WOW! Must See TV: Congressional JEC panel ripping Geithner apart: Rep Brady (R-TX) first to ask him to resign: MiM starts Obama economic team “shake-up” watch…
Vodpod videos no longer available.
If you look at UE Tim, the US is substantially WORSE off than it was when Obama took office to answer Timmehs whine….In fact someone should tell Tim, taking him at his word that he believes all measures, any measure of economic activity shows things are better since January, the measure of foreclosures and delinquencies has also more than doubled since Obama ‘took charge’:
Update: 12:10pm EST: uh oh. Kudlow says and Steve Liesman confirms, that Geithner is the most fiscally conservative member of Obamas economic advisers. No wonder we are in a world of hurt! CNBC just ran the Brady Timmeh back n forth so it should come up in a video post shortly. will get it up right away.
Vodpod videos no longer available.
Update: 11:!5am OMG OMG Geithner just threw Seniors unda da bus!! He acknowledges to Brownback that yes the CBO score only works if Congress actually DOES the Medicare cuts and he insists they must and should and will DO THE CUTS. He says the costs have to be reduced, Brownback is saying but why cant we save Medicare? Good grief Geithner is a disaster, you aren’t supposed to tell Seniors they are getting thrown under there Timmeh, Obama will be displeased. Good ad for the GOP though!
WOW!! Excellent!!!! Live feed from CNBC here
I am starting Geithner Fired/Resigns Watch now, there will fer shure be some sort of ‘ Obama economic team shake-up’ to placate the rumblings as they get ready to ask for MORE STIMULUS…They can’t get away with it under Geithner IMO, looks like he is marked as sacrificial lamb, but the Progressives will be no happier with Larry Summers, lol….
By dequalss
Typos abound, getting ready while I do this- TImmeh is red and ranting and blaming Bush and Rep Brady made him acknowledge yes he was head of NY Fed when this collapse happened, and they are cross talking, Brady says the public has lost all confidence in Geithner and he reflects badly on his President, he says at some point Geithner has to take responsibility…ohhh excellent!!
Update: 11:04am EST: Rep. Burgess (R-TX) just said “I don;t think you should quit, you shouldn’t have been hired”. Is that a bus engine I hear idling??? This the Joint Economic Committee and is made up of both Senators and House members, double the fun!! Now Sen Brownback is going off about the health care plan and the Yuan peg…
(FD-MiM is a former AIG employee and shareholder and we have followed Geithner’s handling of the crisis as NY Fed-head closely for two years now, our posts on Geithner, Hank Paulson and AIG are legion. Our previous posts on Geithner and the troubled CITI bailout here and here and here and here and here and even here ….)
Recall Sens DeMint and Isakson called on Geithner to resign last March. As did several members of the House.
This is in keeping with the report in TheHill this morning:
A Congressional Progressive Caucus (CPC) member said there’s “growing consensus” among liberals that Treasury Secretary Timothy Geithner should step down.
Rep. Peter DeFazio (D-Ore.) said Wednesday that he and other liberal House members are becoming increasingly tired of Obama administration economic policies that they say are too focused on maintaining the stability of Wall Street firms and largely ignore “Main Street.”“A growing consensus in the caucus [believe that Geithner should be removed],” DeFazio said on MSNBC this evening, adding that some lawmakers are “considering questions regarding him and other economic advisers.”
DeFazio said that lawmakers have not yet drafted a plan to remove Geithner. The lawmaker also took aim at top Obama economic adviser Larry Summers for furthering many of the same policies favored by Geithner.
“We need a new economic team,” said DeFazio…..
Hey man, live by the populist pitchforks, die by the populist pitchforks. Hard to put that class war genie back into the bottle and it was a HUGE mistake to embolden the populist rhetoric flame throwers in the House…
This drum beat is getting louder. Dodd thinks Geithner is a drag on his polling, lol, and Simmons, Dodd’s GOP opponent called for Geithner’s resignation already:
A former House Republican running for the Senate in Connecticut is calling for Treasury Secretary Timothy Geithner to be replaced over his handling of AIG’s bailout.
