No one has yet put a price tag on that effort. But the administration’s diagnosis of what went wrong with the first attempt to right the financial system — that it was too small, and that the problem has ballooned in recent months — suggests that the next effort will almost certainly entail a far bigger commitment of taxpayer dollars than the $350 billion left from last year’s $700 billion effort to right the system, and probably far more than the stimulus package…
“We know what we need to do: inject capital into the banks, clean up their balance sheets, get rid of the bad loans in their portfolios that are clogging up the arteries,” a senior member of Mr. Obama’s economic team said, declining to speak on the record ahead of Mr. Obama’s news conference and Mr. Geithner’s announcement on Tuesday. “But the perception is that you are bailing out a bunch of Wall Street bankers, and even many Democrats are going to rebel at that.”
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What will it take?
What is our tipping point, as a nation?
artist on February 9, 2009 at 9:18 AM
If it is bigger than TARP I, Obama’s approval rating is going to be single digits.
BuckNutty on February 9, 2009 at 9:24 AM
Where is this money coming from?! All our paychecks are going to the government. Obama wants to be a dictator, Castro in Amerika. Watch, they’ll ration our food, electricity, State TV all day everyday, etc.
jencab on February 9, 2009 at 9:24 AM
Good God! What is wrong with these people?? Pretty soon they’ll be hiring Gov’t workers to print money in their basements. *Barney Frank raises hand*
anniekc on February 9, 2009 at 9:27 AM
Watch, they’ll ration our food, electricity, State TV all day everyday, etc.
jencab on February 9, 2009 at 9:24 AM
We already have state media, the rationing is next.
Reminder: He’s only been in office 3 weeks.
People wanted change.
artist on February 9, 2009 at 9:27 AM
I’m completely against TARP the way it was originally done.
But can someone here explain how you have an investment based economy without major investment banks? I made a longer post on this elsewhere, but even in a world where you slash capital gains taxes to zero, individual investors can not replace the role of major investment banks. You may get alot of new investment in new business ventures but who’s going to grease the wheel of basic payroll/inventory needs? Individual investors? Of course not. You need an investment infrastructure that was created by investment banks. But those banks are totally insolvent. And if I have 100,000 in debt and the government only gives me 50,000 am I going to lend that 50,000 out? Or am I going to lessen my debt? It’s a very simple model. And if you’re argument is that the government will FORCE the banks to lend…then you’re arguing for nationalization. Which is it?
DeathToMediaHacks on February 9, 2009 at 9:33 AM
apply for a Govt. job?
jp on February 9, 2009 at 9:34 AM
HOPE II
faraway on February 9, 2009 at 9:37 AM
Here’s the money quote:
“There’s a great profit opportunity here.”
Profit for who-Soros & cohorts?
Tom
marinetbryant on February 9, 2009 at 9:37 AM
Say the stimulus package is $1trillion – ok?
Start with January 1, 2009
2009 years since the birth of Christ
That’s 733,285 days
Divide $1T by the number of days since Christ’s birth
= spending $1,363,726 a day – since the birth of Christ
This stinking bill is the equivilant of spending $1.3m a day since the birth of Christ.
jake-the-goose on February 9, 2009 at 9:38 AM
Fools! All of them are completely clueless! They have no idea what they are doing!
sabbott on February 9, 2009 at 9:39 AM
Again, I’d like to remind everyone here what it means for the Executive Branch to have anywhere from a third to two thirds of the appropriations/redistributive power as all of Congress. Think of the possibility for the Executive Branch to buy votes and push legislation. Just remember the auto bailout, after no bill could be reached in the House or Senate, everyone turned to a new, “third”, way. This was one of the worst things Bush did while in office. And it’ll only get worsester now that we have a guy who doesn’t know TurboTax, with a GS lobbyist as his number two.
Weight of Glory on February 9, 2009 at 9:39 AM
DeathToMediaHacks on February 9, 2009 at 9:33 AM
1) It was govt ineptitude that caused the problems.
