Obama-backed Sheila Bair shakes up Washington, Wall Street

[Thrill]

The Wall Street crowd that packed into the ballroom of the fancy Times Square hotel didn't know what was about to hit it. As the bankers and analysts sliced into their grilled beef tenderloin and chicken, Sheila Bair stepped up to the microphone and told them off.

Too many people couldn't make their mortgage payments, she said. The mortgage industry was sitting on a ticking time bomb and just didn't get it. Pick up the phone, she said, and talk to borrowers.

"The sense of hostility from that audience was overwhelming," said Howard Glaser, a Washington-based mortgage industry consultant who sat at Bair's table that day in October 2007.

"I thought they were literally going to throw their desserts at her."

It would not be the last time the chairman of the Federal Deposit Insurance Corp. got under somebody's skin. Since the banking crisis erupted, Bair has led the call for more government action, creating a rift with former President George W. Bush's treasury secretary, Henry Paulson, and thrusting herself into the limelight.

Bair, who speaks in a soft but rapid-fire monotone, is a constant presence on financial news talk shows and on Capitol Hill. Forbes magazine last year ranked her the second-most powerful woman in the world, behind only German Chancellor Angela Merkel.

Critics say she is on a liberal crusade , but the 54-year-old Republican has won a key ally: President Barack Obama. She's working closely with the new administration on a plan to reshape the financial world by creating a so-called "bad bank" that would mop up hundreds of billions in toxic assets from the balance sheets of U.S. banks.

The bad bank, if adopted, might be run by Bair's agency, the FDIC.

No firm decision has been made, though an announcement could come this week. Meanwhile, Bair is urging Americans to stay calm, even as some of the nation's largest banks teeter. The country, she says, is far better prepared for a financial crisis than it was during the Great Depression.

"We all just need to get a hold of ourselves," she said in an interview. "It's going to be hard. It's going to take time. But we will work through it."

http://news.yahoo.com/s/ap/loaded_for_bair

[Pirate Smile]

1. K & R

[PBS Poll-435]

2. I don't like her

x(

[Thrill]

3. She is the only one who has even tried to help struggling homeowners

[PBS Poll-435]

4. She is an accessory to the attempted theft of Wachovia by Citigroup

x(

[Zynx]

9. I am not going to fault her for one bad call during what has been pretty good management at the FDIC

Wachovia was going to fail pretty quickly. She was trying to find it a home. It's a good thing that Wells Fargo was able to take them in, though as a Wells Fargo shareholder I am less than thrilled.

[PBS Poll-435]

13. Now that just pisses me off

Like WaMu, Wachovia was intended to fail. Wachovia was forced into a really bad deal because of deliberate actions of the Fed and the FDIC. The overnight window was locked and there was no way that Wachovia was getting out alive.

From my OP 10/5/2008 http://journals.democraticunderground.com/PBS%20Poll-435/22

It was clear from documents filed in federal court Sunday that Wachovia was in considerable trouble when it agreed to the deal. Wachovia disclosed that it agreed to the deal "with the understanding that a seizure of its banking assets later that day by the Federal Deposit Insurance Corp. would occur" unless it accepted Citigroup's proposal.
Read more at: http://www.chicagotribune.com/news/nationworld/chi-wachoviaoct06,0,1677807.story

Edited to add link to my OP

[Zynx]

15. That was because it was a hopelessly wounded company.

I really don't believe Wachovia could have been sustained as an independent entity. It gives me no joy in saying this because that merger has cost me money and a lot of people their jobs.

[PBS Poll-435]

16. That really isn't the issue

The fact remains that Wachovia was TOLD to take Citi's deal or they would be declared insolvent and subject to seizure by the FDIC. (Just like the WaMu/JPMorgan Chase deal...)

And......

If she is really "harmless" in these transactions, then it just proves what a piss-poor job she has done at the FDIC.

[Waiting For Everyman]

5. Sheila Bair is far too good to be a Repub.

She modified all of IndyMac's defaulted mortgages, then she created the Streamlined Mod Program for any owned by Fannie or Freddie, and once she gets access to ANY bad mortgage through this "bad bank", we'll see relief.

Three cheers for Sheila! :applause:

I trust her to fix foreclosures more than ANYBODY else. I'm so glad she's still around, and being listened to. If she had her way last October, most bad mortgages would've already been fixed by now.

She's the most competent and effective person on fixing this crisis anywhere so far. If/when the big banks are declared bust, I have no doubt that she'll straighten that mess out too.

Thanks for this article link! :)

[Cha]

6. Somebody needed to..thanks,

Sheila Bair!

[MarjorieG]

7. Kerry, once chair of Finance, usually ahead of the pack 'til they catch up, on MTP tom. with ....

different solution. Wants the banks to take the losses, assign values, not move these falsified assets. Is Bair's plan a bait and switch allowing Banks to survive, maybe succeed, but what happens to value of the assets in bad bank, now and later. Confused about creative accounting...

[Zynx]

10. If the banks take the losses they will have to be bailed out again.

They don't have the capital to survive another round of those sorts of write offs.

[GeorgeGist]

8. If she was sensible ...

she would offer to buy the collateral and renegotiate the mortgages. Let the profit sector eat the toxins.

[Thrill]

11. I believe she is the one who is doing the renegotiation of mortgages

I think thats a big part of her plan. She just hasn't been getting the money to do more of them

[BeyondGeography]

12. We need this kind of strength and independence

She's a keeper.

[PBS Poll-435]

14. No. She isn't

nt