Oxdown Gazette
April 22, 2009

This Wall Street Journal article confirms a milestone of what Krugman, Galbraith, Stiglitz, Prins and many others have been predicting. The TWELVE TRILLION that is being floated to insolvent US banks is essentially being looted in the paper economy. As Hugh has pointed out so often, it is not getting into the real economy and it will not be there when the paltry $787 billion in stimulus runs out in 2010.

For Wall Street Journal subscribers, the article contains a very helpful spread sheet sortable by TARP recipient.

"Bank Lending Keeps Dropping: Analysis of Treasury Data Paints Starker Picture Than Official Government Snapshots"

Lending at the biggest U.S. banks has fallen more sharply than realized, despite government efforts to pump billions of dollars into the financial sector.

According to a Wall Street Journal analysis of Treasury Department data, the biggest recipients of taxpayer aid made or refinanced 23% less in new loans in February, the latest available data, than in October, the month the Treasury kicked off the Troubled Asset Relief Program.

The total dollar amount of new loans declined in three of the four months the government has reported this data. All but three of the 19 largest TARP recipients with comparable data originated fewer loans in February than they did at the time they received federal infusions.


On a related matter, the Milwaukee Journal Sentinel has done a nice piece on Elizabeth Warren’s visit to Milwaukee on April 29.

"Is rescue of banks stabilizing economy? Panel seeks local input on U.S. fiscal efforts"

[…]The panel often criticizes TARP’s lack of transparency. Its chair, Harvard University law professor Elizabeth Warren, complains that the Treasury often blocks requests for information. "It is difficult for Congress and the American public to have confidence in an initiative for which so much money is at stake and so little key information is available," Warren told a congressional committee this month.

The stop in Milwaukee, scheduled at the UWM Student Union and open to the public, will be the panel’s third hearing outside the capital. It previously held public hearings near Las Vegas and Baltimore. Both of those, however, focused on home foreclosure issues.[…]

In my opinion it is critical that Ms. Warren receive a very strong showing of support. Lacking subpoena power, public support is the only leverage she and her panel have.

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