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Wednesday, February 25, 2009

Obama tries to soothe the collective concern

Is it just me or is he a little overly ambitious?  I don’t mean to stick pins in the guy.  He’s got a nightmare of a job and I’m grateful to have an intelligent man at the helm of this careening ride we call America.  I’m having some trouble with the breadth of his promises.  He’s going to cut the deficit in half?  We’re going to fix the banks? We’re going to cure cancer?  I love the confidence… I wish I had it.  I guess that’s why he’s the president and I’m writing a blog in my sweatpants.  I’m a bit skeptical that he’s going to be able to accomplish as much as his ambition suggests, but if he gets even a fraction of his plans accomplished we’ll be better off.

Holding Wall Street accountable for the nation’s woes and exonerating the imprudent speculation in the housing market is probably inaccurate.  It was a mutually beneficial deception at the time.  I’m not trying to play the blame game.  I don’t frankly care who got us into this mess.  I do, however, want the people trying to fix the problem motivated to do so.  If I worked at a bank and I heard Obama talking about what a scumbag I am and how I shouldn’t be paid a red cent, I suspect I wouldn’t be trying all that hard.  Ironically, quite a few of the unemployed who can’t pay their mortgages worked for those banks just a few short weeks ago.  Many that still hold jobs at these financial institutions are extremely concerned they’re next.  Compensation is down significantly at banks and much of it is in equity, which is being significantly diluted through these capital injections.  We’re all paying for the excess.  It’s unproductive of the administration to have policies that suggest that we trust these institutions to extricate us from these financial debacles and then to throw stones and hurl epitaphs at them.  Inspiring despair among the rescue workers is not going to achieve the desired result.

Though the market rallied sharply yesterday, this will remain a challenging week… month…. year.  Citigroup still requires a bailout package.  The stress tests are due to begin today, I believe.  AIG is apparently set to report a 60 billion dollar loss on Monday and will file for bankruptcy if they don’t get a new lifeline, according to press reports.  The automobile companies need another ~15 billion or they’re going under.  Share prices of reits are showing significant distress.  Many, many issues still to sort through.

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