'Bad Bank' proposals: will this really happen?

[GRG55]

Re: 'Bad Bank' proposals: will this really happen?

As was discussed on another thread a short time back, the Obama economic team appointments are pretty well all from Goldman alumnus Robert Rubin's dugout. Summers, Geithner, the lot. All except Volcker, who we can hope will prevail...but who knows.

They claim the current catastrophe was unable to be predicted, and some claim that even if it had been predicted it was unpreventable. All this despite ample public evidence to the contrary, iTulip included.

Each evening last week I watched a number of the interviews and panels from Davos. It became a painful exercise. The financial elite are on the defensive, claiming over and over that the regulators were at fault, not them. I listened to so many high profile participants make this claim, including JP Morgan's James Dimon and former chair of the National Economic Council, Laura Tyson, I almost threw up [Tyson actually looked for absolution from the moderator because some members of her family lost money with Madoff :p ].

The probabilities seem to be stacking up that we should expect more of the Hank Paulson strategy of moving debt from private to public balance sheet, and not much else. They all came out of the same school.

Not looking that optimistic in this regard at the moment, according to Bloomberg. Maybe just good media, maybe something to it?...

Volcker Chafes at Obama Panel Delay, Strains With Summers Rise

Feb. 5 (Bloomberg) -- Paul Volcker has grown increasingly frustrated over delays in setting up the economic advisory group President Barack Obama picked the former Federal Reserve chairman to lead, people familiar with the matter said.

Volcker, 81, blames Obama’s National Economic Council Director Lawrence Summers for slowing down the effort to organize the panel of outside advisers, the people said. Summers isn’t regularly inviting Volcker to White House meetings and hasn’t shown interest in collaborating on policy or sharing potential solutions to the economic crisis, they said.

While Summers, a former Treasury secretary, oversees the official White House economic policy apparatus, Obama tapped Volcker for a new Economic Recovery Advisory Board charged with injecting fresh, outside ideas into policy debates...

...Volcker “is not in the White House and he doesn’t have a bureaucracy to command,” Silber said. “It puts him at a disadvantage.”

After testifying at a congressional hearing yesterday, Volcker declined to respond to questions. His office said he doesn’t grant interviews.
Summers, in an interview, played down any conflict...

...People outside Washington who have talked with Volcker said the former Fed chairman still expresses dissatisfaction. Summers’s resistance has made Volcker more determined to get the panel up and running, they said...

...During last year’s campaign, Volcker was an early backer of Obama and provided economic credibility for the first-term Illinois senator at a time when his primary rival, New York Senator Hillary Clinton, boasted a team of economic advisers that included Greenspan and former Treasury Secretary Robert Rubin. Volcker advised Obama on a March speech in New York that outlined proposals to overhaul U.S. financial regulatory structures...

[sunskyfan]

Re: 'Bad Bank' proposals: will this really happen?

It is certainly possible that the Obama team is comprimised but it is more likely that there is no fix and the Obama team is comming to terms. The "toxic assets" term is just a euphemism for the thread no one dare pulls or it all comes down.