Aides say Obama is pressing to ease credit again

[NJmaverick]

Source: Associated Press

WASHINGTON – President Barack Obama's economic advisers are talking tough about the banks ahead of his meeting with heads of financial institutions.
Larry Summers and Christina Romer say Obama will press bankers Monday to ease lending to help Americans get back to work.
As Summers put it, bankers need to recognize that "they've got obligations to the country after all that's been done for them."
He says no major bank would be intact without the government's bailout of the financial sector, and now they need to do all they can to get credit flowing again.

Read more: http://news.yahoo.com/s/ap/20091213/ap_on_bi_ge/us_obama_banks;_ylt=AhY1E.Lwn_aerJ3JujX9Kpis0NUE;_ylu=X3oDMTFlbThqbHBsBHBvcwM4NARzZWMDYWNjb3JkaW9uX3BvbGl0aWNzBHNsawNhaWRlc3NheW9iYW0-

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This is exactly what is needed. The banks have got to start lending again, in order to spur the economic recovery.

[bluestateguy]

1. The biggest mistake of the bailout (last year) was not mandating that the banks loosen up lending

Yes that's right, mandate, compel, require, "shall", "so ordered", etc.

You want bailout money? Fine, but you WILL lend, lend, lend.

[davsand]

6. Makes perfect sense, however, even a change in lending standards has created issues.

That bailout cash does need to start flowing, no doubt. The changes made in lending standards, however, have done quite a bit to stall loans too.

I dunno what that answer is, if you want the truth. We are reaping the harvest of a lot of bad paper right now, and I agree that a return to responsible lending was needed. (I just read an article this morning about several local area banks being downgraded, in fact.) People are in such bad shape right now, however, they can't qualify for loans under the new standards. Our local real estate market is stalled--partly due to the season--but also due to the fact that buyers are limited to what they have the cash to buy.

On the commercial lending side of things, I know one local developer that just broke ground on yet another strip mall--while the local vacancy rate for commercial property is climbing by the day (and expected to jump a lot after the first of the year.) I'd hate like hell to be sitting on THAT particular loan or any other one like it--yet the argument can be made that the developer is keeping people working--so he should be encouraged.

Where lies a solution?

:shrug:


Laura

edited for typo

[optimator]

2. all talk

as usual.

[NJmaverick]

5. proof?

[TheWraith]

3. Recced back to zero, to fight the negativity brigade. nt

[NJmaverick]

4. I noticed that apparantly many so called liberals don't like the idea of easing the credit crunch

[bertman]

7. Well, it's about fucking time, doncha think? They've given the Banksters a year to turn

things around via "free market" solutions (LOL) and we see how well that's working out.

Why is it that requiring the Banksters to help the "little people" is always the LAST idea that pops into their minds?

[NJmaverick]

8. Yeah it is time

did you believe all the problems could be fixed on day one?

[bertman]

11. No, but I did believe then and still do, that had fewer dollars gone to the banks and Wall Street

and more gone into stimulating the economy, we would be better off now than we are. There were many top-of-the-line economists who said the same thing, but they were not selected to run the President's recovery plan, were they? Having Rubin's proteges and collaborators from Wall Street and the financial sector set up the loan arrangements in the first place was criminal. Those guys are multi-millionaires because they helped orchestrate this disaster. Their interest was in protecting the fortunes of the Wall Street/Bankster gangs. Giving relief to Main Street was so far down on President Obama's list that he's still trying to get around to it.

[Iowa]

13. You slam-dunked the guy your were responding to. +1 from Iowa.

[AllentownJake]

9. Good luck with that boys

Take off the velvet gloves with the fuckers and pick up some brass knuckles. Don't make Hoover's mistake.

[Waiting For Everyman]

10. My gosh, I believe he means it.

I'll find out soon enough - I'm working right now on resubmitting for a HAMP mod tomorrow. Strangely enough, I have a good feeling about getting it approved this time.

From what I've read in the recent guildeline updates, and several articles with statements on this same track in the last few days, I sense a sea-change coming. Hope it's real.

[Bluesbreaker]

12. why would the banks starting lending?

Unlike any other business, banks and insurance companies are the only companies that do business with the wealth of others. Banks are also the only business granted a list of special privileges and responsibilities. This was done to encourage banks to take the savings of others and lend it out to American businesses and individuals, with the goal of helping grow new ideas and businesses that serve the current and future needs of society and, in the process, create jobs that help fulfill those needs.

But our banks haven't been serving the interests of the broader economy for quite some time. Instead of being incentivized by the government to lend money to all the innovators, investors and workers in this country, our banks are either hoarding cash, playing the spread between low interest government loans and higher yields or just flat-out gambling through the giant and ongoing insurance fraud that is the derivatives market.

Nothing in the recently passed House "financial reform" bill will change this. Do we really think the banksters are going to change their ways, just because their buddy Larry Summers and the president ask them?