Tuesday, December 18, 2018

In defense of the Obama family

In Defense of Michelle Obama
It seems highly probably that Michelle Obama's Princeton Senior Thesis was her own work and NOT written by a professional.

In Defense of Former President Obama
Former President Obama had to increase bank assets to unlock the retail credit lock-up.

Two things happened simultaneously:
  • The extent of the non-performing loans threatened the financial industry's liquidity. No liquidity, no loans.
  • Rules were passed forcing banks to increase their loan-loss reserves. Loan-loss reserves are expressed as a percentage of loans
The rules increasing loan-loss reserves played well on Main Street but the practical effect was that banks could not make loans because they did not have enough "quick" assets to meet the new ratio.

Therefore, it was necessary to inject "assets" into the banking industry, otherwise it would be impossible to get a loan until the banks had organically grown their base...a time span that might approach infinity since they were losing vast amounts of money at the time.

While conservatives like to piss-and-moan about Obama's give-away to the financial industry, it was necessary at the time.

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