The dogs in the street know Washington is going to have to come up with more cash to plug the gaping holes in banks’ balance sheets. Of course, our Orwellian government doesn’t want us to think that major banks such as Citigroup and Bank of America are insolvent.
Instead, we are to believe the “doublethink” that banks are simultaneously profitable and in need of billions of dollars in fresh capital. (Tax dollars, of course. Private investors, for some strange reason, aren’t so keen to invest in these zombies.) And so confident are the Washington bureaucrats in the power of their propaganda that they really expert us to believe that this extra capital is not need because banks are insolvent, but because they need the extra cash to cover future losses.
This pernicious form of reality control will delay any real economic recovery by completely undermining investors’ confidence in the financial sector. Team Obama may think the ends justify the means. But lying to the public will only damage the system as a whole.
3 – ‘Wonder Boy’ Says $2 Trillion More in Stimulus Needed
Bank buying “Boy Wonder” J. Christopher Flowers says the government will need to come up with a stimulus package in the region of $2 trillion “to really get the economy moving again.”
Flowers heads up the J.C. Flowers & Co., the largest U.S. private equity firm focusing on the financial sector. He got his “Boy Wonder” moniker at Goldman Sachs, where at 31 he became the firm’s youngest partner. To say he knows a thing or two about the financial sector is a gross understatement.
Here’s Flowers on the TARP, the economic stimulus program and need for smart regulation of the banking sector (hat tip, Zero Hedge).
In my view, there appears to be insufficient funds allotted for both the Troubled Asset Relief Program and the economic stimulus package. In addition, we need to take strong action and new measures addressing areas including regulatory reform for the financial services sector; government rescues and investments; Basel II international capital standards; US accounting standards; and, of course, the securities and company rating methodologies applied by rating agencies.