GOP candidate Rob Simmons reacted to a report by Neil Barofsky, the inspector general of the $700 billion bailout program, known as the Troubled Asset Relief Program (TARP).
Barofsky’s report criticized the Federal Reserve Bank of New York, which Geithner led during the bailout, for a series of missteps that Barofsky said ended up requiring the government to provide additional support to AIG.
“The report issued yesterday by the inspector general for the TARP program is a deeply troubling account of Secretary Geithner’s failed management of the AIG bailout in which he cost taxpayers $13 billion in unnecessary new debt,” said Simmons, who appears to be the only candidate or office-holder to call for Geithner’s replacement in response to the report.The federal government committed more than $180 billion to AIG, which was crippled by poor investments and trades in credit default swaps, a financial derivative.
Simmons also attacked his opponent, Senate Banking Committee Chairman Chris Dodd (D-Conn.), in the statement calling on Geithner to be replaced.
“The cozy relationships between the bailed-out financial companies and powerful politicians like Tim Geithner and Chris Dodd are exactly why Americans have lost trust in Washington, D.C., and why we need new leadership with the skills and integrity to clean up their mess and get our economy back on track.”…
More great housing news:
US mortgage delinquency rates and the percentage of loans that entered the foreclosure process jumped in the third quarter, with both reaching record highs, the Mortgage Bankers Association said on Thursday.
The percentage of loans on which foreclosure actions were started rose to 1.42 percent in the third quarter, an all-time high, up from 1.36 percent in the second quarter and 1.07 percent in the third quarter of 2008.
…The delinquency rate for mortgage loans on one-to-four-unit residential properties rose to a seasonally adjusted rate of 9.64 percent of all loans outstanding as of the end of the third quarter of 2009, up 40 basis points from 9.24 percent in the second quarter and up 265 basis points from 6.99 percent one year ago, the MBA said in its National Delinquency Survey. The delinquency rate broke the record set last quarter. The records are based on MBA data dating back to 1972.
…The percentage of loans in the foreclosure process at the end of the third quarter was 4.47 percent, an increase of 17 basis points from 4.30 percent the second quarter of 2009 and 150 basis points from 2.97 percent one year ago.
The combined percentage of loans in foreclosure and at least one payment past due was 14.41 percent on a non-seasonally adjusted basis, the highest ever recorded in the MBA delinquency survey….
Update: CIT Group files bankruptcy; No Government aid for CIT….Thursday Market Mover: Paulson on the Hill…
Update: 11/2/09: Bad, sad news, CIT Group went belly-up this weekend despite the 2B taxpayer infusion and the Carl Icahn offer. Bad news for small business. But it is an attempt to dump the debt and live on, so maybe it will live to fight another day.
CIT Group Inc. filed for bankruptcy protection Sunday, in a final attempt to restructure and keep the doors open at the century-old commercial lender.
Now, the lender to nearly a million small and midsize businesses must maintain its customer base as it tries to rehabilitate under Chapter 11 protection. Most financial firms sell off assets or liquidate in bankruptcy amid fears that customers will draw down credit lines and spark a run on the bank.
But CIT garnered support from about 90% of voting debt holders for a prepackaged reorganization plan that could allow the lender to speed through Chapter 11 and emerge with a new business model by year’s end. Under the plan, bondholders will exchange their debt for new debt that matures later, as well as nearly all the equity in a reorganized CIT.
The bankruptcy stay would eliminate some $10 billion in debt from the lender’s balance sheet, the company said. CIT has been weighed down by more than $30 billion in bond debt.
A $2.3 billion taxpayer bailout extended to CIT late last year under the Bush administration will be wiped out in the bankruptcy. Common shareholders will be wiped out, too.
The plan is among the first attempts to restructure a financial firm in bankruptcy court and have it emerge relatively intact. The board approved CIT’s decision to seek Chapter 11 protection in a meeting Sunday. “The board appreciated that this is a [historic] sort of filing,” said a person close to the lender. “It is clearly unprecedented.”…
____________________
Charlie Gasparino is reporting on CNBC’s Kudlow that Sheila (Bair of FDIC) brought the hammer down and drew the line in the sand saying NO MORE BAILOUTS…shxt it would have to be on small business that the money train dried up eh?