2) Not all investment banks are insolvent.
3) Even if the current investment banks go belly up, it’s not the end of the economy, because new investment banks will rise up to take the place of the ones that failed. That’s the way the economy works when the govt doesn’t muck things up.
MarkTheGreat on February 9, 2009 at 9:40 AM
Tax revolt.
Vashta.Nerada on February 9, 2009 at 9:41 AM
We tried warning America that this guy was a radical socialist.
artist on February 9, 2009 at 9:42 AM
The problem we’ve been witnessing is that when you’re dealing with others people money you take to high risks.
So , getting back to traditional investing doesn’t seem that bad.
the_nile on February 9, 2009 at 9:46 AM
Here’s the money quote to me:
Somebody help me, but I think what they’re talking about is Communism/Socialism/Marxism.
This is NYSlimes-speak for “the workers shall control the means of production.”
Jenfidel on February 9, 2009 at 9:46 AM
Comrades, welcome to the Revolution.
faraway on February 9, 2009 at 9:47 AM
VDH has a good post at the Corner contrasting the completely Irrationaly and absurd BDS out there, to the equally insane and absurd Obama Worship, which apparently encompasses a large chunk of the population.
its like a deadly cancer, but I think its a good thing point VDH is making and observing.
jp on February 9, 2009 at 9:47 AM
I think we all own this a little bit, but who’s fault this is isn’t really the point.
Which ones aren’t? And how did you come by this information? I haven’t seen the books, but why would investment banks which are run by people schooled in free market ideology be coming to the governemnt…AGAIN, if the situation was not dire. Everything we’ve seen indicates these banks are insolvent, mot notably, their unwillingness to lend after TARP I.
Um…are you serious? The investment banks we have lost have been around for generations, decades and in some cases over a century. The “new” investment groups out there are the ones that have gone the most belly up. Citigroup/AIG’s investment arena etc. I honestly am a little confused as to what you are saying…how do investment banks worth trillions of dollars just “appear” on the scene to replace the old ones? I’d seriously like a description of the process.
DeathToMediaHacks on February 9, 2009 at 9:47 AM
if the GOP and DNC really were like Mafia families like some claim, somebody would’ve offed Soros by now.
jp on February 9, 2009 at 9:49 AM
You’re right, on the surface it doesn’t “seem” that bad. But investment banks do more than invest in speculative markets. What’s the solution for shorterm payroll credit and inventory credit? Individual investors can’t do that investment banks have to. Would people be OK if the government just ran that aspect of the banking community and let individual investors run the share side of things?
DeathToMediaHacks on February 9, 2009 at 9:49 AM
Drudge headlines the Federal Reserve commitment to TEN TRILLION dollars propping up the banking system, and US Treasury even more. This is the Zimbabwe Option.
I’m going to keep linking to One Trillion Pennies until people get the message or start to complain about it.
Skandia Recluse on February 9, 2009 at 9:51 AM
oh my freaking gosh.
Seriously.
Where the frak are we getting these figures? DO THEY HAVE NO SHAME? These people are CRIMINALS!!! THEY HAVE TO BE STOPPED. THEY HAVE TO BE. Can we not do anything???!??!??? I’m boiling mad over here. What can be done?
I thought there was the “fierce urgency of Now” for this not-yet-even-passed stimulus and I assumed the rest of TARP 1 was in negotiations to put back since we didn’t need it. Where are these morons getting TARP 2? Oh my gosh. We are indentured servants.
Mommypundit on February 9, 2009 at 9:51 AM
the idiocy in all this is the Money is already out there to “stimulate”. Problem is the Govt. is interferring with it and keeping it on the sidelines. All they have to do is free up the economy, remove some of the stupid regulations, reduce Investment related taxes, our high Corporate Tax. And Presto: Stimulus without taking on ANY DEBT as a nation.
of course what this really is, is a combinations of Utopian minded Idiots and Crooks within the DNC paying off people that got them elected. Possibly trying to force a new Depression again like the last to make way for the last big Power Grab and Enslavement of us all.
jp on February 9, 2009 at 9:52 AM
One can only dream…
Mommypundit on February 9, 2009 at 9:54 AM
At this point, this is the only thing which makes sense. I have no illusions that these people are “well meaning.” I think they utterly hate our country and our success and seek to undermine it to further their pet ideologies however/wherever it takes them.
