16 replies [Last post]
bitmasher's picture
Offline
Moderator
Location: Colorado
Joined: 02/27/2002
Posts: 2973
Obama, Geithner Get Low Grades From Economists

U.S. President Barack Obama and Treasury Secretary Timothy Geithner received failing grades for their efforts to revive the economy from participants in the latest Wall Street Journal forecasting survey.

http://online.wsj.com/article/SB123671107124286261.html

It seems that Krugman is also concerned about the Obama/Geithner performance to date.

http://www.nytimes.com/2009/03/09/opinion/09krugman.html?_r=1&scp=3&sq=o... economists&st=cse

I concur with Krugman and the majority of the WSJ economists. The first shots at attacking the recession should have focused on the banks and the credit markets.

I'm still amazed that we are dealing with the after effects of a housing bubble. Housing prices began ticking up from normal under the clinton years and continued to rise through the bush years. Off and on over the last decade some economists would say they were concerned about a housing bubble and the havoc it would wreak as the collapse spread. They were ignored or overruled by more powerful voices, such as Alan Greenspan. I remember reading editorials that said a housing bubble was simply not possible and that even if prices were inflated they could not "burst" like the various stock exchanges.... Remember we learned our lessons during the S&L scandal and that could never happen again. eye roll

http://mysite.verizon.net/vzeqrguz/housingbubble/

Offline
Joined: 07/29/2008
Posts: 723
Obama, Geithner Get Low Grades From Economists

Not being happy with Geithner and Obama are about all your two sources agree on.

I didn't see who the WSJ economists were but I'd asume Wall Street and Banking types. They want Obama to pump even much more money into banks. Then the stocks and bonds of the banks become worth more and they have some breathing room. Look what happened yesterday, that's widely attributed to Citi claiming a profit.

Krugman has wanted the banks to go into recievership for at least a couple of months. And so do a lot of other people, McCain, Greenspan, the two Grahams, and so on. They know that the banks total worth is less than the money we're spending. From a money veiwpoint it would be cheaper, just like we do with small banks.

Obama is doing option #1 but not fast enough or big enough to make the bankers happy, and he hasn't done option #2, but you won't know until he does anyway. They don't warn you before taking over banks, it happens on Fridays. FDIC is hiring big time.

Obama also has other goals than Wall Street. His concern is the economy, not always the same thing as the market.

The one thing the folks in both of your links don't know is how much toxic assets are out there. We don't even know were the billions we gave Citi last week went! Geithner and Sommers are both insiders, that's why they were hired, fox turned gamekeeper. But we're putting a lot of trust in them.

The toxic assets aren't bad loans. They are wagers on what someone thinks a big bundle of those bad loans might be worth. Loans for everything. Credit default swaps were unregulated. A legal way to gamble without any oversight.

All the rest is just noise. The banks are the thing that is going to determine how deep and how long this is going to be. If the bad stuff were small it would have been dealt with already. When the stress testing is done we might find out.

Meanwhile the markets will continue down until we find out what's in the banks.

bitmasher's picture
Offline
Moderator
Location: Colorado
Joined: 02/27/2002
Posts: 2973
Obama, Geithner Get Low Grades From Economists
civetcat wrote:
The toxic assets aren't bad loans.

I think you need to think about that a little more. Where did this credit crisis that spilled over into the broader economy start? In sub-prime defaults and the default calls which brought down AIG. Whether the loan is held in its entirety by a bank, by pseudo-government entities (fannie/freddie), or in part by a myriad of investors is irrelevant. S&L's collapsed on the speculative commercial real estate market. The current credit market collapsed on a speculative real estate market. The mechanism is different but the root problem (like all bubbles) is the same... too much easy credit and too much risk taking.

bitmasher's picture
Offline
Moderator
Location: Colorado
Joined: 02/27/2002
Posts: 2973
Obama, Geithner Get Low Grades From Economists

The economists are from a wide collection of areas some privately employed and some at universities. I thought you read the WSJ? The panel of economists have been a part of the paper for as long as I can remember.

http://online.wsj.com/article/SB123445762914578103.html

There is a link down the page that mentions the economists in the panel. Some are from wall street and banking companies, not surprisings, I would hope those groups employee some economists and those economists participate in the public debate about where the economy is going.

Offline
Joined: 07/29/2008
Posts: 723
Obama, Geithner Get Low Grades From Economists

I meant to say the toxic assets aren't all real estate loans, they are any debts that could be bundled and securitized. Student loans, credit card loans, anything that is possible to gamble on. If it were only the loans themselves we it would be cheaper to just pay them off. It was the bundling of that risk, and then gambling on what it was worth, that drove the price of those risks beyond the actual value of the loans themselves. I'm reminded of tulips and pet rocks.