Well, we love Sheila here at MiM (we wanted her or Jamie Dimon of JPMC for Treasury)and Timmeh was saying from Saudia Arabia that he was confident they would find a way to do the bailout, so we enjoy it when his toes are stepped on, bitter and petty that’s us today fer shure, BWAAAAHAAAA.
Hope Sheila’s foot met Timmeh’s axx on this one, FDIC should have the too big to fail wipeout authority IMO not the Fed and for Gawds sake not the Treasury….
CNBC on imminent CIT bankruptcy following FDIC and Treasury decision not to bailout…
… CIT Group, a major lender to small- and mid-sized U.S. businesses, said on Wednesday that talks with the government to bail out the company had ended, a development that could make bankruptcy likely.
…”Discussions with government agencies have ceased,” the New York-based company said in a statement. “There is no appreciable likelihood of additional government support being provided over the near term.”
The announcement came after last-ditch talks in which Treasury Department had been concerned about a worsening liquidity crunch at CIT over the last few days, and that government aid would not put the lender on a path to recovery….
Tomorrow BIG NEWS will be HANK PAULSON testifying on Capitol Hill about the Merrill BofA shenanigans, should be lots of fun. Hanks is the man who handed free market capitalism over to the government and then retired with hundreds of thousands of Golden Slacks shares…..Hank Hank Hank, when he sees whatis happening now how does he feel? He opened this door and TOTUS swagga’d through it….
Our MANY posts on Hank, Timmeh, AIG, Merrill, BofA, CITIBANK, Sheila, are too numerous to link…
Smashing Pumpins fan made video with footage of Tours in France, courtesy of buissonland
Update: Results will now be released Thursday…Market Mover Friday: Stress Test Results ‘delayed’ as Banks appeal findings…
Update: Results scheduled to be released Monday, now they say Thursday:
Results of the “stress tests” conducted on the nation’s 19 biggest financial institutions will be released late Thursday afternoon and include information on both the individual banks as well as aggregate data, CNBC has learned.
The results of the tests, which were conducted during April, will include estimated losses in certain loan categories as well as the banks’ resources to absorb potential losses, a source said. The source added that the information is not a solvency test….
The Federal Reserve will postpone the release of stress tests on the biggest U.S. banks while executives debate preliminary findings with examiners, according to government and industry officials.
The results, originally scheduled for publication on May 4, now may not be revealed until toward the end of next week, said the people, who declined to be identified. A new release date may be announced as soon as tomorrow, they said.
They really painted themselves into a corner on this:
At least six of the 19 largest U.S. banks require additional capital, according to preliminary results of government stress tests, people briefed on the matter said this week. While some of the lenders may need extra cash injections from the government, most of the capital is likely to come from converting preferred shares to common equity, the people said.
By pushing conversions, rather than federal assistance, the government would allow banks to shore themselves up without the political taint that has soured both Wall Street and Congress on the bailouts. The risk is that, along with diluting existing shareholders, the government action won’t seem strong enough.
Here is the best, most NO SHXT SHERLOCK line of the piece (and the process in fact):
Regulators and bank executives are concerned about how the disclosure is handled because weaker institutions could suffer a collapse in their stock prices.
You mean Uncle Sam is gonna tell us these guys cant survive a financial heart attack and investors might pull their money out? The hell you say! I AM SHOCKED! BWAAAAHAAAAAA frakkin maroons…..
Update: Stress Test White Paper lacks detail…
Update: From WSJ:
Fed White Paper on Stress Testing Procedure pdf here: FED Press Release here; Market averages back to their trend line of the day, Dow up 130 to 8086, S&P up 14 to 86 NAS up 39 to 1691
For release at 2:00 p.m. EDT
A white paper describing the process and methodologies employed by the federal banking supervisory agencies in their forward-looking capital assessment of large U.S. bank holding companies was published on Friday.
The white paper is intended to assist analysts and other interested members of the public in understanding the results of the Supervisory Capital Assessment Program, expected to be released in early May. All U.S. bank holding companies with year-end 2008 assets exceeding $100 billion were required to participate in the assessment, which began February 25. These institutions collectively hold two-thirds of the assets and more than half the loans in the U.S. banking system.
