Our Changing Globe

Posts Tagged ‘Emanuel’

Rahm Emanuel, who is the White House chief of staff recently said on ABC’s, “This Week” program, that he believes, “we will be able to avoid the temporary nationalization of the nineteen weakest of the big banks”, and added that he didn’t envisage that it would be necessary for the administration to ask for any additional funding, since several banks are already preparing to repay loans that they recently received.

Emanuel’s remarks were reinforced by those of Lawrence Summers, who is National Economic Council director, who said on NBC’s “Meet the Press”, “we won’t have to get more money because there’s the capacity to turn to the private market first for firms needing more capital. The government can also deploy if necessary additional taxpayer cash, which is likely be buttressed over time by lenders that are in the strongest position of paying back U.S. money”.

Financial regulators and The U.S. Treasury are presently clashing with each other as to how to disclose the results of stress tests that are scheduled to be released May 4, because several officials are concerned about the potential damage that could be caused to the weaker institutions if it’s not done correctly.

The intention of the tests, is to clarify which of nineteen companies that include Citigroup Inc., Bank of America Corp., GMAC LLC and MetLife Inc., have enough capital to weather a deeper economic downturn, should it in fact occur, and the Office of the Comptroller of the Currency, and other regulators would prefer that less details about the assessments be publicized, whilst the Treasury would prefer more.

The first of two major dangers that is envisaged, is that if all the banks pass the tests with clean bills of health, then the credibility of the tests themselves will suspect, especially since the economy has worsened since the Treasury announced the tests in February, causing questions to be raised about whether the checks that regulators are presently applying to bank portfolios are exacting enough. The second danger is that if some banks fail the tests, then investors can be expected to punish them, by refusing to invest in them, thereby causing them even greater problems.

The nineteen financial institutions are all expected to get the preliminary results of the tests as early as April 24, and any banks deemed to be weak, and in need of additional capital will be given six months to raise additional funds.

President Barack Obama said at a news conference in Trinidad and Tobago on April 19, that “the tests will show that different banks are in different situations”, and he pledged that no new injections of government money would, “go into a black hole where you aren’t going to see results or some exit strategy so the taxpayers ultimately are relieved of these burdens”.

Read the rest of this entry »

The rolling back of many executive orders that were issued by the Bush administration might well provide Mr. Obama with a speedy way of putting his mark on policy making after he takes office.

John Podesta, who is head of Mr. Obama’s transition team, told “Fox News Sunday”, “There’s a lot the president can do using his executive authority without waiting for congressional action. Mr. Obama is a transformational figure and the support he received among voters in some Republican states and conservative counties gives him a mandate to pursue his agenda aggressively”.

Mr. Obama won the election by a margin of a little over 7% which possibly doesn’t give him a mandate from the voters “to pursue his agenda aggressively” and his power to pass initiatives through both houses is much more limited that might at first appear.

So what changes might and could Mr. Obama make immediately?

He will more than likely use his executive powers to block new drilling leases on environmentally sensitive land in Utah and he will move to allow federal funding for stem-cell research.

There is presently a ban on federal aid to family-planning organizations that counsel women on abortion that he might well reverse and another which will come into being in December that will restrict California from regulating greenhouse-gas emissions from automobiles.

Rahm Emanuel who is the newly designated chief of staff said that the new administration’s first priority would be the implementation of an economic stimulus plan followed by universal health care, increases in education funding, moving the country toward energy independence and the implementation of the widely announced middle-class tax cuts.

Mr. Emanuel, who was speaking on ABC’s “This Week,” declined however to comment directly on whether Mr. Obama would back calls from senior Democratic lawmakers to allow ailing U.S. auto makers to receive money from the $700 billion fund that was recently set up solely to help the financial industry.

Read the rest of this entry »