The president who didn't veto a single piece of legislation until well into his second term may, it is reported, use his veto to get his fingers on the $350 billion remaining in the TARP funds -- that is, if Congress won't let him have it.
I suppose you couldn't technically call that stealing, but come on! They've thrown $350 billion at the problem already, to no avail, and as has been widely reported, they have no way of tracking how banks are using that money. And now, with nothing in place to hold recipients accountable, Bush wants to grab the rest of the money and throw it down from the balcony, like ticker-tape? What the hell is this? Do you really want to hand the Bush people another dime after the way they've blown it?
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Anyone who thinks there's going to be much lending going on anytime soon is taking the short end of a bet. Two to five years before any serious recovery is my guess.
Remember what started this whole banana-patch going: the discovery of bad mortgages and their derivatives having infected banks' portfolios. The lending problem won't be corrected until the banana-patch is eradicated. Meaning that a great many banks will have to have scanned and isolated and eradicated most if not all of their toxic loans. That process has barely begun.
Even after the banks have straightened their portfolios out, they will still have to raise their loan standards. Borrowers will have to get their own indebtedness situation under control. And to make matters worse, I'm sure that various powerful people in the Government are going to make matters worse by trying to direct and control large parts of any new lending, the better to help their politically-connected supporters/campaign contributors.
This mess isn't going to go away anytime soon. Three to five years, for a scratch-job. Actually resolving the problem ? Try 15 years, if it's going to get solved at all.
Meanwhile, the entitlements problem isn't getting any smaller, nor is it getting any further away. Ain't we got fun ?
Your servant,
Lord Karth
LK - concur. There's an additional concern: even given financial institutions with pristine balance sheets, without trustworthy ratings agencies, I can't see how the bond markets (which supply much credit, both to financials & other companies) will be able to function government life-support (e.g., guarantees of some sort). See, e.g.,
economistsview.typepad.com/economistsview/2008/12/the-value-of-re.html
economistsview.typepad.com/economistsview/2008/11/the-need-for-re.html
brontecapital.blogspot.com/2008/11/brad-delong-question-and-how-to-design_24.html
Although now that I think about it, perhaps this could be alleviated somewhat via a massive shift back towards the use of FDIC-insured banks as the central means of credit intermediation. Then again, these institutions aren't exactly infallible either, as I suspect the coming bank failures from Option-ARMs, Alt-A, & CRE will prove in spades....
Maybe it isn't considered "serious" lending" if you just want a loan to buy a house, but we have a daughter whose house purchase is about to close, a son who has approval for a mortgage when he find the house he wants, and we have the same to buy a certain rental if the numbers look right to US.
Good for you AML. I'm sure you and yours' are sitting pretty right now.
Every been part of the middle class?
I am totally disappointed in Pres. Bush. I never dreamed he would be such a big spender. He never met a spending bill he didn't like. We were lucky here in Texas that we had a Legislature to keep things under control.
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