Juggling Dynamite

“With big banks revealing massive 2009 bonuses, Fed chairman Ben Bernanke now supporting a “full review” of AIG's bailout, and Treasury Secretary Tim Geithner due to testify on the same, this is shaping up to be a watershed month in the bailout backlash department: “This whole situation is a mess for Bernanke, it's a mess for the banks ultimately and I'm not sure how we get out of it because the public wants blood,” says Christopher Whalen, managing director at Institutional Risk Analytics, and a longtime and critic of both Bernanke and Geithner.”

See Tech Ticker story with Aaron Task.

This afternoon Obama called for new restrictions on the “size and scope” of financial institutions. In what some are calling “Glass-Steagall Light” Obama proposed a “Volcker rule” that places restrictions on banks' ability to “invest in or sponsor a hedge fund or a private equity fund, or proprietary trading operations unrelated to serving customers.”
“If it’s a fight they want, it’s a fight I am ready to have” he said. Watch the Bloomberg clip here.
Leadership in this area will require a mandate of top down rules; negotiated principles are not likely to secure the changes needed. No more Mr. Nice guy Obama, we need to get this job done.

Tiny Tim and companyThe Democrat oust in Massachusetts yesterday has apparently spurred the Obama administration to serious control proposals for the banks this morning. At last? We shall see. I do want to hope that Obama can find the strength to lead rather than keep following Tiny Tim and company; but until we get the details later today from the President's press conference we will have to remain sceptical. The first year of Obama has taught us to be sceptical. Different facts: but on similar principles, both Obama and Tiger Woods have let their believers down these past few months.
Meanwhile good article this morning in the Huffington Post (Hat tip Ray T.): see Paul Volker Prevails … Let's hope.