On Fri, 08 May 2009 00:18:27 -0500, cavelamb
wrote:

Timothy Geithner's interview (thanks John) was most interesting.

Rethinking the way things ought to work...

One thing he said that I thought made sense was "the only reason
that one penny was given to these banks is to keep the people who
depend on them from (going under).

Which may well be true, but you need to find out how he defines
"people." It appears that his concern is limited to "people"
like himself, with high positions in the banks, earning huge
bonuses, or those that have huge amounts of credit with the bank,
or those likely to face prison for fraud if the banks go "belly
up." The casual acceptance of bank refusal to lend to credit
worthy borrowers after the injection of billions of taxpayer
dollars under TARP and trillions by the secretive FRB, especially
for business expansion/operation and the general gouging on
credit cards clearly shows that there are "people" and then there
are "people," [some of whom are more equal than others] Remember
Geithner's background and history, and firm advocacy of the Leona
Helmsly rule ["Only little people pay taxes"].
http://en.wikipedia.org/wiki/Timothy_Geithner
http://online.wsj.com/article/SB123187503629378119.html


But in the end it's a "confidence game" (maybe in BOTH senses).

But mostly...

Do you have confidence in this recovery?
Do you have confidence in this economy?

In this sense, all government, insurance, religion, and almost
all commerce, all finance and paper money, etc. is a "confidence
game." As soon as the "confidence" goes, the game is over.

"Incantation" is a well know and frequent cure or at least
attempted cure for this loss of confidence. This is greatly
helped because people both want and need to believe.

Now go out and sacrifice two goats and everything will be fine...


George said:

The "stress test" results are out, but the single most important
comment/observation IMNSHO is that "Together, the 19 firms that
took the test hold two-thirds of the assets and half the loans in
the U.S. banking system."

All my emerging confidence just evaporated again...
----------
This is very much a good news/ bad news situation.

The bad news is the gross over concentration of wealty/power in
far too few hands of totally unaccountable and insulated/isolated
[short of a violent revolution] people. These are no longer
"private businesses" in the usual sense, but quasi governments,
larger than many states and indeed, all but a handful of
countries in the United Nations in terms of GDP.

The good news is that the problem has been identified, and the
"vital few" as opposed to the "trivial many" have been named.

The problem is that just thinking about taking on these
corporations and individuals makes the individuals that must act
in Congress, the Administration and the bureaucracy pee in their
pants and/or grab their billfold.

In the short term the directors, officers and cadre management of
at least the top ten organizations must be immediately replaced,
possibly with a 3-5 year ban on employment in the financial
services sector. Given the quasi-governmental status of these
companies, and the huge amounts of taxpayer funds "invested," the
seating of one or more governmental employees as directors, to
serve as "peoples" representatives, seems highly desirable, and
it would be imperative for them to serve on the "compensation"
and "executive" committees, if only to keep an eye on things.

In the longer term, a policy *MUST* be developed and implemented
to prevent such economic over-concentration. One suggestion is
the imposition of a graduated "franchise" tax on both deposits
and loans, to be paid by the financial institution, such that it
will no longer be economically viable to amass such huge
financial positions. A parallel suggestion for all companies,
not just the financial sector is the imposition of a [steeply]
graduated gross receipts/sales tax, both to discourage the
formation/preservation of these mega corporations [that are too
big to fail], and to insure they pay their fair share of the
costs to run government, i.e. taxes.


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).