Mommypundit on February 9, 2009 at 9:57 AM
I’ll say it again: everybody move to Texas.
We’ll secede by August or so.
TexasDan on February 9, 2009 at 9:59 AM
Goodbye, America.
Bugler on February 9, 2009 at 10:01 AM
Goldman Sachs is solvent. Morgan Stanley probably is too. Neither of them loaded up with mortgage-related junk. But they are going to be hamstrung for a while by the bank capital rules, since they chose to become banks.
rockmom on February 9, 2009 at 10:01 AM
goodbye America it was nice knowing you. Hello U.S.S.A.
unseen on February 9, 2009 at 10:02 AM
What I want to know is, when do the witch trials and the prosecutions start? So far, Congress has held a grand total of two hearings on these Wall Street clowns who got us into this mess, and apparently none of them are facing any kind of criminal charges. In 2002 Congress held 60 hearings on Enron and WorldCom, and the Bush Administration prosecuted everyone and threw Ken Lay in jail.
rockmom on February 9, 2009 at 10:04 AM
Some say the hyperinflation of the Weimar Republic was planned intentionally, in order to eliminate Germany’s national debt.
We you consider Mr. “Never waste a crisis” and our Social Security/Medicare obligations, kinda makes ya wonder…
ZenDraken on February 9, 2009 at 10:12 AM
Revelation 9-23
And the kings of the earth, who have committed fornication and lived deliciously with her, shall bewail her, and lament for her, when they shall see the smoke of her burning,
Standing afar off for the fear of her torment, saying, Alas, alas that great city Babylon, that mighty city! for in one hour is thy judgment come.
And the merchants of the earth shall weep and mourn over her; for no man buyeth their merchandise any more:
The merchandise of gold, and silver, and precious stones, and of pearls, and fine linen, and purple, and silk, and scarlet, and all thyine wood, and all manner vessels of ivory, and all manner vessels of most precious wood, and of brass, and iron, and marble,
And cinnamon, and odours, and ointments, and frankincense, and wine, and oil, and fine flour, and wheat, and beasts, and sheep, and horses, and chariots, and slaves, and souls of men.
And the fruits that thy soul lusted after are departed from thee, and all things which were dainty and goodly are departed from thee, and thou shalt find them no more at all.
The merchants of these things, which were made rich by her, shall stand afar off for the fear of her torment, weeping and wailing,
And saying, Alas, alas that great city, that was clothed in fine linen, and purple, and scarlet, and decked with gold, and precious stones, and pearls!
For in one hour so great riches is come to nought. And every shipmaster, and all the company in ships, and sailors, and as many as trade by sea, stood afar off,
And cried when they saw the smoke of her burning, saying, What city is like unto this great city!
And they cast dust on their heads, and cried, weeping and wailing, saying, Alas, alas that great city, wherein were made rich all that had ships in the sea by reason of her costliness! for in one hour is she made desolate.
Rejoice over her, thou heaven, and ye holy apostles and prophets; for God hath avenged you on her.
And a mighty angel took up a stone like a great millstone, and cast it into the sea, saying, Thus with violence shall that great city Babylon be thrown down, and shall be found no more at all.
And the voice of harpers, and musicians, and of pipers, and trumpeters, shall be heard no more at all in thee; and no craftsman, of whatsoever craft he be, shall be found any more in thee; and the sound of a millstone shall be heard no more at all in thee;
And the light of a candle shall shine no more at all in thee; and the voice of the bridegroom and of the bride shall be heard no more at all in thee: for thy merchants were the great men of the earth; for by thy sorceries were all nations deceived.
