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Soros: Banking System "Seriously Underwater"

By Ethan Brown, Section Economy
Posted on Mon Apr 06, 2009 at 10:28:00 PM EST
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George Soros says that not only are banks "seriously underwater" but, more importantly, that toxic assets are "still declining in value."

Worse, Soros argues that the recent change from mark-to-market rules--which gives banks significant judgment in gauging the prices of investments on their books--will "keep the zombie banks alive...and sap the energies of the economy."

A critical mass of highly credible voices--Krugman, Soros, etc--is emerging around the idea that the toxic asset shell game will only prolong the recession and quite possibly turn it into depression. Is anyone in the Obama administration listening?

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    Soros: Banking System "Seriously Underwater" | 29 comments (29 topical)

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    La la la la (5.00 / 5) (#1)
    by lambert on Mon Apr 06, 2009 at 10:40:54 PM EST
    I can't h-e-e-e-a-r you!

    And then (none / 0) (#26)
    by joanneleon on Tue Apr 07, 2009 at 10:03:39 AM EST
    "Oh, just print some more money."

    Parent
    Uh Oh......Three margaritas and Ethan (5.00 / 1) (#2)
    by Militarytracy on Mon Apr 06, 2009 at 10:47:23 PM EST
    continues to encourage factual discussion about this economic crisis. And he's putting Soros up here talking about bank accounting mark-to-market bull$h!t shenanigans creating zombie banks and sucking up every investment dollar any of us will throw at Wall Street for years..........I may swoon but I should probably just go to bed now before I develop a crush.......on Ethan that is.....I've seen George Soros and he's going to have to settle for being rich.

    Will there be a dog named "Ethan" (5.00 / 1) (#5)
    by oculus on Mon Apr 06, 2009 at 11:05:23 PM EST
    next?

    Parent
    Now I am going to bed (5.00 / 2) (#8)
    by Militarytracy on Mon Apr 06, 2009 at 11:24:01 PM EST
    Immediately!!! I let loose with a horse laugh when I read that and Josh's parrot copied me.  I'm going to be making a fly-by on the B vitamins....in hopes of avoiding a headache.  God that tequila is good though.....whew and damn!

    Parent
    who's had the 3 drinks? (none / 0) (#4)
    by nycstray on Mon Apr 06, 2009 at 11:04:14 PM EST
    you or Ethan? I'm confused (though not at 3 drinks yet!)

    Parent
    The media are shutting out the (5.00 / 4) (#3)
    by Anne on Mon Apr 06, 2009 at 10:57:17 PM EST
    voices that are speaking truth to power and the fix seems to be in: even if Obama wanted to listen, I don't think Geithner and the Gang are going to allow it.

    Maybe if it seemed like Obama really understood what was at stake and how it all fits together, there might be half a chance, but I don't think he does.

    Well, I've had my stiff drink, it definitely took the edge off, so now I am taking myself off to bed...'night all.

    You are drinking too this eve? (5.00 / 2) (#7)
    by Militarytracy on Mon Apr 06, 2009 at 11:20:22 PM EST
    Since we're having one together, we can be Anne and Tracy here......don't you think it is Obama's job to have read his aides the riot act on day one that nothing will be kept from him?  I'd have people's heads if info was being "withheld" from me.  If I have to be responsible for something and you work for me as an advisor or aide......OMG don't think for a minute that keeping anything on the field of play from me is an option because it isn't.  If and when I had to deal with something like that fur would fly and heads would roll.  And I'm pretty silly right now...but exactly why doesn't Obama entertain anything said by anyone outside of Geithner and Assoc?  I can't believe for one minute he hasn't heard a different argument from someone......anyone.  The protesters were tearing up the Royal Bank of Scotland, someone must have had something thoughtful and factual outside of Geithner to say to him at the G-20.

