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Treasury’s Herb Allison Needs a Truth Enema

By Larry Doyle on March 5, 2010 at 9:00 AM in Bailouts, Bank Bailouts, Banks, Citigroup, Economy, Sense on Cents (Larry Doyle blog), TARP, U.S. Treasury

According to testimony yesterday from Treasury official Herb Allison, who is currently charged with overseeing the management of the TARP, there are no financial firms now guaranteed as ‘too big to fail.’

What rock did Herb just crawl out from?

The Wall Street Journal addresses Herb’s ridiculous comment in writing, Treasury Official: ‘No Too Big to Fail Guarantee’ for Big Financial Firms:

There is no U.S. government guarantee to protect the largest financial firms, a Treasury Department official said Thursday, as a congressional watchdog criticized the $45 billion in government aid provided to Citigroup Inc.

Herbert Allison, who oversees the Treasury’s $700 billion financial rescue plan, disagreed with members of a congressional oversight panel that some financial firms benefit from the assumption that the government would step in to prevent their failure.

“There is no too big to fail guarantee on the part of the U.S. government,” Mr. Allison said.

How often did we hear similar drivel about Freddie Mac and Fannie Mae?

What happens to people when they get inside the Beltway? Do they instinctively become serial panderers, if not outright liars?

Elizabeth Warren, who chairs the five-member Congressional Oversight Panel, said it was clear that financial markets do assume the guarantee exists, pointing to a recent ratings agency report that specifically noted the government’s role in backing Citigroup.

“The market clearly perceives that there is a too big to fail guarantee,” Ms. Warren said. “That gives Citi an advantage in raising capital. … That is very valuable to Citi.”

Panel members locked horns with Mr. Allison over his reluctance to answer some questions, primarily regarding the health of Citigroup when the government injected capital into the bank in late 2008. Panel member Damon Silvers, pressing Mr. Allison on whether the bank was at risk of failure at the height of the financial crisis, said it was “extraordinary that it is not possible to have a straightforward conversation.”

The fact that America can not get straightforward and honest answers from our government officials plays right into my commentary the other day, Harry Markopolos: “Don’t Trust Your Government”.

Bend over, Herb.

Peggy Sue

You gotta love the likes of Harry Markopolos and Elizabeth Warren because they really are fighting the good fight. It’s a David and Goliath battle but we [the public] are fortunate that we still have these voices representing us.

As far as Allison’s comments? It reminds me of the tobacco industry CEOs shamelessly standing before Congress and insisting cigarettes were not addictive or dangerous.

The cockroaches need to be dragged into the daylight. Thanks for the article, Larry.
creeper

What’s amazing here is not that Allison lied. It’s that you’re surprised he did. You have GOT to understand that truth plays absolutely no part in what comes out of this administration. Spin is everything.
Diana L. C.

I’m trusting very little that comes out of Washington nowadays. I am very sad about it.

I wonder if we should all concentrate on local and state politics and try to raise up some hones politicians. It would take a while, but maybe that would give us time to fumigate the Beltway.
Diana L. C.

I also wanted to say that while the primary and the general election were the events that moved me away from the current Democratic Party, Larry Doyle’s posts are the ones that have done the most to prevent me the most from going the way of Prime Obot and our obot Guest. I sometimes miss the feeling of belonging to a political party, the right to attend a caucus in our closed caucus state, etc., but he always reminds me that the current administration is as in bed with some of the worst, most corrupt crooks of Wall Street.

I never see the two I mentioned above come to deny the things that LD posts and call them Republican lies and tell us we’re stupid for reading them.

Follow the money……..
beachnan

Great information LD. What can we do about it? There should be a bullshit button that we could all press when these people shamelessly lie to us. I appreciate the fact that the Wall Street Journal was willing to call him out on his lies, but unfortunately, I’m not sure how many regular Joes and Josies read that paper. Not until msm starts proclaiming from the rooftops that these people are lying do we stand a chance of changing Washington.
helenk

http://blogs.alternet.org/speakeasy/2010/03/05/why-are-we-afraid-to-create-the-jobs-we-need/

what Wahington should be concentrating on. If they spent 1/4 the time trying to create jobs as they do creating lies just think how many jobs could be created.

WOMEN WITH INTELLIGENCE AND EXPERIENCE,MEN WHO SUPPORT THEM AND COUNTRY BEFORE PARTY ALWAYS

PUMAS,BUBBAS,EQUALISTS AND THOSE PEOPLE RULE
Always Learning

Thank goodness for Elizabeth Warren.
helenk

is godman sachs getting ready to screw Japan? They are now saying Japan is the next country to go bust.
I saw a bloomberg video at John Smart’s place with Jim Oneil of gs predicting this.

WOMEN WITH INTELLIGENCE AND EXPERIENCE,MEN WHO SUPPORT THEM AND COUNTRY BEFORE PARTY ALWAYS

PUMAS,BUBBAS,EQUALISTS AND THOSE PEOPLE RULE
Guest

His GDP forecast for Japan was a 2009 decline of 6.1 percent, and they did have four straight quarters of contraction but were back in (unexpectedly) positive territory by the 1st Q of this year with a growth rate of 4.6%. Driven largely by Chinese demand for exports.

So it appears the global economy is getting closer to a self-sustaining recovery — one that will not need additional fiscal stimulus to sustain the expansion and the bias is tipped away from a possible double-dip recession.