Median home-sale prices in March were around $7,000 higher than in February.
But they are still far lower than they were a year ago.

Some banks have started returning bailout money amid reports of better than expected profits in the first quarter of 2009, and the stock market has rebounded since early March.
But, the value of the Dow Jones Industrial Average is still at around 60% of what is was a year ago.

The administration claims that 2,000 new transportation projects have already been approved under the stimulus package.
But the construction sector lost 626,000 jobs between December 2008 and March 2009.

And whilst we’d truly love to believe that the economic crisis has bottomed out, the IMF (International Monetary Fund) estimates that the global economy will contract by 1.3% in 2009 and the U.S. economy by 2.8% which would be the most since 1946.

Related posts:

1. Our Economy – When Even The Ugly Looks Pretty.
2. As Stocks Advanced The Number Of Defaulting Homebuyers Rose By 50%
3. Home Prices Higher In February Than In January

Treasury Secretary Timothy Geithner and his counterparts from the world’s top seven industrialized democracies, acknowledged on Friday April 25, in a joint statement that their economies will need to be jump started in order for the global economy to rebound.

A joint statement read, “We are committed to act together to restore jobs and growth and to prevent a crisis of this magnitude from occurring again, and we will take whatever actions are necessary to bring that about. Recent data suggest that the pace of decline in our economies has slowed, and some signs of stabilization are emerging. Economic activity should begin to recover later this year amid a continued weak outlook and downside risks persist”.

A goal of raising $500 billion for an emergency lending facility was set by G-20 leaders at their London summit on April 2 and Obama has asked Congress to put up $100 billion, and Europe and Japan have pledged equivalent amounts.

Earlier this week the IMF called on world governments to boost stimulus spending, especially on infrastructure projects such as roads and bridges, in order to create jobs, but European nations are loathe to run up huge budget deficits and have so far resisted U.S. pleas to increase their spending.

France’s Lagarde noted, “We are in a bind, if you will. On the one hand we have to inject public money into the economy because we believe this is the strongest and best multiplier. At the same time, in the medium and long term, we need to restore the sustainability of public finance”.

Related posts:

1. Several Banks Are Preparing To Repay Taxpayer Money
2. The Economic News Is Both Good And Bad
3. Ten US Banks Needs A Total Of $75 Billion

The first idea that most likely comes to mind would be an outright takeover of troubled firms such as happened with the mortgage giants Fannie and Freddie Mac when the government put them into conservatorship but many people using the word ‘nationalization’ simply mean that the government would invest large amounts of cash into banks thereby enabling it to have a major say in their activities.

Although the Obama administration is on record as saying that it wants to keep the banking system in private hands it hasn’t completely ruled out taking over troubled firms as can be seen by recent comments made by people that should be familiar with White House thinking.

“We have a financial system that is run by private shareholders, managed by private institutions, and we’d like to do our best to preserve that system”. – Treasury Secretary Tim Geithner

“I don’t welcome that at all, but I could see how it’s possible it may happen. I’m concerned that we may end up having to do that, at least for a short time” – Senate Banking Committee Chairman Chris Dodd, D-Conn.

“The president believes that a privately held banking system regulated by the government is what this country should have”.

That said, his statement left open the question as to whether or not the administration might consider intervention which would involve the taking over of a troubled bank after which it would be broken up and then new investors would be sought after a cash injection had been made.

The idea is one which is somewhat popular and Simon Johnson who was chief economist at the IDF had this to say,

“We have no problem in this country shutting down small banks. In fact, the FDIC is world class at shutting down and managing the handover of deposits, for example, from small banks. Nobody has the political will to do it. So you need to take an FDIC-type process. You scale it up. You say, ‘You haven’t raised the capital privately. The government is taking over your bank. You guys are out of business. Your bonuses are wiped out. Your golden parachutes are gone”.

It is not clear however if what the FDIC succeeded in doing with a few small banks would work with banking giants that employ hundreds of thousands of people and donate millions of dollars to various campaigns.

The bottom line however was probably best expressed by Paola Sapienza who is a finance professor at Northwestern University in Evanston, Ill.

“There seems to be some sort of ideological bias against the government taking over banks but eventually we’re going to pay for this, one way or another!”.

Related posts:

1. The Banks Are Now Indebted to Governments
2. Ten US Banks Needs A Total Of $75 Billion
3. Several Banks Are Preparing To Repay Taxpayer Money

Stiglitz, who is a professor at Columbia University in New York and a former adviser to President Bill Clinton had said that any decision by President Barack Obama to establish a so-called ‘bad bank’ to help rid financial companies of toxic assets risked increasing the national debt and added that the intended plan would leave taxpayers paying for years of excess lending by banks and would also deprive the government of money that could be better spent by propping up Social Security.

“That amounts to swapping taxpayers’ cash for trash and you shouldn’t chase good money after bad. We’re talking about a national debt that’s very hard to manage”, he said.

Angel Gurria who was Mexico’s former finance minister replied that a ‘bad bank’ is necessary if lending is to resume, “I agree about the moral, ethical fallout, but you’ve got to face the music and someone has to take the loss. It’s the only way to jumpstart the economy”.

George Soros said in an interview that “it’s not the measure that would turn the situation around and enable banks to lend”.

John Monks, who is the general secretary of the ‘European Trade Union Confederation’ said, “governments are getting close to straining the patience of the public and voters by repeatedly extending lifelines to banks”.

Gloria Arroyo who is the President of the Philippines urged Obama to act quickly, “We want Americans to do something. We can discuss what to do but the worst thing is to do nothing”.

A report just out from the International Monetary Fund states, “Bank losses worldwide from toxic U.S. originated assets may double to $2.2 trillion”.

Related posts:

1. Commission says tax payers already bilked out of $78 billion!
2. Geithner To Provide More Details On Toxic-Asset Cleanup
3. Timothy Geithner Announces His ‘Wish List’.