Banks Scramble to Comply with Obama Reich

Like the banks scrambled to comply with Obama’s ACORN requirements, and moonbattey government requirements to write bad loans on bad collateral to bad credit risks, today they scramble to comply with new Obama dictates.

If they don’t comply in the correct spirit, Obama has demonstrated he will clean house, and name the executives he wants – probably from the Obama Youth Corps (which of these promising young men will become the instant bank executive, because of Obama?)

The Obama Reich is riding roughshod over every free market enterprise it can browbeat or bully. Obamasites think affordable mortgages were a smashing economic success. (Yes; the economy did indeed get smashed because of affordable mortgages). Manipulation of banks to write subprime, affordable, nothing-down, no-credit check mortgages was only phase 1. Things can get a lot worse.

 

Days Could Be Numbered For BofA, Citi CEOs

NEW YORK — The chief executives of Bank of America Corp and Citigroup Inc may be shown the door if the U.S. government decides the $90 billion of capital it has already injected isn’t enough to restore the banks’ health.

Kenneth Lewis and Vikram Pandit face renewed pressure after The Wall Street Journal said the banks may need to raise more capital based on the government’s “stress tests” of large lenders, citing people familiar with the situation.

Analysts and investors have expected a few large regional banks would need more capital, but the government’s findings suggest the sector’s capital shortfalls are deeper.

They also suggest that Lewis’ and Pandit’s assessment about their banks’ ability to weather a deep recession is wrong, cutting into their credibility as leaders and perhaps giving their boards reason to hunt for replacements.

“I would guess both of them are gone by summer,” said Charles Geisst, the author of “Wall Street: A History” and a finance professor at Manhattan College. “They’re caught between a rock and a hard place. They have to try paint a rosy picture for investors, but on the other hand, maybe what we need in the world is more forthright comments about the state of affairs at the banks, and they’re not making those.”

Citigroup declined to comment on the stress test, but said it is making progress on streamlining its business.

The bank may raise money without new government capital by augmenting a planned exchange of up to $52.5 billion of preferred stock into common stock, people familiar with but not authorized to speak about the matter said.

Bank of America declined to comment. The bank is holding its annual meeting Wednesday in its Charlotte, North Carolina, hometown, and shareholders are to vote whether Lewis should stay on the board, or at least give up his job as chairman.

Much of the opposition to Lewis’ reelection focuses on the bank’s troubled purchase of Merrill Lynch & Co. On Tuesday, the California Public Employees’ Retirement System (CalPERS), the largest U.S. pension fund, said it opposes Lewis’ reelection as a director.

Story continues here

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One Response

  1. Things can get a lot worse.

    Obama has set in motion the pieces to ensure double digit inflation and interest rates for 2010. Fortunately, there is an election that fall.

    Conservatives need to be making the case that the inevitable inflation is Obama’s tax increase on the middle class. It will be HUGE and will impact middle and lower classes.

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