JackS on February 9, 2009 at 10:14 AM
OH my
jake-the-goose on February 9, 2009 at 10:18 AM
Publicized work stoppage for a few days, file IRS returns on time, but delay payments for 6 months. Change your witholding payroll deductions to allow the least possible amount to seep through.
Send a message. If we keep on allowing them to do what they are doing, they have no reason to stop.
a capella on February 9, 2009 at 10:21 AM
I’ll say it again: everybody move to Texas.
We’ll secede by August or so.
TexasDan on February 9, 2009 at 9:59 AM
I would….but the spiders down there…ugh.
Bishop on February 9, 2009 at 10:24 AM
So outside of wailing about socialism, the plan to fix the financial sector from the right is……..
DeathToMediaHacks on February 9, 2009 at 10:46 AM
I read recently that Texas is now one of the few states that are majority minority. In the Pres. election, 44% of Texas’ voters went for Obama. With near anarchy raging just across the border in some of your cities, continued illegal immigration (I thought the fence was complete?), possible amnesty and all the new voters that entails, and nearly half your population already Democrat voters, why/how do you think Texas will not share the same fate as the rest of us?
JiangxiDad on February 9, 2009 at 10:48 AM
I think it will happen. I think the internet will facilitate it. I think it will work. It’s a cyber Galt’s Gulch. (Good name for a website devoted to coordinating non-violent civil disobedience.)
JiangxiDad on February 9, 2009 at 10:50 AM
Increasing racial diversity is why we have to do TARP I/II? How is your conclusion “blame the illegals” or blame the poor people. Poor, non-citizens ran investment banks? Whatever the problems caused by illegal immigration it is a wierd and xenophobic stretch to claim illegals from Mexico for the finacial sectors meltdown/self implosion. But I guess thats what passes for conservatism these days?
DeathToMediaHacks on February 9, 2009 at 10:51 AM
Clueless Hack (9:33)
Obviously you can not do arithmetic, or are completely ignorant, or cling to a faith based ideology.
Market cap (2008) top five investment banks ~34 Billion.
That is billion with a B (bee) not to be confused with Trillion with a T (tee) which is 1 thousand times larger.
Meanwhile private investors total investment in company stock (using the wiki ) ~57 Trillion (thats trillion with a tee) (close enough for first approximation)
Clueless Hack, you have been refuted so many times on this site do you not realize you have zero credibility here?
Skandia Recluse on February 9, 2009 at 10:59 AM
I responded to a comment that conservatives ought to move to Texas. I questioned whether Texas can remain conservative in the face of changes afoot. I said nothing about Tarp, nor anything about illegals and the Wall Street meltdown in that comment. You added 2+2 and got 5.
JiangxiDad on February 9, 2009 at 11:04 AM
How strange that I thought you’d be talking about TARP in the TARP thread….
Private investors:investment banks = ant colony:queen. Investment banks aren’t just important because of their capital advantage over individual investors (as individuals) their power comes from their ability to use capital to direct the market in certain ways. Where does the capital come from for corporations to go public in the first place, the three old ladies who’ve pooled their savings and decide to buy some google stock? I don’t think so. Anyone who used to have enough money to direct investment into new business ventures is probably having some serious liquidity problems right now. A capital gains tax is going to inspire people to liquify things like gold, any commercial real estate holdings, or non-bad investments. It’s not going to recreate a bunch of new business ventures, you need investment banks.
You’re also missing the role investment banks play in greasing the wheels of payroll/inventory re-up. Are individual investors going to come together and make payroll credit function without investment banks? Maybe we just won’t have financing for payroll anymore and people’s wages will vary depending on how much product is sold that week, of course they’ll have to wait until after inventory gets bought and delivered.
DeathToMediaHacks on February 9, 2009 at 11:13 AM
!!!
PattyJ on February 9, 2009 at 11:16 AM
From article;
They continue to use language that does not place blame where it belongs. We’re in this mess because of Government meddling, not because of some mysterious outside influence that ‘blows holes’ in financial systems. BUT, something does indeed ‘BLOWS’.
