% drop in CA, AZ, FL and NV real estate prices, you might for instance double that "huge," given how the garbage CDOs and MBSs tend to be structured. (Unless you think the DoT and the Fed took only the senior tranches...)
Of course, since there's no transparency, distrust only grows... Fai de bèn a Bertrand, te lou rendra en cagant
A summary, in case you are interested. For example,
Section 109 - Directs the Secretary [of the Treasury], to the extent that he or she acquires mortgages, mortgage-backed securities, and other assets secured by residential real estate, and the Federal Housing Finance Agency, as conservator of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), to implement a plan to maximize assistance for home owners and encourage the servicers of the underlying mortgages to take advantage of the HOPE for Homeowners Program under the National Housing Act or other available programs to minimize foreclosures. Authorizes the Secretary to use loan guarantees and credit enhancements to facilitate loan modifications to prevent avoidable foreclosures.
Of course, loan mod programming has been a colossal failure since its inception as the Hope4Homeowners Act and subsequent provisional stature in the ARRA.
Purchase of RMBS, CMBs, CDOs, and CDSs are not directly attributable to the US Treasury's TARP assets, that is those lump sum "loans" to depository institutions and investment banks such as Citi, BoA, WF, and GS. Rather, US Treasury acquited these so-called assets by secondary market transactions funded by FRB sale of new sovereign debt and as illiquid collateral (securities available for sale) tendered by FRB discount window applicants.
The result of holding non-performing assets is the US Treasury's liabilities --in the form of servicing T-bill yield-- exceeds its assets' income.
But you keep on pounding the payback drum. No skin off my back. Diversity is the key to economic and political evolution.
The PPIP, if you can remember, is the US government's plan to provide liquidity for banks' toxic assets -- distressed RMBS and the like -- by encouraging firms (via a subsidy) to buy the stuff. When the plan was first announced in March, the Treasury said the programme could end up purchasing $1,000bn worth of toxic assets. That projection has since been downgraded to about $40bn for various reasons, one of which is the supposedly improving economy. http://ftalphaville.ft.com/blog/2009/11/09/82201/ppiped/
I dunno, to me there is a big difference between $40B and $1T, but it might be chump change to you.
In short, the scheme does not necessarily remediate US Treasury exposure to underlying asset default or UST beta -- Rather, and evidently, US Treasury committed and tendered RFO 180% the cost of capital to dilute 20% of the risk of selected collateral.
Now. FTalpha's so-called downgrade of total possible US Treasury exposure admits nothing but "for various reasons" PWG intentions to retreat from front-running open market vulture funds' trading volume. What remains is the illiquid book value of US Treasury assets, i.e. what has not been either accounted, sold, or extinguished. Accordingly, FTalpha/Mother Jones "narrative" is $1T upper limit, $40B is lower limit of SECURITIES AVAILABLE FOR SALE.
That's a balance sheet item, dude. Diversity is the key to economic and political evolution.
Statement by Timothy F. Geithner before the Senate Banking Committee, May 20, 2009
FRB: H.4.1, 21 Jan 2010
Related news:
Toxic Asset Mountain Toxic-Asset Plan to Start in Six Weeks Geithner Calls for `Very Substantial' Change Dear Timmy Banks Aiming to Play Both Sides of Coin Bailout pledges reduced to $11.6trn
etc etc Diversity is the key to economic and political evolution.
To explain how the PPIP works,the FT had a really good little video back when Geithner's Treasury came up with it.
I think you may be confusing the upfront matching equity contribution the Federal gov't has put up (roughly 30bn to date) with the FDIC and Treasury financing of the purchasers of the assets being bought.
If those toxic assets turn out to be worth far less than the bidders have paid for them, the debt issued by the FDIC and the Treasury will likely be worth far less than par, and the US taxpayer will be on the hook, and for far more than the 30 bn. The real exposure is potentially up to the amount of the Federal outlays for upfront equity contributions (never authorized to be more than 75 bn if I am not mistaken) as well as the loans made by the FDIC and the Treasury (implying Fed guarantees, of course) for the purchase of the assets by private investors (the total of which was not to exceed $1tn.)
Of course, no one knows how much exposure there is, because Treasury is not giving any data out, which is a big complaint folks have about this (not the only one, but a big one). But, it is more than 30bn, and likely numbers in the hundreds of billions (though again, nobody really knows, probably not Geithner either though I bet he's very worried about it..)
At this point, with housing prices (an underlying for much of the toxic assets) resuming their downward slide, it's probable the exposure is heading up. But it is probably less than the 14 trillion in toto than the informative Mother Jones graph was indicating. And if Mother Jones is too lefty for you, you might consider what Bloomberg was saying right around the same time - nearly 13 trillion.
The latest figure I've seen in the Financial press was from Bloomberg in the $11-$12 trillion range. And, a bipartisan watchdog group headed by former congressmen Stenholm (D-TX) Penny (D-MN) and Frenzel (R-MN) is indicating a similar figure of $11.7 billion...and note, if you look at the table here, you are talking about "spent amounts" while Cat is talking about "Max" amount...i.e., how bad thing can get is the assets the Feds are on the hook for do not improve in value. Fai de bèn a Bertrand, te lou rendra en cagant
As you have said elsewhere, it depends on the US economic situation which is of course up in the air.
I do, for my family, feel relatively safer where I sit today (France) than where I sat three years ago (the US) but, that's just a personal judgment, I guess. Fai de bèn a Bertrand, te lou rendra en cagant
It will probably land somewhere in between, though precisely where is impossible to forecast with any degree of precision.
You are right, of course, that in the event of a total collapse, the fact that the Treasury is on the hook for a trillion North American Pesos won't matter. But there's quite a broad range there. An order of magnitude and a half, in fact. So there's plenty of room for it to go plenty wrong even if the real economy only collapses a little bit.
To this I will add: PPIP not only established equity fund managers (plus investor loss guarantees), it established the Legacy Loan program administered by FDIC to dispose of receivership assets ("structured loan sales" plus investor loss guarantees). Diversity is the key to economic and political evolution.
