The Senators ask this morning how to regain the public's confidence in the financial system, and we would like to add, in the government, the Senators themselves.
They don't want to hear the answer, but here it is.
Stop lying. Stop manipulating. Stop deceiving. Stop taking things that are not yours. Stop trying to defraud people. Stop favoring people who give you money and favors. Stop selling things under false pretenses. Stop manipulating the news and the markets as you are doing this morning once again.
The Lehman bankruptcy proceedings seem to be moving forward reasonably well. Let's assess how that is going, and if it is appropriate, let's try it again and see what happens. We'd vote for Goldman Sachs, and then Morgan Stanley.
Start acting transparently, openly, honestly.
Some of you are deeply complicit in this fraud that was perpetrated on the American public and the world. Do the right thing and step aside. Resign. No one will trust you now. Sorry but that is how life works. We are a forgiving people, maybe a little distracted at times, but not completely stupid.
Then we might begin to move forward again, but slowly.
And let's take a minute to feel good about the fact that the Senators office were flooded with calls, emails, and personal visits from their constituents almost universally opposing the Paulson plan. They noticed. Now we must see what they do, and act accordingly in the elections.
But we cannot move forward without a reasonable appreciation of the facts. Here is what a factual outlook on the economy looks like, not the dissembling of Paulson and Bernanke.
Analyst Whitney sees "little hope" from bailout plan
Tue Sep 23, 2008 8:42am EDT
Sept 23 (Reuters) - The credit crisis that began last summer has intensified so much that any U.S. government bailout plan has "little hope" of improving core fundamentals over the near and medium term, said analyst Meredith Whitney, who expects the country's GDP to take a hit from likely moves by state governments to cut costs.
The Oppenheimer & Co analyst cut her outlook on U.S. banks and expects further dividend cuts and capital raises.
Whitney also said home prices were not close to bottoming and expects prices to ultimately be at least 25 percent lower from current levels. She expects homeownership rate to decline further.
The analyst also noted that unemployment was up over 40 percent year-on-year in key states, and said unemployment is "headed materially higher."
Given that over 12 percent of the U.S. GDP is driven by state and local government spending, and with many key states' 2009 budgets being under-funded, governments will be forced to cut costs and this will weigh significantly on GDP, Whitney said.
"Credit market disruption has had underappreciated consequences on the economy... A virtual suction of liquidity has occurred in the credit and lending markets, and consumer and corporate credit is already showing the effects," Whitney wrote in a note to clients.
"Since the onset of the credit crisis, over $2 trillion less liquidity has flown through the U.S. domestic capital markets than during the same time period a year prior," she added.
Q3 OUTLOOK
Analyst Whitney forecast a third-quarter loss of 36 cents a share for Citigroup Inc. She had a prior profit view of 8 cents a share.
Whitney widened her third-quarter loss forecast for Wachovia Corp to 31 cents a share from 15 cents.
She cut third-quarter earnings estimates for Bank of America Corp to 40 cents a share from 75 cents, for JPMorgan Chase & Co to 21 cents a share from 40 cents a share, and for Wells Fargo & Co to 13 cents a share from 17 cents.
Shares of Citigroup closed at $20.01 Monday on the New York Stock Exchange, while those of Bank of America closed at $34.15.
Shares of JPMorgan closed at $40.80, Wachovia's at $18.75 and Wells Fargo's at $35.18. (Reporting by Tenzin Pema in Bangalore; Editing by Jarshad Kakkrakandy)
