I say NO, they can’t compete with other banks. There are a lot of small banks and mid size banks that are doing just fine. They need to rethink how they do business and show congress a detailed plan of what they will change and how will they use the money before getting any help.

Also I want to see the executives of these Big financial institutions before congress explaining why they need the money and showing there plan of action. CitiGroup does
not need help, it needs to reorganize. Sell some of its assets. These institutions are
too big.

Right now this is not a level playing field and I as a citizen and tax payer do not like what I hear and see on television.

I was on your show this morning, and you asked me to read and comment on your post above. Some comments:

TARP may have had good intentions of putting a floor on certain debt instruments, but the mechanics of the purchase were going to be nearly impossible to execute. Reverse auctions would have set a low price that a nearly-failing institution was willing to take, which would have resulted in another round of mark-to-market writedowns for the institutions that DIDN’T sell at that distressed price. Regardless, markets had assumed Treasury was going to use TARP to purchase RMBS securities, which is why RMBS markets were up, yes up, during September and October while everything else was getting smashed. When Paulson said last week TARP would not purchase securities, RMBS got hit hard, and the BKX index crashed through its July 15 lows.

On CPFF, I have a more optimistic view than you on its eventual outcome. The Fed is purchasing hundreds of billions of top-rated CP so it doesn’t have to do any/much credit analysis. Therefore, banks do not have to use their balance sheets buying that CP or extending back-up lines of credit to those top-rated corporates. Instead, banks can use their balance sheets to lend to smaller companies, at least in theory. Everything is frozen at this juncture, but I would guess this will pan out eventually.

Tomorrow, I’ll address the point I was making this morning about how inaccurate application of bond ratings are destroying capital in the banking system, making the whole credit crisis worse than it should be. Right now, I’m going to go get some sleep!

But I will say- it JUST occurred to me.

If Gasoline costs more to make than you can charge for it ? right now ?

AND ? Gas refineries are handling this the way they always have ? lower output ?

I hate to say it, but THAT does have one dark side.

LESS oil demand, for less gas production.

So, here is gasoline being crimped on production to bump up the price, make less, charge more, and here is oil doing the same – OPEC that is.

so, Gasoline production goes down, so will oil production, but oil will try and cut down production to make oil go up, in turn, gasoline goes back up.

This summer – gas went up as if on a roller coaster so much that consumers now second guess spending on x-mas I think. tight wallets.

I see a terrible cycle of abuse here.

Point is – journalism is journalism.

Hope you or someone explores just how factored in or fair it is to say 11 and 1/2 years low for DJIA.

7000 in 2000 etc, isn’t fair to compare to 7000 today.

I think people would like to get that value in real proportion.

Factoring in the condition of the dollar, say 11.5 years ago.

I’d start there.

SEEMS most people want a thermometer on the market meats – especially this holiday season.

X-mas shopping could ride on the coat tails of a DRY turkey if people let it bake too long (as I do).

I’m not sure what they are baking over at the Treasury ovens.

Let’s just hope they don’t start shovelling money into furnaces to hedge against deflation !

Most US consumers would not able or willing to grasp that.

ALMOST like when we destroy food to anchor stability on futures.

You had someone on recently, I think it was you, stating that gasoline right now costs more to make than you can charge, alas refineries as seeking to cut back.

OPEC is doing this.

I wonder if there will be a backlash from this.

Petro IS the magma underneath the tectonic plates of our global economy.

Something to consider looking into.

When I read THIS ? at MarketWatch headline ?

“Late dive drives Dow down 444 points; S&P is at an 11½-year low”

Why not look into whether inflation and the dollar have been factored into this.

I suspect it’s more than 11.

As I see it, when people were given mortgages they didn’t qualify for because corrupt politicians used and abused the banking system for their own finincial gains and to secure votes, that’s when the problem started. The people who got the homes they didn’t have to work for are the same ones who are unable to pay their credit card bills, too.

For what it’s worth, I just wanted to say that I am a member of the large group of hard-working tax-paying Americans who recognize that it is our tax money — earned by our honest labors — that is going to fund the corruption, the welfare (because that’s exactly what those subprime mortgages were)and the huge social programs that are coming with the next president.

My husband & I are grateful to have grown up in the best of times — the 40’s & 50’s –when this country was the America our founding fathers envisioned, where we still could claim life, liberty & the pursuit of happiness…when more of our money could be used for ourselves and didn’t have to be given to the govenment. Unfortunately, our children & grandchildren will have to adjust to a new and different America where the values they were taught in our home are not prized nor are they respected. Where their dreams may go unfulfilled as more of the fruits of their labors go to the government.

As we now know, the “liquidity” problem requires a personal touch. Unfortunately, I just continue hearing to “keep the financial institutions intact”. There is really no personal touch here.

Eric