Obama-Geithner dither as December housing prices drop thru floor
S&P has released December’s Case-Schiller housing price numbers. Worst monthly decline ever, beating record set … the month before.
See Floyd Norris’s over-all assessment last month.
The dithering of Obama-Geithner this first month in office is indefensible.
Geithner has been there all along. To report (as the Wash Post apologia speaking for his team did last week) that he came into office and was shocked, shocked by the mess he found and had to drop his best ideas and go back to the drawing board …
Ludicrous. Indeed, I don’t believe it.  The Times expose the week before seems the more plausible picture: division and discord between Geithner and his team (all from the Clinton White House) and Obama’s inner circle. Resulting in squat.
And that’s Obama’s fault. For appointing Geithner. The Lincolnesque notion of stocking a cabinet with one’s ideological and even political opponents is not something anyone in today’s Washington can survive. True Ingenue.
Lincoln did not survive it himself, and spent two years dithering, which cost a lot of lives and treasure.
ed says:
As the February unemployment numbers hit the wires (651,000 jobs lost), Paul Krugman complains of Obama-Geithner “dithering” as well.
But he says one problem is that Geithner & co. believe mortgage bonds and the like are worth more than their (non) market value.
I differ in pointing out that both Treasury and the banks believe what Krugman apparently doesn’t believe.
That is (as chatted about here): If the banks didn’t believe, they would have sold mortgage assets in October to Paulson and/or in February to Geithner.
But since the banks DO believe their mortgage bonds are worth more than 20 pennies on the dollar (more like 65, it seems), AND since they’re getting steady welfare injections from Uncle Sam to help keep their nostrils above the water, they have no business reason to sell on the cheap.
Thus I differ with Mr K in having no reason to think both the banks and Tsy are wrong on this point.
Rather, the Market is wrong. Panicked, stupified, stay-at-home. The Market doesn’t work. The Market is broken.
Market Fundamentalists cannot conceive such a thing. Everything they learned as teenagers on TV in the 80s gets in the way. The Market is agar in a petrie dish, the fount and fundament of all. Agar is prior to society itself. Agar cannot be wrong.
And Market Fundamentalists populate the entire Finance sphere. Descending deluded en masse into the maelstrom.
March 7th, 2009 at 1:20 am
ed says:
Obama in a Times interview went out of his way to say he pays no attention to blogs calling for “nationalization” of the banks.
Krugman replies accurately that the prez in using the N word seems not to realize what’s being called for: a process involving seizure aimed at restoring solvent big banks to the private system ASAP.
Krugman’s general reaction: Obama-Geithner twiddle while Rome burns.
Meanwhile, it’s been a month since Geithner’s Feb 10 speech low on sound and fury and signifying nothing. The S&P 500 index since then is down almost 22%.  (870 to 680 as we breathe.)
To gauge this: A 10% drop is generally thought of as a “correction.” We’ve had two in a month.
But Obama seems above such things, and Geithner seems barely able to speak in public. Why was he hired?
March 9th, 2009 at 10:23 am