Feb. 10 (Bloomberg) -- The U.S. Senate has enough votes to pass an $838 billion economic stimulus package and clear the way for negotiations with the House to get a bill to President Barack Obama’s quickly.Are there really any AAA-rate new mortgage backed debt around? Who can believe in such a foolish statement?
Feb. 10 (Bloomberg) -- Treasury Secretary Timothy Geithner pledged government financing for as much as $2 trillion of efforts to spur new lending and address banks’ toxic assets, seeking to end the credit crunch hobbling the economy.
Now, the Treasury will provide up to $100 billion to support the expanded $1 trillion Fed program. The central bank said in a statement that eligible collateral may be broadened to include other newly issued AAA-rated debt including commercial mortgage- backed securities and private-label residential mortgage-backed securities.
Feb. 9 (Bloomberg) -- The stimulus package the U.S. Congress is completing would raise the government’s commitment to solving the financial crisis to $9.7 trillion, enough to pay off more than 90 percent of the nation’s home mortgages.And in the end, Geithner spent so much time playing smoke and mirrors that his speech today did nothing but sink the equity markets (see Bloomgerg report) as it wasn't credible at all.
While incompetent Obama forced the Senate to pass a stimulus plan which will result in wasting hundreds of billions of dollars (actually, it is more accurate to say that they will transfer hundreds of billions of dollars from the US Citizens and foreigners holding US dollars to the Establishment and Corporatocracy). He uses the same tactics as Bush, spreading fear and lies, in order to get what he wants:
(Boomberg) In Elkhart and in Washington, the president painted a dire picture of the economy. He called the recession a “full-blown crisis” and warned “the problems are accelerating instead of getting better.”Even the Republicans seem to get it this time, after being supportive of the Bush/Paulson plan which was really the same, but smaller. That's what we call ethics and integrity:
“It is only government that can break the vicious cycle, where lost jobs lead to people spending less money, which leads to even more layoffs,” Obama said. “And breaking that cycle is exactly what the plan that’s moving through Congress is designed to do.”
“The legislation moving its way through Congress bears little resemblance to what President Obama described at tonight’s press conference,” Republican National Committee Chairman Michael Steele said in a statement. “The spending bill written by Nancy Pelosi and Harry Reid is filled with unnecessary and wasteful programs that will saddle future generations with massive debt.”The worst part is that Obama knows the real solution:
(Bloomberg) “We are going to have to work with the banks in an effective way to clean up their balance sheets so that some trust is restored within the marketplace,” Obama said in his first prime-time news briefing. At “any given bank they’re not sure what kinds of losses are there. We’ve got to open things up and restore some trust.”But do you think they would ask the banks to just disclose their balance sheets and level-3 assets? Of course not, because then the obvious reality would blind them all: that the financial system is bankrupt! Instead, they are going to rob the people and save their friends and the current system.