Now That We're All Friends Again...

You simply can't make it this stuff up...

After spending the first two months convincing Wall Street, the banking industry, insurance companies and the financial services sector as a whole that he is their implacable foe and mortal enemy, President Obama and his Administration was shocked - shocked I tell you - that Wall Street, the banking industry, insurance companies and the financial services sector as a whole might be less than completely inclined to help the same President Obama and his Administration implement Secretary Geithner's proposed bank rescue plan.

I know, I know... How could anyone have seen that coming.

Anyway, President Obama seemed to decide that it might be a good idea to call a truce and then meet with 15 of the most powerful and prominent bankers in the world to patch things up. The operative word here being seem. Based on the Wall Street Journal article found here, it appears the President's idea of a charm offensive is to be short on charm and long on offensive. The fact that the President arrived late and his guests were offered nothing more than a glass of water were nice touches.

In any event, it seems clear that if the President was looking to build trust and generate a bit of goodwill, he failed completely. Therefore, it would seem obvious the top priority of the 15 bankers who met the President will remain to get out of the TARP program as quickly as possible, regardless of the impact it might have on both Secretary Geithner's bank rescue plan and business lending.

Great job, Mr. President. 

By the way... In a completely unrelated development, Frank Brosens, a prominent Wall Street executive nominated by the Obama Administration to run TARP, suddenly withdrew his name from consideration last week for "personal reasons". Uh huh.

Comments

[richard mcenroe]

But... but... the AP said the bankers vowed to work with the White House. They took a VOW, man!

[elliottg]

So the White House just made Rick Wagoner resign. Somehow I don't think the meeting was about how Obama was so sorry that the bankers feelings were hurt and that pretty please would they cooperate. I think the meeting was more about all the ways Obama could make their life unpleasant in the future if things don't change. In other words, it was a come to Jesus/Obama meeting.

[Dennis The Peasant]

Then Obama better be sure he's Jesus.

Somehow, though, I think he's already convinced himself of that...

[elliottg]

But Dennis can you have it both ways? He's either an arrogant prick with a messiah complex or a weak-kneed ineffective clown who needs to beg people he already pissed off for favors. You're free to enjoy your wallowing, but you have to realize it's putting you into Malkin and Hewitt territory.

[just passin by]

Obama is exactly an arrogant prick with a messiah complex who is a weak-kneed ineffective clown.

He developed as such because he has had everything handed to him his whole life. He's arrogant because he thinks he deserves accolades just for being him, and he is an incompetent clown because he has no real life experience or knowledge.

Let's list some things that Obama has accomplished on his own merit:

[Dennis The Peasant]

Why can't he be an arrogant prick with a messiah complex who is a weak-kneed ineffective clown? Being one doesn't necessarily preclude being the other was well, does it?

[elliottg]

It doesn't. We know that from Bush, but you have stated that his actions are motivated by how he views himself. He can't be both at once in his own mind.

[richard mcenroe]

Gosh, Elliott, tell us again how Bush snuck into the White House while Obama was healing the sick with his touch and signed the stimulus bill behind his back... we all love that story!

[Dennis The Peasant]

elliottg-

I cannot recall ever making such statements. Nor do I find any such statements in my notes.

[PeterUK]

ElliottG ia Amanda Marcotte,I claim my $5.

[elliottg]

Dennis, you wrote:

"The purpose of said confab? Mr. Obama has decided (for this week, at least) that he wants - and needs - all the help he can get from these fish-faced enemies of the people in restoring the banking sector to health. Evidently Tim Geithner can't do it by himself, even with all the help Barney Frank has provided lately."

How could I possibly have misinterpreted that to mean that you thought he thought he needed to play nicey-nice?

[Dennis The Peasant]

I'm not sure "nicey-nice" was the term I was searching for. Anyway, the meeting was the result over concerns by the Obama Administration about banks not putting forth the sort of voluntary effort needed. That doesn't necessarily make Dear Leader weak-kneed. My criticism is that all of the versions of the Geithner Plan that were floated required quite a bit of voluntary cooperation, given that, Mr. Obama's faux-populist attacks on bankers seemed to be working at cross purposes. The meeting last Friday certainly did nothing to remedy said situation.

[richard mcenroe]

But the new Obama policy:"Give me what I want or I'll fire you and bankrupt your company" is SURE to get their willing cooperation...

[elliottg]

Dennis, the Geithner Plan requires cooperation from hedge funds and other players on the buy side. And with no recourse loans for in a 14:1 ratio, you have to be pretty stupid not to want some of that action. They require almost no cooperation from the bankers. One can argue that the bankers can kill the plan by not offering their "legacy" assets for bid, but mark-to-market has been suspended by virtue of noone requiring it; it's still the law so the banks really have no choice because they either offer their assets for bid (or they may be able to be compelled to if they took TARP funds; I'm not sure) or they get it marked-to-market without the excuse that there is no viable market. Then if they don't pass the stress test, they are toast. Krugman's complaint about the whole process is, in his opinion, the banks are toast without having to go through the kabuki of clearing the toxic assets (or alternatively valuing them at market) from their balance sheets so let's just get on with nationalization and stop wasting time.

I think Obama was simply explaining this to the bankers in one syllable words they could understand along with other one syllable words like "tax" and "fraud" and STFU.

[Simon]

Elliottg

My understanding is that the banks haven't and don't need to write down the majority of their bad loans. So as the loans are almost certainly overvalued on their balance sheets they don't have an incentive to sell them.

And by the way the guys who own the hedge funds and the guys who own the banks are the same types of guys with different hats on. If the hedge fund guys see you treating the banks unfairly then they will factor that into their equations when dealing with you.

It's OK to throw out some tough words like 'fraud' (whatever that means in this situation) and 'stfu' but you see now the US government is in bed with the banks to the tune of however the hell much the bailout has cost.

As the old saying goes - if Brazil owes you a million dollars and can't pay then Brazil has a problem. If Brazil owes you a trilion dollars and can't pay then you have a problem.

[elliottg]

Simon, I think you are wrong. The hedge fund guys are perfectly willing to screw their banker friends to the wall. As Michael Corleone would say, "It's business." The government also has nationalization as it's ultimate weapon. Think of it as being able to invade Brazil if they owe you a trillion dollars.

[Simon]

Elliott I like the Brazil analogy - but I don't think nationalisation is going to happen.

I didn't mean that the hedge funders will support the bankers if the government screws them, rather I think the hedge funders will take steps to protect themselves from the same fate. An example of this is the general wariness about dealing with the government after the AIG bonus fracas.