Bush's final veto?
Saturday January 10, 2009
Categories: Economics
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...
Add to Del.icio.us
Add to Technorati
Add to Digg
Add to Newsvine
Add to Facebook
Add to StumbleUpon
Advertisement
Advertisement
Search This Blog
Recent Posts
About Crunchy Con
Rod Dreher is an editorial columnist for the Dallas Morning News, and author of "Crunchy Cons" (Crown Forum), a nonfiction book about conservatives, most of them religious, whose faith and political convictions sometimes put them at odds with mainstream conservatives. The views expressed in this blog are his own.
Subscribe
Archives
Blogs Worth Reading
- Front Porch Republic
- The American Conservative
- Patrick Deneen
- Conventional Folly
- The American Scene
- First Things
- Andrew Sullivan
- The Plank
- Eunomia
- Get Religion
- Postmodern Conservative
- Alex Massie
- The Corner
- Contentions
- Sharon Astyk
- Barry Ritholtz
- The Oil Drum
- Mere Comments
- First Principles (ISI)
- Brian Kaller
Top Features
- Seven Patron Saints for Healing and Comfort
- A Prayer for Children Going to School
- Accidental Blessings
- Inspiring Barack Obama Inauguration Quotes
- Don t Take Away My Coffee
- Other People s Beds
- We Have It All
- Multifaith Mealtime Prayers
- Man in the Mirror
- John McCain: Constitution Established a 'Christian Nation'
Re: They've thrown $350 billion at the problem already, to no avail,
This is not correct. We still have a functioning banking system and LIBOR rates (as well as the RED spread) have almost returned to normal. The financial system is no longer in a state of shock, though it isn't hale and hardy and ready to leave the hospital yet.
They've thrown $350 billion at the problem already, to no avail
I'm not sure what "no avail" means, but given that there are probably more writedowns in the future:
housingwire.com/2009/01/07/downgrades-outpacing-tarp-funding-analyst/
ftalphaville.ft.com/blog/2009/01/07/50870/whitney-tarp-funds-go-down-the-downgrade-drain/
reuters.com/article/ousiv/idUSTRE5061JE20090107
online.wsj.com/public/resources/media/Financial_Strategy-20081119.pdf (505 KB)
...it's unsurprising that we're not seeing a lot of new lending. In addition, besides current and/or future undercapitalization, there's also:
-- Higher lending standards owing to risk aversion after being badly burnt on bad loans.
-- Lack of qualified borrowers, owing to private-sector over-indebtedness, asset deflation, & recession conditions (less income to service debt, more people/businesses going bankrupt).
If the Pres can bankrupt us while kicking off a shooting war with Iran, he can really proclaim: "Mission Accomplished!"
There is still enough time...
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.
Post a Comment
By submitting these comments, I agree to the beliefnet.com terms of service, rules of conduct and privacy policy (the "agreements"). I understand and agree that any content I post is licensed to beliefnet.com and may be used by beliefnet.com in accordance with the agreements.