Saturday, March 07, 2009

Obama: Another $750 Billion Needed for Banks

by Bill McBride on 3/07/2009 03:12:00 PM

The following article from the NY Times is based on an exclusive interview Friday with President Obama: Obama Ponders Outreach to Elements of the Taliban. Here are some excerpts:

Mr. Obama indicated that the end was not in sight when it came to the economic crisis and suggested that he expected it could take another $750 billion to address the problem of weak and failing financial institutions beyond the $700 billion already approved.

The budget plan he released last month included a placeholder estimate of $250 billion for additional bank bailouts — an amount that represents the projected long-term cost to taxpayers of a $750 billion infusion into the financial sector — and in the interview Mr. Obama indicated that those figures were what he was likely to seek from Congress.

“We have no reason to revise that estimate,” he said.
And on the economy:
Mr. Obama urged Americans to “be prudent” in their personal financial decisions, but not to hunker down so much that it would further slow the recovery.

“What I don’t think people should do is suddenly stuff money in their mattresses and pull back completely from spending,” he said.

Still, he avoided guessing when the situation might begin to turn around. “Our belief and expectation is that we will get all the pillars in place for recovery this year,” he said. “How long it will take before recovery actually translates into stronger job markets and so forth is going to depend on a whole range of factors.”
And on bloggers:
“Part of the reason we don’t spend a lot of time looking at blogs,” he said, “is because if you haven’t looked at it very carefully, then you may be under the impression that somehow there’s a clean answer one way or another — well, you just nationalize all the banks, or you just leave them alone and they’ll be fine.”
My feelings are hurt (just kidding).

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