Raising yet again the wisdom of paying back the TARP money in order to get around the pay restrictions. Paulson started a poor process that lacked transparency or fairness and it doesn't appear to be radically improving under Geithner either. Clearly the launch of the program didn't help though asking for progress and more transparency sounds like a fair request. The "new" toxic assets?
With that on the back burner, the big threat to the economy is now believed to be troubled credit card, commercial real estate and commercial industrial debt.The entire banking world has been built on cheap and flimsy credit plus gambles based on that credit. Without more high risk gambles it's highly unlikely they can see a return to the profits they had come to expect along with the pay that they have come to expect.
These bad loans, made worse by the severity of the recession, could be responsible for two-thirds of banks' losses.
"The commercial real estate time bomb is ticking," Rep. Carolyn Maloney, D-N.Y., said Thursday at a congressional hearing.
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