FDIC’s Bair Says Credit ‘Thawing,’ U.S. Plans Working (Update1)

[Pirate Smile]

Source: Bloomberg

March 24 (Bloomberg) -- Federal Deposit Insurance Corp. Chairman Sheila Bair said credit markets are showing signs that liquidity is returning, and banks are starting to make money as government rescue programs begin working.

“I’m starting to get more optimism,” Bair said today in an interview on Bloomberg Television. “I think we are seeing some signs of thawing, some signs of improvement. Many banks are making money.”

U.S. efforts to end the worst financial crisis in more than seven decades, including $700 billion to rescue financial firms, are “starting to work,” Bair said. Treasury Secretary Timothy Geithner yesterday unveiled the latest plan, buying stressed assets using as much as $100 billion remaining in the bailout program. Bair called it “an important cleansing process” to revive the financial system.

The Federal Reserve will partner with private investors to buy the securities and the FDIC will guarantee the pools of real-estate loans to attract buyers. Bair said the program is part of an “exit strategy” to wean investors from public funds and bring private capital back into the banks.
“Even though they might have to take some loss initially to sell them, we think this is going to bolster their ability to raise some private capital,” she said. “Longer term, it’s going to be a critical part of cleansing the balance sheets.”



Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aVitBWg8Ej60&refer=home

[bluestateguy]

1. The biggest mistake we made with TARP was not compelling (yes, compelling) lending

We should have ordered all banks taking TARP to step up the lending.

[babylonsister]

3. Don't forget, 'we' had nothing to do with it.

There needed to be parameters, and there were none. That damned 'regulation'.

[babylonsister]

2. And a few days ago she was seeing no sunlight? Why should I

believe anything she says???

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=132&topic_id=8272727

FDIC's Bair: 'too big to fail' strategy must end

[TreasonousBastard]

5. What does one have to do with the other? She doesn't...

think highly of one aspect of the current strategy, but does see some light at the end of the tunnel.

(And for that matter, why should I believe anything a blogger has to say?)

[babylonsister]

6. Good point about a blogger, but changing tunes in the

middle of a negative rant concerns me. So now she's accepting, with reservations? Okay.

That I can relate to.

[Schema Thing]

8. I don't see that she is talking about the same things

in the two instances you are comparing.

[babylonsister]

9. I do. She claims it couldn't work, and then claims it's looking better? nt

[Schema Thing]

10. You must be referencing something other than the link you provided

because in the link you provided, she is criticizing the lack of a government regulatory agency (like the FDIC, but for business)to step in and keep businesses in check before the problem becomes only solvable by a massive bailout... because the company was "too big to fail". There is no dissonance that I can find between those statements and the ones in the op.

[babylonsister]

11. Sorry, I just find it amazing that in 5 days she changes her tune.

What will she say tomorrow?

[Schema Thing]

12. She.Did.Not.Change.Her.Tune.

[Imperialism Inc.]

16. She didn't change her tune. You just aren't understanding what she is talking about.

In one case she is in a discussion about what to do going forward RE: regulating big financial institutions. In the other case she is talking about the various policies and programs that we are doing right now to deal with the fact that we didn't change the regulatory structure a long time ago. Changing the regulatory structure now will not help fix the past but will stop it from happening again. Meanwhile the programs they have, unfortunately, had to do this time are working.

[Bread and Circus]

4. I just got a commercial loan from a small community bank. The loan officer worked

me hard to see if there's anything more I'd want to borrow. He said "we have tons of money to loan" and he seemed really serious about it. It's a conservative bank, so I took that as a good sign.

BTW, the loan was to start a new small business...not to float payroll or anything like that.

[TreasonousBastard]

7. We hav several small banks out here that..

are in great shape. They hold their mortgages and most other loans so they kept their lending standards up and they have loads of cash on hand. Banks don't make money sitting on cash, so they are looking to lend.

The curious problem they have is that their standards are still high so while they have money to lend, they have fewer customers who meet those standards.

[Left Coast2020]

13. I have not dealt with a bank since early 80's.

I have always relied on my Credit Union in Oregon. I have been with same CU since then--roughly 1985. There is a difference.

[antimatter98]

14. Except for 600K/unemployed per month, 75,000 foreclosures/mo, its working great---for the banks! n/t

[fasttense]

15. I've never had a problem getting a loan.

I get 2 to 3 ads a week in the mail for each category - car loans, house mortgages, new credit cards. I could get a loan tomorrow and have the money in my hands by the end of the day. The Real problem is getting a JOB to pay it back. Until we get JOBs, nothing the gubermint does to prop up the cheats and liars at the banks/Wall Street firms will make a bit of difference to the Real economy.

We need JOBs NOT LOANS. I thought this game of giving the middle class loans instead of good paying JOBs was over.

By the way, where is the results of the stimulus??? All those tax cuts the Republicons fought for, I've not seen a bit of it. Have you?

[pam4water]

17. I'd like to see some real numbers to back this up.