Must Watch Video, Blogger & Treasury Meet
Very interesting interview! I got the sense that Geithner was there, and he kind of knows it’s all smoke and mirrors …and very concerned about the down side…
Very interesting, indeed, Davos. (Even if it was a “naked link” . . . I won’t tell Jason, if you don’t . . . ) It’s a hat tip to the bloggers that they’ve been invited to the table. The usual order is: if you can’t BS ’em, co-opt ’em . . . So, the very fact that attempts have been made to co-opt says that the blogosphere has been pretty resistant to the usual smoke-and-mirrors games. The bad news is that the next step, after attempts to co-opt, is usually intimidation or discreditation . . . . .
I’d love to get a list of who was invited to this meeting . . . It might be a Who’s Who of bloggers whose posts are rattling the Treasury’s cage, and who have not yet been co-opted.
Wow, excellent video, Davos!
Here’s a recap from another blogger that was invited, Kid Dynamite:
STO began the session with a little background regarding the Administration’s response to the financial crisis. The first point that caught my ear was the description of the stress tests as having been designed to restore a level of confidence in the banking system. The STO mentioned that the focus was now on reducing the footprint of economic intervention cautiously, quickly and prudently. Michael Panzner jumped right in, addressing a concept I’ve writted about previously – that of “extend and pretend,” or “delay and pray” – the concept of attempting to avoid recognizing actual losses and or insolvencies, and growing out of them after enough time. Panzner called it “fake it ’till you make it.” I mentioned that I felt like we were undergoing a “Ponzi scheme of confidence” – but that confidence mattered less than ever in the current environment where, contrary to perhaps the prior 10 years, confidence can no longer be “spent.”
In other words, 5 years ago, the economy could be kept churning along if consumers were convinced that things were going to be ok – they could go and borrow more and spend more. They could take out another mortgage on their home. Today, on the other hand, that credit bubble has popped – we’re broke, both as a consumer, and a nation – and we can no longer simply “spend” confidence by levering up our personal balance sheets any more. I challenged the STO that he had a poor choice of words in describing the stress tests as designed to restore a level of confidence, rather than to determine which banks were healthy and which were insolvent.
Now, the first three points from Geithner’s testimony are the main ones, and they are a good idea – they are pretty much saying that we’d never have bailout like we had the last time, where taxpayers were asked to front the capital that the bondholders (in the form of haircuts and debt for equity swaps) and equity holders (in the form of dilution) should have had to pay for. I think that most of America would agree that these three points are reasonable, and at the very least, a good start. My question for the STO was how these three new ideals jived with the recently announced imminent THIRD round of bailout money for GMAC.
Hope this worked as it wouldn’t take a couple times. Interesting story though!
I will note that the Treasury passed on inviting bloggers with a lot more reach than many of the ones they invited, so I don’t think their aim was to go for “the big numbers”. A few of the bloggers have really low traffic numbers (interfluidity and Kid Dynamites world ahve Alexa rankings well over a million).
Instead, if I were to characterize the list (aside from a few seemingly random invites) it seems to consist of bloggers that take a centrist view of the markets and/or focus on Treasury auctions.
The bloggers that continually observe that the emperor has no clothes were not invited. Which makes sense, they probably cannot be swayed.
An alternative explanation is that a junior staffer was tasked to invite 25 bloggers, spent 30 minutes chasing blog-rolls from one to the next and ended up with a list.
Thanks CM! I agree! I’ve followed most of these bloggers here and there, and agree that almost all are very “centrist” in their thinking and reporting.
What I’m actually confused/disgusted/nothappywith, is that none of the bloggers actually went with a CONCLUSION! I mean really! Being as I had to deal with these persons on a daily basis, I don’t remember a time in which I walked away from a 2 hour meeting not being able to think “THIS was the agenda and THIS is what I take out of the meeting”. I’m guessing that the vetting was more aggressive than is agreed upon.