On Nov 12, 2008, at 7:09 PM, Jeffrey Fisher wrote:
> hat does this crew think about this?
>
> http://www.reuters.com/article/topNews/idUSTRE49N5VU20081112
By the way, Goldman Sachs's comments on their former co-chair's speech today:
> Today financial regulatory agencies and Secretary Paulson revealed a
> growing sense of impatience with the extreme reluctance of financial
> institutions to lend. Secretary Paulson's statement was more dramatic
> because he formally abandoned the original main purpose of the TARP
> program to buy troubled mortgage assets. Instead, he outlined his
> intent
> to (1) expand the existing effort to recapitalize financial
> institutions,
> (2) design (possibly with the Fed) a facility to restart
> securitization of
> consumer loans, and (3) figure out ways to mitigate mortgage
> foreclosures.
>
> Meanwhile, taking a carrot-and-stick approach, the regulators urged
> banks
> to restart lending. The carrot is a statement that bank supervision
> will
> become more lenient; the stick is a strong suggestion that restraint
> over
> and above that which is prudent will trigger closer scrutiny of
> dividend
> and compensation practices. Like Paulson's statement, the regulators'
> statement also stresses the importance of averting preventable
> foreclosures.
>
> These statements recognize that the extraordinary measures taken
> thus far,
> while somewhat helpful in reducing market stress, have not reversed a
> severe tightening in credit that is now dragging down the economy. By
> their nature, the statements address only the supply side of the
> credit
> equation; ultimately success also requires consumers and businesses to
> take out loans to increase spending. In the near term, monitoring
> success
> will turn mainly on anecdotal evidence, as the data on outstanding
> bank
> credit are compromised by other factors and the next scheduled
> survey of
> lending officers is three months away.