No I don't read the journal that often, and when I used to, I read more of the international sections. I know, why else read the joural, but ecenomics never interested me that much. It costs money online!

bitmasher's picture
Offline
Moderator
Location: Colorado
Joined: 02/27/2002
Posts: 2973
Obama, Geithner Get Low Grades From Economists

Ok, I'm with you on that. However I see the consumer debt (as opposed to the real estate debt) as a secondary effect, dislodged from its normal rates of default from the spreading housing market dysfunction.

expatriate's picture
Offline
Location: Arizona
Joined: 10/26/2002
Posts: 3206
Obama, Geithner Get Low Grades From Economists

Wait a minute...we're talking Civet, right? The guy who said that investment isn't that important to the economy and rarely helps new businesses get started? He's claiming to have a better understanding of this than the Wall Street Journal's panel of economists? Laugh Laugh Laugh

Offline
Joined: 07/29/2008
Posts: 723
Obama, Geithner Get Low Grades From Economists

I looked into the WSJ enonomists

76% of the economists surveyed by the WSJ said they supported either McCain or Romney on economic policy over Obama or Clinton (Feb 08)

August 2008: 49% said the recession had already ended, and 50% believed the economy would be the same or better by election day.

December 2008: the economists predicted the unemployment rate would peak at 8.4%. It's already at 8.1% and rising.

These are a group of conservatives, the overwhelming majority of whom backed John McCain's economic policies in the presidential campaign. Moreover, they aren't too bright: half of them thought the recession ended seven months ago.

this was a survey of the same xxxxx xxxxx who got us into the mess President Obama is now trying to extract us from.

Thank god they don't approve of the job he's doing

I used to read the WSJ for the writing. Insightfull look into many things. Being bought by Murdoch and hiring that hack Paul Gigot sealed the deal for me. I always assume whatever they say isn't true, but is written for partisan purposes only, similar to Fox but more high brow, same company. I only wish they agreed with Krugman.

Offline
Moderator
Location: Florida,USA
Joined: 08/21/2003
Posts: 1550
Obama, Geithner Get Low Grades From Economists
civetcat wrote:
this was a survey of the same xxxxx xxxxx who got us into the mess President Obama is now trying to extract us from.

OK so where were all these brilliant minds when all the bad stuff was happening?
Wasn't Obama a Senator? Why didn't he propose legislation to do something about "this mess" earlier when he saw it coming, he did see it coming didn't he?
Geithner, where was he when all of this mess was just getting started? He surely saw it coming also. Didn't he?

Dems controlled congress for 2 years before this election, where were they?
Surely THEY saw it coming also. didn't they?

The recession started in Aug 07.....hummmm Dem controlled congress since 06. Why didn't they do anything then?

Fact is they did see it coming and did nothing.
It has been developing since 1994 but because it would have cut out entitlements the Dems would do nothing to try and stop it. Now with Obama all they are doing now is throwing good money after bad.
Bush did nothing either so he gets no free pass but it was a dem passed Act that was the start of all of this mess.

Offline
Joined: 07/29/2008
Posts: 723
Obama, Geithner Get Low Grades From Economists

Actually the recession began in Oct 07 look at a chart sometime.

For a middle class person the recession began around 01 when thier income started to go down. Or more likely 81 when for the first time in a couple hundred years increases in productivity pulled far away from income. Be that as it may. Blaming a Democratic majority in Congress is pretty lame and shows either a lack of understanding of the US government or an intentional misleading.

Quote:
The day-to-day enforcement and administration of federal laws is in the hands of the various federal executive departments,

http://en.wikipedia.org/wiki/Federal_government_of_the_United_States

Offline
Moderator
Location: Florida,USA
Joined: 08/21/2003
Posts: 1550
Obama, Geithner Get Low Grades From Economists
civetcat wrote:
Actually the recession began in Oct 07 look at a chart sometime. ,

ohhh 2 months. You really got me there.
I plan on looking at my Hummingbird Chart Recorder shortly.

civetcat wrote:
For a middle class person the recession began around 01 when thier income started to go down. Or more likely 81 when for the first time in a couple hundred years increases in productivity pulled far away from income. Be that as it may. Blaming a Democratic majority in Congress is pretty lame and shows either a lack of understanding of the US government or an intentional misleading.

I am a middle class person and my income has more than doubled since 01. It is only now, Obama in 09, has it not grown and has shrunk slightly.
So, mabe YOU need to educate yourself and get your puny 19 brain cell strong mind outta the koolaid jar and read up on how government works because from your post you obviously know nothing about how government works.

civetcat wrote:
Quote:
The day-to-day enforcement and administration of federal laws is in the hands of the various federal executive departments,

http://en.wikipedia.org/wiki/Federal_government_of_the_United_States

Ahh now I see, you get your US government education from Wiki.
Now examine your quote above.
Who makes those federal laws?
Why don't you answer my questions? You do know the answers don't you?
Where was Obama when this was going down? Geithner? Pelosi? Frank?
I'll answer the question for you, they were playing politics and doing what was passed by congress in the Clinton administration and their Dem controlled congress, that being the The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 that started the ball rolling, so even now the system for failure is still in place and Obama, Geithner, Pelosi, or any other Democrat is going to do anything about it.

Related Forum Threads You Might Like