Political Power Grab?

" Treasury Secretary Geithner today asked congress for unprecedented power during an unprecedented crisis and it's our top story now -- the bottom of the hour. Tim -- asking lawmakers for authority to take control and run some of America's financial giants. Again for the government control private business before company might collapse. The Treasury Secretary says it's basically an effort to regulate institutions that really could drag down the entire economy in fact the whole world potentially they -- Geithner says it was a lack of regulation and institutional control that got us into this mess in the first place."

" Our regulatory system was not equipped to prevent the buildup of dangerous levels of risk. Compensation practice rewarded short term profits over long term financial stability. Overwhelming the checks and balances in the system. We came into this crisis in the country and this is a tragic thing. We came into this crisis without the authority and the tools. Necessary to contain the damage to the American economy."

" Of course you have to forget for a moment that we changed all the rules over the past decade and a half to get us to this place but that said they have been changed. The authority -- is for which Geithner is now asking includes being able to take over a company's bad loans. And sell the good ones to competitors. The only agency -- that kind of power really is the FDIC the Federal Deposit Insurance Corp. which of course ensures our money in the bank and technically. That's insurance money from the banks but in the end if they ever failed -- BSE got in trouble we the people would pay for that to joining us now have to graft. He's an economist with the international strategy and investment group. Which is macro research institute and for all the fans of institutional investment magazine investor magazine. Jeff is ranked the top analyst in his field. They want a lot of power Republicans see it as a power grab. Geithner sees it as the only way to stop this sort of thing from happening again and purely from a technical standpoint you see it as well I think we."

" Who really need is there are clear roadmap. In which you have to go through and liquidate these businesses so. It's not about ways to their bankruptcy for that well you would think right let me retirement age he still has shareholders and in that you're still talking about 20% still held by shareholders. That the debt holders. Have not been liquidated that's exactly what needs to happen here that is silly and more oversight and oversight with us into this in the in the first with state categorically disagree -- that. You know regulation is not what it's all about her."

" Of course we we changed the rules would lobbyists putting pressure on congress some of them former congressman. Over the past fifteen or more years which got us to displace that said we're here. So now they have to unwind this thing if not giving him. Control which would have to come from the congress and then what you do at this point. If you give if you give him control to really doing here you're allowing the administration to gain control the government then runs private -- and in view of the FBI sees little different in in the way that structure as a separate entity interpret corporation. It's something along those lines. A special unit like the RTC. May regular trade commission regulatory. Resolution trust -- our courtrooms are -- smells something along those lines to liquidate absolutely I think that used to be done. We we need to understand that if your shareholders you take the first kid and and that have to be done with your bond hold you take the second into the capital structure and that's when the -- we've abandoned that have abandoned."

" I -- we haven't -- it for all we've debated it for those. Whom the government has has deemed too. Too big to fail now you mentioned the FDIC that's what insurers are deposits -- used to date for a lesser amount announced for a couple of 100000 dollars so. The way networks is the banks pay insurance to the FDIC. And from the insurance money the FB IC goes in in and takes over banks that. For all intents and purposes fail. The truth is if if they run out of money at the FDIC. The FDIC is really part of the treasury so that they be able to get more money. So what you're saying is something like the FDIC. Which would be protection for business in the way we have protects."

" For banks to exactly and and and go through the orderly liquidation. They have some of these are our timing issues penalty goal overtime issues with some words are -- issues and we can extend the timing and sell those off and then in in. A normal fashion. I think we're in better shape but in giving power of the treasury don't think is -- community is that your sister that's what's going to happen. I think it is I think there's a huge -- just a political power -- I think took the you've got populism right now which is running rampant I think that at school and in congress are playing right office they're making the center of our universities -- is not that there's not something really grossed about taking bonuses under the circumstance there is. We talk mortgage defaults on about the cement. But to but to try to run private companies business from the government is not live. Not the foundation of -- of our system it's not your -- you're going to end up with good people leaving or -- consulted when -- just console for the settlement money in another important consulting sound like such a wonderful time. Good to see you thank you we've."