Democratic Underground Latest Greatest Lobby Journals Search Options Help Login
Google

Denninger :Has President Obama issued an actual directive to Geithner?

Printer-friendly format Printer-friendly format
Printer-friendly format Email this thread to a friend
Printer-friendly format Bookmark this thread
This topic is archived.
Home » Discuss » Topic Forums » Economy Donate to DU
 
dixiegrrrrl Donating Member (1000+ posts) Send PM | Profile | Ignore Fri May-15-09 03:35 PM
Original message
Denninger :Has President Obama issued an actual directive to Geithner?

"May 13 (Bloomberg) -- The U.S. Treasury will tell banks to increase transparency in the over-the-counter derivatives market by making prices available on centralized computer platforms, accordin"g to people familiar with the plan.

Treasury Secretary Timothy Geithner may announce the decision as soon as today, said the people, who declined to be identified because they weren’t authorized to speak publicly. Geithner laid out a framework in March for increasing regulation of financial markets as the worst credit crisis since the Great Depression caused more than $1.4 trillion in writedowns by banks and financial companies worldwide.

That would be a dramatic change from Geithner's and Treasury's position (going back to Paulson)

- in fact, its an outright flip-flop.

Geithner has opposed this of course because it is not in the best interest of Goldman (and other sell-siders in the business) as price transparency means spreads contract dramatically and thus the skimming (and outright ripping off) that has gone on for the previous 10 years in this market will largely disappear."

Link: ( and always worth a read)
http://market-ticker.denninger.net/archives/P3.html
Printer Friendly | Permalink |  | Top
PM Martin Donating Member (1000+ posts) Send PM | Profile | Ignore Fri May-15-09 03:48 PM
Response to Original message
1. See this:
The various "moratoriums" have been claimed to be responsible. Balderdash. What is responsible for this is intentional sandbagging by the banks who have two separate but interlocked perverse incentives to do this:

*
They are praying that home values recover, so they do not have to take such a big loss (what's actually happening is the prices are continuing to go down, making the loss worse!) and
*
They are holding these notes at full face value on their books; if they foreclose and sell the property they are forced to mark the note to the market based on recovery value as recognized in a sale. If they do that many of these banks would be instantaneously recognized as insolvent.
Printer Friendly | Permalink |  | Top
 
DU AdBot (1000+ posts) Click to send private message to this author Click to view 
this author's profile Click to add 
this author to your buddy list Click to add 
this author to your Ignore list Thu Oct 31st 2024, 06:34 PM
Response to Original message
Advertisements [?]
 Top

Home » Discuss » Topic Forums » Economy Donate to DU

Powered by DCForum+ Version 1.1 Copyright 1997-2002 DCScripts.com
Software has been extensively modified by the DU administrators


Important Notices: By participating on this discussion board, visitors agree to abide by the rules outlined on our Rules page. Messages posted on the Democratic Underground Discussion Forums are the opinions of the individuals who post them, and do not necessarily represent the opinions of Democratic Underground, LLC.

Home  |  Discussion Forums  |  Journals |  Store  |  Donate

About DU  |  Contact Us  |  Privacy Policy

Got a message for Democratic Underground? Click here to send us a message.

© 2001 - 2011 Democratic Underground, LLC