Views from the Treasury

Many Americans look at the stock market as an indicator of the economy

Really.

That’s what our Treasury Secretary told the House Financial Services panel.

I’m sorry, but just which Americans is he referring to? I look at food prices, transportation costs, foreclosures and unemployment when I gauge indicators of the economy, which is what led me to believe two years ago that we were heading for a depression.

My guess is, the 3% of the Americans who are dependent on the stock market for their billions are the only ones who care about the state of the stock market.

The money from the bailout that has already been allocated, went to nine of the largest banks and 20 small ones. Though the intent was to get them lending again, they were allowed to use the money for other purposes as reported by WBBM radio:

The idea behind the capital injection program is for banks to use the money to rebuild reserves and lend more freely to customers. However, banks do have the leeway to use the money for other things, such as buying other banks, paying dividends to investors or bonuses to executives.

How this instills confidence is beyond me. Did Bank of America use that money to increase its stake in CCB? How much did Citigroup get while it announces it is laying off 52,000 people? That announcement did not instill confidence, at least with this American person. Perhaps it worked for those who look to the stock market as an “indicator of the economy.”

Sheila Blair, Chairman of the FDIC, wants $24 million to help Americans avoid foreclosures, which, as they mount, by doing nothing, the government is “falling behind the curve.”

She has a brain in her head, perhaps she should be Treasury Secretary or maybe head of the Federal Reserve, because Bernanke and former fed chief Greenspan, have been worthless.

Is it possible that the financial brains in this country are ignorant of the fact that layoffs increase foreclosures and businesses failing, which in turn causes less deposits into banks, causes more people to default on loans, and exacerbates the already gloomy situation?

I think they are truly on the wrong track when they want to, as WBBM reports:

search for new ways to boost the availability of auto loans, student loans and credit cards, which have become harder to get due to the credit crisis.

Paulson wants to use some of the bailout money to create a

new loan facility designed to help companies that issue credit cards, make student loans and finance car purchases.

Ok, I see student loans, though why one needs a new facility for that I don’t know, unless some of his friends are out of work.

He doesn’t want to help the auto industry, but will create a new facility to loan money for cars.

Couldn’t you just help out GMAC and Chrysler Credit Corp.? Wouldn’t that make more sense instead of creating a new, expensive bureaucracy?

And credit cards? People aren’t paying them off now, why would you want to encourage people to live even further beyond their means?

Then he says he’s not using the second installment, he’ll let Obama decide how to spend it.

Well thank the Lord there’s hope for us yet. At least this guy who didn’t see this coming years ago, has the brains to know when he’s in over his head and will stop throwing our hard earned money at mismanaged banks so they can have more money to mismanage.

No wonder he went into government. Apparently not being able to recognize a bad investment anymore makes you kind of worthless to Goldman Sachs doesn’t it.

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