More than 150 examiners, supervisors and economists from the Federal Reserve, Office of the Comptroller of the Currency, and Federal Deposit Insurance Corporation participated in this supervisory process. Starting from two economic scenarios–a consensus estimate of private-sector forecasters and an economic situation more severe than is generally anticipated–they developed a range of loss estimates and conducted an in-depth review of the banks’ lending portfolios, investment portfolios and trading-related exposures, and revenue opportunities. In doing so, they examined bank data and loss projections, compared loss projections across firms, and developed independent benchmarks against which to evaluate the banks’ estimates. From this analysis, supervisors determined the capital buffer needed to ensure that the firms would remain appropriately capitalized at the end of 2010 if the economy proves weaker than expected.
The Supervisory Capital Assessment Program: Design Summary (287 KB PDF)
Released now, the parameters were apparently already out there, they used Case Shiller Housing Value Futures in their projections…CITI already tested itself against that same metric…
they are not giving the Tangible Common Equity number they want from the banks is it 3%? 4%? and they are also not giving out the specific projected losses or the size of the capital buffer the regulators want…..meanwhile the NY Post is reporting Vikram Pandit is out as CITI CEO shortly….
They gave the categories of loans they looked at and the counterparty risk but not the other parameters, reporters asked on the conference call…..
Will get up the CNBC clip as soon as it’s available
It’s managing expectations they say..a whole lotta nothin’ just came out…they Put on the Ritz for us…they don’t want anyone running the numbers before the banks shore up capital..
Next words will be the results of the stress tests on May 4th, I think the banks will begin to leak their own inner results before that..
The markets are turning down now, were up over 100 now up 50 on the Dow….
Submitted by IrishC
UK Annual Budget raises record deficit and increases taxes on income over $217k to 50%….
Neither a borrower nor a lender be, do not forget, stay out of debt! ….I learned it from Gilligan, our pols could take a lesson or two from Maryanne and the Skipper as well…
The UK’s top financial official unveils the annual budget and some better (perhaps they mean bitter!) news for the pound. The UK Chancellor plans record deficit and tax rises amid recession. (Bloomberg News)
Vodpod videos no longer available.
Video Update: GM CFO Ray Young says co won’t make June 1st $1Billion debt repayment…
Update 2: CNBC’s Phil LeBeau
Vodpod videos no longer available.
Update: Bloomberg:
General Motors Corp., trying to avoid a U.S.-backed bankruptcy on June 1, may close plants and scrap models as much as four years sooner than planned to lower its break-even point, people familiar with the effort said….
…The new plan may require GM to complete many of the reductions in models and dealers planned by 2014 as soon as next year, allowing earlier plant and job reductions, people briefed on the talks said. GM said March 31 that by 2014 it would trim dealers to 4,100 from 6,122, nameplates to 36 from 43, and U.S. assembly capacity to 2 million vehicles from 2.8 million.
The bond offer may include some framework of GM’s plan to cut $20.4 billion in obligations to a United Auto Workers union- run retiree-medical fund by more than half, two of the people said. The bond offer may disclose what portion, if any, of U.S. loans would be converted to equity, one person said.
–the flintstones car at the new york international auto show–
Breaking from WSJ on CNBC Chyron…
This is in addition to GM CEO Fritz Henderson commenting bankruptcy more likely…
they are really putting the hammer down on the bondholders..were I they, I would NOT cut a deal, I would wait for my bankruptcy judge, but the pundits say a MI bankruptcy judge will be under HUGE political pressure to wipe the bondholders out anyway…
say hello to Nancy Pelosi and Henry Waxman’s Little Friend..a Flintstone mobile, perhaps all we will be allowed to purchase until they reinvent the wheel..
A vehicle that meets Waxman/Pelosi emission standards
We will then get sued by people behind us as our feet produce a cloud of dust they can claim MIGHT somehow damage them as a pollutant…
Good Grief….
FASB Eases Fair Value Rules – Bloomberg
From Norwalk, CT: Interview with Patrick Finnegan of CFA Insititute (Bloomberg News)
Moderate in the Middle 