Freaking revisionists are going to doom us all. Why do they consistently remember history differently from what actually happened? The lessons from the Japanese is what we’ve been saying, leave it alone! Constant fiddling with it is going to make it worse.
Argh!
cryptojunkie on February 9, 2009 at 11:21 AM
True conservatism holds that there is nothing to fix, other than the hands of politicians (which should be subjected to sharia law on stealing).
There is a problem BECAUSE certain political factions SAY there is, and then they PROPOSE solutions to solve it.
Until all you guys STOP accepting alleged facts without proof, there is no possibility of seeing absolute reality.
“Fixing the problem” is what Madoff couldn’t do because he was prevented from perpetrating his Ponzi scheme. I maintain that there was no problem for Madoff UNTIL he was stopped from continuing. (An alternative way to visualize this is to see it as a game of musical chairs. The shortage of chairs does not matter as long as the music is playing.) Madoff didn’t have a Fed Reserve account or else he’d still be in business AND he’d be eligible for bailout funds.
The problem is political, not financial.
platypus on February 9, 2009 at 11:26 AM
Why do we need both?
drjohn on February 9, 2009 at 11:30 AM
ClueLess Hack (11:13)
Yes. That is exactly where the pool of investment money comes from. People like myself who lived in an 18 wheeler for ~20 years, not spending money, but investing it. School teachers who put some of their wages in a retirement fund.
Donny Deutsch on CNBC last night (The Entrepreneurs) documents several examples of individuals who started from literally zero, building multi million dollar companies with their bare hands.
You don’t believe it because you cling to a faith in a failed ideology. An ideology that believes that individuals have no power over their own futures.
Skandia Recluse on February 9, 2009 at 11:35 AM
But don’t question their patriotism.
crr6 on February 9, 2009 at 11:41 AM
Or their sense of self-preservation.
platypus on February 9, 2009 at 11:42 AM
That’s why I quoted what I was responding too. But because you are confused (and the self-appointed thread-minder), I’ll pay the fine. Paypal?
JiangxiDad on February 9, 2009 at 11:43 AM
With no help from investment banks ever? Is this the norm in our economy? No…of course not.
And you never addressed the issue of payroll.
DeathToMediaHacks on February 9, 2009 at 12:01 PM
We are using NOTES for money, not CERTIFICATES. Investment banks as a category is a New Deal creation, not an inherent truth.
And the payroll thingy gets fixed (with substantial pain) as soon as workers are paid for production with profits used as savings. Because the sin of fractional reserve banking works so well (ha!), business owners copied it so they could pay their workers with OTHER PEOPLE’S MONEY. Which makes the gross profits look like net profits.
It is the bastard offspring of an unholy fornication of cash basis and accrual basis.
platypus on February 9, 2009 at 12:09 PM
The fallacy in your argument is that success in business is not possible without investment banks.
Another presumption in your argument is that investment banks are the only kind of banks in the US, and banks are the only source of credit.
Another presumption in your argument is that payroll can only be met when companies borrow the money they use to pay their employees. Those business that follow that practice do so only at great risk, and are the first to lay off when economic activity slows. You seem to be unaware of the power of cash flow, although you allude to it when you make the false claim that employees won’t get paid until product is sold and paid for. You seem to be unaware of prudent financial management where cash reserves are kept, and seem to presume that all businesses operate without any cash reserves.
I bring these points into the discussion knowing full well that you will reject them out of hand because you continue to reject fact based arguments, observations based in reality, and cling to a faith in your ideology, twisting the meaning of words to support your rationalizations.
Skandia Recluse on February 9, 2009 at 12:18 PM
If they had taken my advice in October and passed a $20 trillion dollar package, we wouldn’t be in this mess. February, now we’ll need $50 trillion dollars.
lorien1973 on February 9, 2009 at 12:27 PM
I have a sneaking suspicion that we’re all going to know what a “quadrillion” is before the year is out. :-/
Aitch748 on February 9, 2009 at 1:02 PM