When you say "overheated critics" I assume you're talking about Paul Krugman primarily.

To that I'd answer:

a) No offense, but Paul has a lot more experience here.

b) If Paul is right and you are wrong, then Paul has a lot of reason to be "overheated" here. If you and the Treasury are wrong, we're in for a world of unnecessary hurt here and "shouting" to try to stem it off was justified.

Besides, even if I like Obama on balance, he can take the heat. It'll keep him honest.

Just say it, you think he's "shrill" (which to note, a lot of people said he was being when he criticized the war in Iraq)...

Weren't they making web videos? can I wait for the movie instead of reading it?

I am bemused by the sentence: "Even in areas of the country where home prices have declined precipitously, the collateral behind mortgage-related assets still retains substantial value."

Surely the houses retain value only if no-one wants to sell them. Effectively, every mortgage payment adds value to the assets because it decreases the amount of liability by reducing the cpaital owed.

That being the case, the smartest way to ensure at least the return of the original capital to investors is to renogitiate the terms of the mortgages to increase the amount of capital vs. interest paid.

Alternatively, since property will increase over a 25-30 years term, reset the mortgages to interest-only loans (which maintains the payments that securitized mortgage bonds were supposed to generate), at a rate that the borrow CAN afford NOW, allowing borrower to switch back to a conventional repayment structure when they are able to. Thus, the bonds continue to pay investors and banks (requiring less government bailout), CDS liabilities are reduced to manageable terms (requiring less government bailout) and as the amount of properites being repossed declines and the housing market improves much more rapidly (improving the balance sheets of those banks stuck with currently toxic assets).

Either we engineer a stabilization & recovery or stumble further into the dark, hoping it will get better, trusting that the smoke & mirrors of pumping more money into zombie banks improves their image enough to convince investors to start buying and lending again.

Largely, this comes down to confidence that the assets are worth something and that CDS's are not so neccessary.

to turn on your audio recorder...

What do you all think of Robert Reich's accusation that Treasury has not been forthcoming with information about TARP.

http://marketplace.publicradio.org/display/web/2009/02/11/pm_transparency_comm/

Does this report indicate that everything is above the board now?

The bottom line is that no one knows exactly what will happen.

Even Krugman for all his passion is advocating a theory.

It's all about projections and assumptions and if X=Y spanned out over 20 years that Z will happen. We think.

Elizabeth & Obama...they seem like smart people who are taking everything into consideration. Obama especially wants whateevr he does to WORK. It's not going to do him any good to tow the party line....and then get bounced out after one term.

I trust'em.

And 99 percent of finance is psychology.

If people start believing things will get better, then they will start spending, investing, etc....which will by the very act cause things to get better. Won't it?

Isn't the big drop off in investment basically just tied to the idea that people don't believe now is a good time to invest....so therefore they don't which creates a self-fulfilling prohecy.

Reading along...The only Improving Metrics (Good Signs) that the report lists are ALL either under investigation for manipulation or have already been shown to be manipulated and unreliable! Some excellent "good signs" there, oversight committee. Keep up the good work!

Credit Default Swap Spreads under investigation for manipulation:

http://www.nytimes.com/2008/10/20/business/20swaps.html?_r=2&ref=business&oref=slogin

LIBOR (and therefore also the TED Spread) already found to be unreliable and possibly manipulated:

http://online.wsj.com/article/SB120831164167818299.html

Even in areas of the country where home prices have declined precipitously, the collateral behind mortgage-related assets still retains substantial value.

Surely the highest possible current value to consider "reasonable" is what somebody has just payed for a "similar" house in that market. If one wants to increase the sales rate in that market, the price will drop further. Without knowing what the report means, it is all smoke and mirrors.

"If people start believing things will get better, then they will start spending, investing, etc....which will by the very act cause things to get better. Won't it?"

So it's like Tinkerbell's pixie dust?

Guess that's one possibility. Maybe if I knock my heels together and repeat "There's no place like home!" I'll wake up in 1996 and get a chance to correct some of the "mistakes" I apparently made the first time through.

OK, ok, I'm sorry, I don't mean to beat up on you, but I would like to point out one thing: American unemployment is HUGE right now. No matter what the impoverished BELIEVE, they cannot go out and start buying stuff with the huge amounts of money they DON'T HAVE.

The only people whose "beliefs" are really important right now are the people with boatloads of cash. But these people aren't spending.

Just go convince them all (there aren't too many of 'em) to buy a new car every month and a new house every quarter. That'll help a lot.

I'm not talking about the broke (disclaimer: I am in debt myself) buying more.

I'm talking about Bill fracking Gates getting off his ass and SPENDING HIS BILLIONS!

Asking me to buy more won't help because I'm broke. I have no cash. The millionaires that have $150 million just sitting in their offshore accounts? THEY can spend. But they aren't for purely psychological reasons.

The MILLIONAIRES are the ones who have $250 million sitting in a bank and saying, "Now is not a good time to build a factory. I better just wait this one out."

And if we have a tipping point of billionaires and investors ALL thinking, "Better not spend" -- then that very act CREATES the conditions. It's a psychological phenomenom. (I might be wrong. Did 100 billionaires all declare bankrupcty and I didn't read about it?)

It's not like Bill Gates or any other billionaire doesn't have the money. They all do. It's right there. I can see it. It's right there!

But they have all collectively decided not to invest.

They will not buy any new office furniture. They will not hire anyone. They will not invest in any new companies.

I can physically SEE the money sitting in their banks and yet they are all claiming that they "can't" invest right now because the economy is "bad."

That's what I meant when I was talking about the markets being driven by psychology.

For Bill Gates it IS psychological. It's not that the man is broke...it's that the man has made a purely psychological decision to invest his money.

And it's become a self-fulfilling prohecy(sp)