1) Define "troubled"
The Obama administration plans to send legislation to Congress this week granting the government new powers to seize troubled non-bank financial companies whose collapse would threaten the broader economy, according to three sources familiar with the matter.
Treasury Secretary Timothy F. Geithner is expected to argue for the new powers at a hearing on Capitol Hill tomorrow about the furor over bonuses paid to executives at American International Group, which the government has propped up with $170 billion in federal aid. Administration officials have said that the proposed authority would have allowed them to seize AIG last fall and wind down its operations at less cost to taxpayers.
2) Define the "threat" to the "broader economy"
3) Since the auto makers, various other manufacturers of hard goods / high ticket items, insurance companies, energy companies & many other other industries offer financing through their own internal "non-bank financial companies" this will allow the Obamanable Administration to seize the auto industry, among countless other industries.
4) "the proposed authority would have allowed them to seize AIG last fall"
They say this like it is a good thing?
US wants power to seize insurers
US Treasury wants more state control in financial sector
From Germany. That's the most honest headline yet. Takes one to know one I guess.
The government at present has the authority to seize only banks
Foreigners' Double Take On Geithner
The U.S. Treasury's plan, which will see its Troubled Asset Relief Program buy up to $1.0 trillion in toxic assets from banks, is bigger than any other similar stimulus or bailout plan launched by a government in Europe.
Geithner Asks Congress for Broad Power to Seize Firms
Nationalization is the act of taking an industry or assets into the public ownership of a national government or state
Nationalization: It's Not Just for Communists Anymore
Obama: 'Hard at work' on resolution authority plan
"Resolution Authority Plan", huh? Is that what they call it these days?
Right now, we do not have resolution authority for a non-bank institution like AIG that is comparable for banks that get into trouble using the FDIC,"
"In the absence of that capacity, you end up with the situation we've been in, ... an institution that poses systemic risks to the system but a lack of capacity to close it down in an orderly fashion, renegotiate contract, sell off bad assets," he said.
“While I think highly of the ‘Loan Program,’ I believe the ‘Securities Program’ stinks like a ‘pay for play’ program,” Rosner wrote in a note to clients yesterday. “Once the market and public figures out the truth of this program, whether tomorrow or in a few years, I expect it will become a rightful focus of public outrage on a scale not yet seen.”
Larry Summers, Obama's Designated Thinker in a Troubled Economy
Who's his designated looter?
Obama essay seeks global help with recession
President Barack Obama pressed global leaders in a written message Tuesday to take "bold, comprehensive and coordinated" steps against the debilitating recession.Obama calls for world crisis action
Obama set out the U.S. position in advance of next month's meeting of the Group of 20 largest economies in an essay that the White House said was printed in 31 publications worldwide. In it, the president exhorted leaders to join together in reversing the global downturn.
"For the first time in a generation, the global economy is contracting and trade is shrinking," Obama wrote.
He said the U.S. government understands that "the American economy is inextricably linked to the global economy. There is no line between action that restores growth within our borders and action that supports it beyond."
The Group of 20 major economies meets April 2 in London to discuss the global crisis, and there have been indications that the United States is at odds with some countries in Europe that want to focus more on financial regulation than on vast government spending to stimulate their economies.
The Obama essay, however, acknowledged the need for stiffer government controls over financial practices that were a major cause of the momentous global downturn.
"Only coordinated international action can prevent the irresponsible risk-taking that caused this crisis. That is why I am committed to seizing this opportunity to advance comprehensive reforms of our regulatory and supervisory framework," the president said.
And, he wrote, "I also know that we need not choose between a chaotic and unforgiving capitalism and an oppressive government-run economy. That is a false choice that will not serve our people or any people."
He's an exigent MFer, ain't he though...
Obama to address economy in prime-time news conference
Seizing power by any "populist anger" generated means necessary
Bernanke's House testimony on AIG bailout
House Prescription for AIG Outrage Could Have Painful Side Effects for Subsidiaries
Lawmakers bellowed with outrage last week following revelations that AIG was paying millions in bonuses to employees at a rogue division based in suburban Connecticut.
But the restrictions House members prescribed in response -- a 90 percent tax on those bonuses -- could have painful side effects for the subsidiaries of other bailed-out financial companies, including one located just a few miles away from the troubled AIG unit.
Phibro, a commodities trading company located in Westport, Conn., potentially could be hit with the 90 percent tax on bonuses since its parent company, Citigroup, has received $45 billion in bailout money.
Phibro, though, has not actually taken federal rescue funds and is considered a relatively stable and profitable subsidiary of Citigroup.
"This country will be bankrupt"
ON A DAY when President Obama hoped to bask in the glow of an agreement in Congress on the massive economic stimulus bill, he had to contend with yet another high-profile withdrawal from his Cabinet. Sen. Judd Gregg (R-N.H.) withdrew his nomination yesterday to become commerce secretary. He cited the stimulus package, direction of the census and an inability to be "100 percent with the team" as driving his decision to drop out a week after his selection.Third time's the charm, a Chinese Glow Baller got the gig:
March 19 (Bloomberg) -- Gary Locke won endorsement from a Senate panel to become President Barack Obama’s commerce secretary, sending his nomination to the full Senate.
The Senate Commerce, Science and Transportation Committee voted unanimously today to recommend Locke, the former governor of Washington state.
“He understands what is happening on Main Street and he is a man with his finger on the pulse of what direction America must head toward in generations to come,” said committee Chairman Jay Rockefeller, a West Virginia Democrat.
Locke, a Chinese-American, is Obama’s third choice to be commerce secretary after the two previous picks, New Mexico Governor Bill Richardson and New Hampshire Republican Senator Judd Gregg, withdrew.
He said at a confirmation hearing yesterday that he intends to work to reduce the U.S. trade deficit, open new markets and begin “positioning the United States as a world leader in exports.”
Geithner, Bernanke reject new global currency idea
In a congressional hearing on Capitol Hill, U.S. Rep. Michele Bachmann, a Minnesota Republican, asked Geithner: "Would you categorically renounce the United States moving away from the dollar and going to a global currency as suggested this morning by China and also by Russia, Mr Secretary?"
Geithner replied, "I would, yes."
She posed the same question to Bernanke, who said: "I would also."
Ain't Gonna Take No More