The reason the market is responding poorly is the banks do not want a stress test. They've been lobbying to abandon mark-to-market, so they can continue to avoid telling their customers and shareholders that they are in fact insolvent. They're fear stricken of having their assets valued.

However, this is exactly what needs to be done. Granted I'd be even harsher in my proposals, but we have to remember Geithner et al. are members of this elite club. This is the first step in the right direction: putting a numerical value on these assets so that they can begin to be traded again. If the treasury dept. rates them higher than the market believes they're worth, it'll self-correct, but no one has been willing to take the time or invest the manpower/dollars into finding out what these bundles are really worth. They've all been too scared.

It is going to task rigorous honesty to identify the problem before we can solve it. We need to buy the troubled assets so we can work with the imperiled homeowners to keep their house. Since the fre market is unwilling to address these problems of their own accord, we have to take them from these institutions and manage them ourselves. In the end, I think people will be better able to recover with a house then without one and we will be wealthier as a people if we can do it. Yes we can!

Geithner couldn't tell Congress why AIG was given almost $100B and Citi almost the same while Lehman Brothers and Bear Stearns failed. He's beholden to many of the Wall Street old guards and frauds like Robert Rubin. He even asked for a "waiver" to add a lobbyist to his staff. He's clearly not qualified from a moral or economic standpoint to be point man for the banking mess.

There is some basic simplicity as many attempt to complicate the obvious. Geithner is Wall St's guy, Paulson was and knew he had only a limited time and made good on being its toadie. In the end Geithner is attempting to put Humpty Dumpty back together again where they have private profits and public losses. In fancy words we now own the banks but to do not have any ownership control.

There the invisible hand of Adam Smith is hard at work in this merging of parallel universes but Adam Smith is also at work on the trading markets as so many are seeking cover. The reason is a stress test ultimately will show wholesale insolvency in the banks. Removing shareholder control will remove their political power and expose what and where that power resides.

The X factor is main street since rumblings are beginning. The GOP is absolutely deaf to main street under the thumb of Wall Street.

Another IMF economist wrote me today:

"...[W]e need to set up an orderly way to rid ourselves of the wasted assets, however, the insiders who hold these assets do not go off into the night lightly. [/blockquote]

They are fighting this inside and out with Geithner on the inside but with the reporting of the political discourse Obama appears to be looking for timing instead of if...
[blockquote]
[continued]"The issue is that the quantitative models that were used (as opposed to the Madoff Ponzis) benefited the entire energy, finance and banking industries, as you well know. The over value and speculation from risk assessment vehicles that passed from entity to entity enriched the elites at the expense of the consumer. Now, the unwinding could be catastrophic. As the president stated (I am paraphrasing) "we cannot let the bad guys fail at the expense of everybody else." The solution being touted of setting up a bad bank for bad assets and insurance for the rest is compelling. After we rid ourselves or insure the assets, we should see financial valuations legislated for change (as per my explanation in the last email) and we can begin to build on "what is value" and how to measure it on an accounting, financial and human economic basis. The paradigm has shifted.[/blockquote]

In the end as we are discussing what the new paradigm this is emerging is incorporating new social, ecological and economic values to the overall on assets and activities. Of course what Johnson has referred to as the Oligarthy and what I refer to as the corporate plutocracy has been opposed to this new paradigm for eras and yet growing and developing under the surface since the '60's. It is the cultural war that really is an socio-economic war on the conscience.

What you are seeing is the dismantling of this in that it is unsustainable.

1. The venom on here is truly unbecoming. The idea that people who enter public service are someone indelibly bought and paid for is a sick cynicism.

2. But that's OK, because there is so much clarity on this site as to exactly what to do to get us out of the worst and most complex financial crisis in our history. Do you realize how much money you all could be making with that knowledge?

Market drops again because... why? Those guys actually know what's going on? Weren't they off in their valuations by about 50% just a few months ago? Truth is they are guessing. Also if Geithner had announced complete wipe-out of shareholders and nationalization, does anyone think the market would have gone up?

Sooner or later, Obama is going to realize that enabling Wall Street's greed and criminal irresponsibility is running at cross-purpose to creating new jobs.

The more money wasted in trying to prop up insolvent banks, the less money available to create new jobs. The more effort put into trying to revive a morally and monetarily bankrupt system of finance, the more time lost in building a more rational and just system.

For two decades, Wall Street has been at war with working people. Every time workers lost their jobs, Wall Street celebrated and stocks went higher. The same thing is still happening right now, with trillions being poured into the financial system while the 'stimulus bill' was just emasculated and loaded down with more tax cuts. Until that changes, nothing has changed.

It's time for the liberals in the congress to stand up and strongly oppose this President's, not Geithner's, but THIS PRESIDENT'S, bankers-thieves-liars and con-men bailout plan.
This is so clearly a bailout of Wall Street insiders and bankers by one of their own.
HE'S GOING TO GIVE THESE BASTARDS TWO TRILLION DOLLARS TO DO WITH AS THEY PLEASE!
Obama apologists, WAKE UP!
It's become obvious to me that Obama is not what I thought he was.