    Parent
    I don't (5.00 / 4) (#17)
    by Ga6thDem on Tue Apr 07, 2009 at 05:49:26 AM EST
    think that he's not being told in the way you think. It's just that Geither has only one point of view and that's the view that he's going to promote. Reason Obama's not listening to someone else? Lack of judgement and inexperience.

    Parent
    No. (5.00 / 5) (#6)
    by Susie from Philly on Mon Apr 06, 2009 at 11:17:47 PM EST
    This has been another edition of "Simple Answers to Simple Questions."

    Isn't it sad that it's the big things (5.00 / 1) (#18)
    by masslib on Tue Apr 07, 2009 at 06:30:15 AM EST
    that go so under reported and misunderstood by the American people?  The mark-to-market changes are one of the biggest scams our Congress has pulled on us so far this century.  

    Obama is hip-deep (5.00 / 2) (#20)
    by SeeEmDee on Tue Apr 07, 2009 at 07:04:00 AM EST
    in the "Masters of the Universe"

    He can't get away from them. He's made his Faustian bargain without reading the fine print at the bottom of the contract: the vampires will continue to suck the country dry. That's why Geithner's there, to make sure the status quo continues to feed as the victim bleeds whiter and whiter.

    Credit markets improving, according to (3.50 / 2) (#9)
    by Green26 on Mon Apr 06, 2009 at 11:42:34 PM EST
    NY Times article.

    "...the credit markets, where the financial crisis began, are also showing signs of a spring awakening."

    "Companies with good credit are borrowing more money in the bond markets. Confidence in the banking industry seems to be returning, despite the daily ups and downs of financial shares. Even junk bonds, the high-risk corporate debt instruments, are luring brave souls again."

    "But analysts say the improvements suggest that investors are starting to get some of their old nerve back, mainly because of sweeping federal efforts to get credit flowing again." [What, the federal efforts are working?]

    "The market for securities made from bundles of car loans and student loans -- a vital source of credit -- has started to stabilize. Prices of these investments have risen in the last month, suggesting government-run programs to buy or guarantee this type of debt are gaining traction."

    "Interest rates on a fixed 30-year mortgage fell to 4.61 percent for the week ending March 27, the Mortgage Bankers Association reported, their lowest levels on record."

    The article also cites more positives.

    The commerical paper market improved months ago.

    While some are still negative, or believe only the government intervention is propping things up, there a multiple (early) signs of life.

    http://www.nytimes.com/2009/04/07/business/economy/07credit.html?hp

    Nonsequitor (5.00 / 2) (#11)
    by Big Tent Democrat on Tue Apr 07, 2009 at 12:24:44 AM EST
    to the value of the toxic assets held by the banks.

    Indeed, doesn't your argument mean we do not need the Geithner Plan?

    Or would that, in gyrfalcon's words, spoil the fun?

    Parent

    until (5.00 / 4) (#12)
    by cpinva on Tue Apr 07, 2009 at 02:09:49 AM EST
    the next round of ARM's come due. what, you thought there was only the one? oh, and the small matter of continued rising unemployment.

    who is going to buy all those wonderful cars and houses, exactly? are there "special" lines of credit, for people with no income?

    Parent

    That.. (5.00 / 4) (#14)
    by NYShooter on Tue Apr 07, 2009 at 02:55:49 AM EST
    has been my point all along. The job situation wasn't so hot before the meltdown, unless you call prior engineers working at deli counters "full employment."

    The bankers' & CEOs' breathtaking greed was one thing, their utter stupidity in killing the golden consumer goose was inexplicable.

    Consumers made up three quarters of our economy, so raise their CC rates to 34%, take away their health insurance, send their good jobs overseas.....Brilliant!

    And that's the nirvana Geithner wants to take us back to.

    Parent

    But Green (2.00 / 2) (#10)
    by gyrfalcon on Mon Apr 06, 2009 at 11:49:27 PM EST
    you're spoiling everybody's fun!

