The U.S. Treasury Department expects to name asset managers for its $700 billion financial rescue plan within days and is working “around the clock” to thaw credit markets, the program’s new chief, Neel Kashkari , announced Monday.They’ve tapped investment consultants Ennis Knupp and lawyers Simpson Thatcher to help out. Reuben Jeffrey, a State Department official, is going to be interim chief investment officer while chief financial officer for the Office of the Comptroller of the Currency, Tom Bloom, will serve as the program’s CFO.The Treasury’s Troubled Asset Relief Program, known as TARP, also has provisions for limiting executive pay packages.Treasury Secretary Henry Paulson (L) and Neel KashkariWhat advice would you give to officials at the Treasury?If you want to read Kashkari’s speech in its entirety, click here
MacroScope
Shining a light on the dismal science
Got advice?
Posted by: Corbett B. Daly
Tags: MacroScope, bailout, chief investment officer, comptroller of the currency, ennis knupp, neel kashkari credit crisis, office of the comptroller of the currency, rescue package, treasury department, wall street
TrackbackPost Your Comment
House Rules:
- We moderate all comments and will publish everything that advances the post directly or with relevant tangential information
- We try not to publish comments that we think are offensive or appear to pass you off as another person, and we will be conservative if comments may be considered libelous information.
23 comments so far
Previous | 2 | 1 | Next
I suggest that the government use some money to EDUCATE the public. The education needed is FINANCIAL LITERACY. The public is so detached with money that they don’t have a clue what to make of this mess anyways, yet understand it. The blame should fall on the public for not standing up and recognizing the problem earlier on and doing something about it. However the public does not seem to know how to rally around a cause to stop financial corruption.
What is done is done. Now we need to LEARN from this fallout. Financial literacy can be taught in the public school system just like they teach other subjects. This would help to teach the public about money and assets.
Letting homeowners keep homes that they can’t afford is not the solution as it rewards their bad decisions. What about all the homeowners that are currently paying for their homes? Do they get their loan interest rates adjusted as well as those who are delinquent? Does the principal balance on their loans get adjusted as well? That’s like having the banks adjust the loan balances for all the car loans as well. WHy not? The cars are worth less than what is owed on them as well. If banks are forced to lower the principal balance of a loan because the asset has depreciated in value, then what is their incentive to lend in the first place? Their would be none.
Anyone that has over extended themselves, deserves to lose their home and be foreclosed on. THis is the process that works and if it destroys banks, then so be it. Banks that modify loans to keep homeowners paying “something” on their loans, are contributing to a problem. That problem is Financial Illiteracy. Why reward a borrower that can’t afford to pay? THis sends the wrong message.
Will banks give an investor (someone that has good financial literacy) a loan that is at a low interest rate, if they fail to make payments? NO!! In fact, the investor would have his credit damaged and it would be impossible to get another loan for a mortgage. SO why give people with bad financial literacy a better deal than someone with good financial literacy?
Investors could buy many properties that are in foreclosure and that would lower the inventory levels of homes on the market. Problem is that the banks will not lend to investors the way that they lend to homeowners. Investors are seen as higher risk. Well, if the rent payments are covering the monthly mortgage, then they are a lower risk. If investors could obtain more loans, then this problem would get better. It would not solve it alone. The only thing that will fix this mess is prices coming down to where people can afford homes again.
Something that needs to be done is for the WHOLE TRUTH to be told about the financial markets. Right now, that is not the case.
- Posted by bobSo far all of the people who did not contribute to this crisis by living within their means, saving and investing have only heard that their taxes are going up and that their savings are going to be eroded by massive inflation. How about rewarding them a little by capping the tax rate on interest income at 15%? That would also create an incentive for more saving, something direly needed and lacking in this country.
- Posted by Bill Morris50% of all “subprime loans” are fixed rate!!!
- Posted by Jim