of course that will be followed with policies to encourage risky lending (paging Barney Frank)
a collapse
a chorus of "blame Bush"

happened before.

If by "more risky investing" he means "granting (more) loans to people with credit scores of under 950" then, sure, why not?

That would be more "risky" than what they're doing now, ja?

He's right. He knows the solution and doesn't want to do it. All insolvent banks should be nationalized. Period. Citi and BoA, I'm looking at you. Forcefully make them solvent and hold a new IPO. Until then the insolvent banks will do what insolvent banks do. Hoard cash or only invest in the most liquid of investments (i.e. the US treasury bond). When banks stop taking risks completely, the economy doesn't grow. No loans to start small businesses. No new jobs created.

Welcome to the start of America's lost decade.

HuffPo also leads with this gem:

GEITHNER CLAIMS WALL ST HAS CHANGED
"We're Not Gonna Let The System Go Back To The Way It Was"

HAHAHAH!

Don't bother looking for the kool-aid, that gullible moron already drank every drop!

King Something: If by "more risky investing" he means "granting (more) loans to people with credit scores of under 950" then, sure, why not?

That would be more "risky" than what they're doing now, ja?

THIS.

RockIsDead

How many posts have you made in the last 15 days?

Renowned transvestite sexologist: Citi and BoA, I'm looking at you.

Indeed... his comments would make a world of sense had he taken those steps at the beginning of the year. Your lost decade comment? Reminds me of my reinsurance times, when companies sold too much too soon and had to wait and wait and wait in a holding pattern until their books balanced.

Renowned transvestite sexologist: Citi and BoA, I'm looking at you.

By the way, in case you did not see it, an interesting NYTimes piece on Citi:

http://www.nytimes.com/2009/11/01/business/economy/01citi.html
Can Citigroup Carry Its Own Weight?
"OVER the past 80 years, the United States government has engineered not one, not two, not three, but at least four rescues of the institution now known as Citigroup. In previous instances, the bank came back from the crisis and prospered."

And I just saw this:
http://dealbook.blogs.nytimes.com/2009/11/01/cit-to-file-for-bankruptcy-soon
"Three months ago, the CIT Group barely averted what it considered to be a ruinous bankruptcy filing that would likely have put the 101-year-old lender out of business."

King Something: If by "more risky investing" he means "granting (more) loans to people with credit scores of under 950" then, sure, why not?

That would be more "risky" than what they're doing now, ja?

Isn't the Fed paying them interest to NOT do that?

At the moment banks are really afraid to do anything because of what might happen to the funds, causing this recession to be prolonged. Geithner is hoping that banks will take more risks but not go full dumbass like they did last time. There is a middle ground here. BUT, once banks do get over this shock there is nothing preventing them from going all out again, so maybe this new-found caution is a good thing and maybe banks will be responsible and maybe rainbows will start flying out of my ass.

Actual quote FTFA: "The big risk we face now is that banks are going to overcorrect and not take enough risk," he said. "We need them to take a chance again on the American economy. That's going to be important to recovery."

I'm out of work largely because many clients of my former workplace with near spotless credit and/or proven business plans haven't been able to get construction loans. The banks need to stop seeing transactions like these as "risky."

So the only people who can get loans now are those credit unworthy individuals that the government regs force the banks to loan to? You all shouldn't really be so surprised it would end up this way.

Because money creation in our economy is dependent up on debt creation. If the banks aren't willing to loan then the economy will stagnate or get worse. The banks aren't the problem so much as people and business aren't in the mood to take on debt, or can't handle any more debt.

Subby, you have so much cock jammed down your throat, it's starving your brain of oxygen.

FarkIlk01: Because money creation in our economy is dependent up on debt creation. If the banks aren't willing to loan then the economy will stagnate or get worse. The banks aren't the problem so much as people and business aren't in the mood to take on debt, or can't handle any more debt.

Its called hitting the debt wall and it sounds exactly like what it is.

Clarence Potter: By the way, in case you did not see it, an interesting NYTimes piece on Citi:

CIT =/= Citi.

SurahAhriman: King Something: If by "more risky investing" he means "granting (more) loans to people with credit scores of under 950" then, sure, why not?

That would be more "risky" than what they're doing now, ja?

Isn't the Fed paying them interest to NOT do that?

That's would be exactly wrong. If they aren't making loans, there are of no use to us and may as well just fail. So the Fed gives them cheap loans in the hopes that they will loan out money in general. Or at least more than they otherwise would.

jvl: SurahAhriman: King Something: If by "more risky investing" he means "granting (more) loans to people with credit scores of under 950" then, sure, why not?

That would be more "risky" than what they're doing now, ja?

Isn't the Fed paying them interest to NOT do that?

That's would be exactly wrong. If they aren't making loans, there are of no use to us and may as well just fail. So the Fed gives them cheap loans in the hopes that they will loan out money in general. Or at least more than they otherwise would.

I was talking about the Fed paying interest on money kept with them above minimum reserves. Do you have any idea what you're talking about?

Lawnchair: Clarence Potter: By the way, in case you did not see it, an interesting NYTimes piece on Citi:

CIT =/= Citi.

No shiat, dickweed.

Anyone who has spent any time in banking knows banks are in a constant struggle between a sales culture and a credit culture. This is just the most dramatic swing from one to the other in recent memory, and perhaps ever.

/was at WaMu when they made the swing
//everyone knew it was coming
///the last place they looked to make cuts was the divisions that brought down the bank

King Something: If by "more risky investing" he means "granting (more) loans to people with credit scores of under 950" then, sure, why not?

That would be more "risky" than what they're doing now, ja?

considering credit scores only go up to 850, I am curious how many people you want to loan money to. (new window)

/ not sure if you are being snarky or not

Clarence Potter: Renowned transvestite sexologist: Citi and BoA, I'm looking at you.

By the way, in case you did not see it, an interesting NYTimes piece on Citi:

http://www.nytimes.com/2009/11/01/business/economy/01citi.html
Can Citigroup Carry Its Own Weight?
"OVER the past 80 years, the United States government has engineered not one, not two, not three, but at least four rescues of the institution now known as Citigroup. In previous instances, the bank came back from the crisis and prospered."

And I just saw this:
http://dealbook.blogs.nytimes.com/2009/11/01/cit-to-file-for-bankruptcy-soon
"Three months ago, the CIT Group barely averted what it considered to be a ruinous bankruptcy filing that would likely have put the 101-year-old lender out of business."

I know you did the whole "no shiat, dickweed" bit above to someone else, but what exactly is your point here? They're two separate companies; there isn't even an implicit analogy in placing your links back to back. If you were meaning to make some other point, you weren't clear.

It's not like there are two standards of lending, "safe" and "risky". US banks were taking a lot risks between '05 and '08, but now the consumer banks at least have swung completely in the opposite direction. A lot of otherwise healthy businesses can't get the money to operate through rough stretches like they would normally, and that's terrible for consumer confidence and job creation. Geithner's not saying that we need to re-create the bubble, but that we need to return to the lending standards of a healthy economy. It's not going to be easy, but it needs to be done at some point.

Lawnchair: Clarence Potter: By the way, in case you did not see it, an interesting NYTimes piece on Citi:

CIT =/= Citi.

They share the first three letters :)