    Parent
    I'm just trying to add some balance (2.00 / 1) (#16)
    by Green26 on Tue Apr 07, 2009 at 05:33:01 AM EST
    to the Geithner-Plans-Won't-Work blog site.

    According to a new poll:

    "Americans have grown more optimistic about the economy and the direction of the country since President Barack Obama took office in January, according to the latest New York Times/CBS News poll on Monday."

    "According to the poll, 20 percent of Americans now think the economy is getting better, compared with 7 percent in mid-January."

    "Thirty-four percent said the economy, already contracting, was getting worse, down from 54 percent just before Obama took office."

    What's wrong with these optimistic people? Don't they read Krugman, Black and Soros?

    Parent

    Actually (none / 0) (#19)
    by Big Tent Democrat on Tue Apr 07, 2009 at 06:50:58 AM EST
    You are arguing that we do not need the Geithner Plan to seems to me.

    I hope you are right.

    Parent

    No, I am just pointing out (none / 0) (#24)
    by Green26 on Tue Apr 07, 2009 at 09:43:41 AM EST
    a poll that shows that 15% or so of the people have shifted their views on the economy and recovery in the past 10 weeks.

    I believe the Geithner plan is necessary, and that it is likely to work.

    Eventually, I think this site will be aghast at the huge profits made by the private/US funds.

    Parent

    I was referencing your first comment (none / 0) (#25)
    by Big Tent Democrat on Tue Apr 07, 2009 at 09:46:38 AM EST
    As for THIS comment, what a silly person you are being.

    I would be ecstatic of the Geithner Plan worked - and private entities made huge profits from buying toxic assets. It would make me money as I would have more work as a result.

    Silly.

    Parent

    In addition to silly, I may also be (none / 0) (#27)
    by Green26 on Tue Apr 07, 2009 at 11:08:36 AM EST
    stupid--as I still don't understand what you're saying.

    Parent
    Zombie Banks (none / 0) (#13)
    by squeaky on Tue Apr 07, 2009 at 02:45:26 AM EST
    Someone should do a horror film.

    Tape the cable news (5.00 / 1) (#15)
    by Fabian on Tue Apr 07, 2009 at 05:16:45 AM EST
    and do a music video montage.

    I suggest Red Right Hand. (youtube link)

    Parent

    The mark to market change is (none / 0) (#21)
    by Bornagaindem on Tue Apr 07, 2009 at 07:07:11 AM EST
    what the repugs have been working for for ages- funny how they get it from a "democratic" government.  Doesn't bode well for progressives in this era. But then anyone who was paying attention in the primaries would know this.

    I Think In Soros Case (none / 0) (#22)
    by bob h on Tue Apr 07, 2009 at 08:22:06 AM EST
    he might have a short position in bank stocks.  He has said he is having a very good Depression so far.

    If you can see things clearly (none / 0) (#23)
    by Militarytracy on Tue Apr 07, 2009 at 08:42:49 AM EST
    you can set yourself to make some money.....absolutely.  My husband and I were talking last night and he doesn't understand why I get so upset about all of these TOXIC decisions and type my heart out.  He told me that the majority of those who could care about this and use some leverage are booing in my face and loving it.  They think it's swell being part of the SuperBamer club.  He told me last night, "Baby, why don't just stop worrying about everyone else and make some money off these groupies?"  If I had Soro's money for seed money though......woohoo!

    Parent
    Soros is not necessarily impartial (none / 0) (#28)
    by diogenes on Tue Apr 07, 2009 at 10:26:14 PM EST
    Why do I think that the speculator Soros might be trying to drive the dollar down to make money off it?  Didn't he make a lot of money off a collapse of the pound many years ago?  Please enlighten me.

    Wikipedia says (none / 0) (#29)
    by diogenes on Wed Apr 08, 2009 at 10:25:43 PM EST
    That in 1992 Soros sold the pound short, made a billion pounds, and was "the man who broke the man of England".

    Parent
    Soros: Banking System "Seriously Underwater" | 29 comments (29 topical)

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