Wishin’ and Hopin’

Transparency is good, but is there actually something there?

I’ve been quiet lately, absorbing the new administration's proposals and trying to understand what they plan to do. However, like many, I’m flummoxed. What’s been laid lout sounds good in principle, but there are no details. I’m not the only one to notice- the financial markets are reacting negatively. So, what is the proposal?

It appears that the administration is also flummoxed. They are continuing in the footsteps of the previous administration, throwing the “idea du jour” against the wall and hoping that something sticks. That’s likely why the details are absent. They haven't really thought it all out, which should make us all very nervous. Not only is there likely no plan, but there’s probably no “Plan B,” either.

From the latest missal, the current “bank plan” is that all banks will be inspected to determine their viability, including “stress tests” for the major ones. Reading between the lines, it would appear that those that fail will be force-merged into healthy institutions, sort of a preemptive strike, instead of picking up the pieces. That could be a good idea, if it is what the Feds plan. It might save the FDIC money in the long run. But, will it actually work? It’s likely that in today’s financial climate, many (or possibly most) banks won’t pass muster. Putting a “good” bank together with a “bad” one may not be the answer. It certainly hasn’t helped Bank of America’s situation.

I’m waiting to hear something real, that has a likelihood of working. Let’s hope that it comes soon, and isn’t just a wish.