Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Display:
are currently being grilled by Barney Frank's House Banking Committee.

Sheila Bair is a rock star. Her answers are short, to the point, and she's been busy working with banks and mortgage companies in a largely successful (so far) effort to work with homeowners in trouble. The government loses a little, the banks lose a little, and the homeowners lose a little (the lower market value of their homes). But people get to stay in their homes.

Bernanke is a lightweight. I have no confidence in his ability to grasp what is going on.

Paulson is a flat-out liar. He doesn't respond to questions, he repeatedly cites "groups of people" elsewhere either researching some aspect of the financial mess (so he can't at this time respond), or busy drawing up some kind of plan for something or other, after which the plan will be "evaluated." In other words, he means to do nothing.

Three points of contention between Paulson and Congress: TARP funding for bank M&A's  - picking winners - (National City Bank was discussed in detail - evidently they were told by regulators not to even try and apply for TARP funds while PNC was trying a hostile takeover financed with TARP funds), TARP funds being used for delinquent mortgage relief (Paulson refuses to do this, even though it is explicitly written into the TARP appropriation bill), and CEO compensation (which Paulson refuses to regulate).

Paulson is running a personal/ideological agenda, and TARP gives him a huge amount of clout. I assume that he's busy rewarding his wall street friends and/or attempting to maintain dollar hegemony.

And it's obvious that Barney Frank has absolutely no confidence in Paulson's integrity. Neither do I.

Hopefully, the transcript will become available shortly.

"It Can't Be Just About Us"
--Frank Schnittger, ETian Extraordinaire

by papicek (papi_cek_at_hotmail_dot_com) on Tue Nov 18th, 2008 at 12:56:21 PM EST
I heard this today too.  Looks like some in congress would like to expand FDIC's (Blair's) program to help/"encourage" banks to refinance troubled mortgages rather than let them go into foreclosure. If there are enough well-intentioned home buyers out there this might do a lot to ease that part of the crisis, but I have my doubts.

I can swear there ain't no heaven but I pray there ain't no hell. _ Blood Sweat & Tears
by Gringo (stargazing camel at aoldotcom) on Tue Nov 18th, 2008 at 10:06:46 PM EST
[ Parent ]
according to Bair, she's presently working with 60,000 total foreclosures, of which roughly 40,000 are eligible, for income, existing debt, owner-occupation,  or other reasons, for loan modification. She expects that 30,000 of those  will successfully reach agreements with banks and get some mortgage relief.

The program is evidently set to explode, as Bair projects she'll be working with some 1.5 million foreclosures in 2009 (hard to believe she's set up to work with that volume), which appears to be somewhere around 30% of projected foreclosures next year.

"It Can't Be Just About Us"
--Frank Schnittger, ETian Extraordinaire

by papicek (papi_cek_at_hotmail_dot_com) on Wed Nov 19th, 2008 at 10:27:20 AM EST
[ Parent ]
Unless I'm mistaken, I think Blair was only working with IndyMac clients at this point.

I can swear there ain't no heaven but I pray there ain't no hell. _ Blood Sweat & Tears
by Gringo (stargazing camel at aoldotcom) on Thu Nov 20th, 2008 at 02:54:38 PM EST
[ Parent ]
Good partiaol summary. Thanks.
I like your signature. Mine, only more succinct.

Capitalism searches out the darkest corners of human potential, and mainlines them.
by geezer in Paris (risico at wanadoo(flypoop)fr) on Wed Nov 19th, 2008 at 10:49:55 AM EST
[ Parent ]

Display:

Top Diaries

Occasional Series