Now I'll go ahead and read this!

OMG! I guess those who feared Geithner was one of the Banker Boyz, just without the big paycheck, may have been right. Or this WSJ piece is out to undermine both him and Bair. And where's Obama on this? Right in line with the banksters so far....

WTF??? Sheila Bair has been one of the bright lights in the regulatory structure--and if this is true--well, OMG!

Please, please, please, please, please--let my skepticism be misplaced, let Obama be progressive and liberal and, yes, I will be so delighted! Hope! Change! Hope, hope, hope!

(I just didn't realize the change we had to hope for was a change in Obama!)

Lambert, what a horrible way to start the blog day. Now I'm going out to beat, squash, lash, and mash those leaves. Take out my frustrations.

whether Obama will also marshal his online pod-people to "persuade" others of the infinite wisdom, nay, sheer brilliance of this policy. What say you Kos, WKJM?? Hey, you'll get to gang up on another woman! What could be more fun for "progressives" than that?

Transcript of the keynote address she _just_ gave at American Banker's 2008 Banker of the Year Awards dinner Dec. 4 in New York.

http://www.americanbanker.com/article.ht...

As you all know, it's now official: the U.S. has been in recession for the past twelve months. While most of us suspected this was the case, the announcement formalized for the nation the daunting challenge of how to emerge from what could become the longest recession in post-World War history.

So, how did we get here?

Clearly the two biggest factors are the boom and bust in housing and a dramatic loss of confidence in the financial system. It turns out that securitization — the process that transformed the credit markets — is related to both of these. While securitization has created market efficiencies and broadened and deepened the credit channels, the current crisis exposes a few of its weaknesses.

Chief among these is misaligned incentives. Mortgage brokers, originators, underwriters, ratings agencies and investors all got paid in ways that created incentives for maximizing their own short-term profits, while allowing the accumulation of huge, undetected long-term risks.

Originators and underwriters usually did not retain a financial stake in the long-term performance of their loans. They got paid on day one, when the loan closed or the security was issued.

Securitization drove the boom in housing. Issuance of private residential mortgage-backed securities totaled over one trillion dollars in 2005 and 2006. But as of the third quarter of this year it had declined to virtually zero. Investors have lost faith in many of the market practices that securitization was built on.

Securitization will eventually come back. But fundamental reforms will be necessary to ensure that the incentives are aligned to produce transparency, stability and confidence by all market participants.

Okay, I don't agree with everything, but I can read her words without grinding my teeth at the lies. And her move to insure deposits of $250,000 (it was $100,000) may have stopped a run on the banks and her immediate move to renegotiate mortgages to stop foreclosures showed someone with some power was listening to us little folks.

For Pres-elect Obama to boot her would be a serious political error as right now, this Republican moderate bureaucrat egghead is talking sense and stansing up to Sec. Paulsen, Sec-designate Geithner, and the rest of the bankers for us.

This is not a good sign. From what I've been able to gather, Bair has been one of the decent enough FDIC chairs, but what sends up the flags, to me, is the incoming administration's reported aggressiveness in dealing with her. Really, when you gleefully holdover Bob Gates, but are seeking to force out Shelia Bair, something's wrong, no? I was hoping for something better from Geithner.

Really, Obama can be a Hoover or FDR, and while I believe he's already missed the bus to be an FDR, he most certainly doesn't have to be a Hoover, either. But, he's got to show a great deal more sense than this. The "Obama's transition spokeswoman Stephanie Cutter had no immediate comment." line is so incredibly telling of his governing style it's not even funny, and it's really rather Hooveresque...

It reminds me of the article I say, today, about the danger of Obama's hands-off approach:

Democrats: Obama needs hands-on economic approach

WASHINGTON – Democrats are growing impatient with President-elect Barack Obama's refusal to inject himself in the major economic crises confronting the country. Obama has sidestepped some policy questions by saying there is only one president at a time. But the dodge is wearing thin. "He's going to have to be more assertive than he's been," House Financial Services Committee Chairman Barney Frank, D-Mass., told consumer advocates Thursday.

Frank, who has been dealing with both the bailout of the financial industry and a proposed rescue of Detroit automakers, said Obama needs to play a more significant role on economic issues.

"At a time of great crisis with mortgage foreclosures and autos, he says we only have one president at a time," Frank said. "I'm afraid that overstates the number of presidents we have. He's got to remedy that situation."

the only one looking out for "just us folks." I read the whole story on this at Bloomberg. Geithner is mad because Bair won't "play ball" and let them give away all the money to the bankers without conditions. Supposedly, Bair held up the Citibank bailout until she got equity stakes for taxpayers and forced Citi to agree to a mortgage bailout plan for its mortgagees modeled after the program Bair has going at IndyMac Bank. Paulson and Geithner are pissed at the girl for insisting on some level of accountability.

You know how us girls are. We just won't get with the program. Does this make anyone else think of Brooksley Born and the boys at Treasury?

I think it is time to let Congress know, nicely if you can, that marginalizing the only person in this mess who gives more than lip service to helping Main Street is a mistake.

This whole thing makes me question the Obama team's commitment to re-regulation.

I'll admit there I felt a whole "she doesn't know her place" feeling when reading about the incoming administration's wish to malign her. It kind of funny that even if they can force her out how they seem to be saying that they'll simply take their ball and go home.

I am always surprised at how much ego is involved in these fights, but it seems more likely to me that the problems Geithner and Paulson have with Bair relate to the distribution of benefits in the bailout. I see Paulson's behavior as an example of disaster capitalism, not an unplanned scramble to save the system. Bair is messing with the plan. Geithner is acting as though he's ok with Paulson's plan, and it's precisely in his opposition to Bair that he most obviously tips his hand. Overall, it's not a good beginning.