Well, the stock market is quite up from the bottom lately and many economic indicators (employment, manufacturing, consumer sentiment) have turned slightly upward just recently---so there is generally a hopeful feeling about.
And I realize the stimulus strategy is starting to become operative.
However, I remain skeptical that there will be significant improvement unless the fiscal problems that caused this crisis are solved. As New Deal democrat pointed out recently in his diary, Geithner's plan to deal with toxic tax assets is "fiendishly complex."
As New Deal democrat mentioned, a probable reason for this is Obama's unwillingness to expend political capital by doing something unpopular like buying the assets with government cash. I suspect he may be saving this political capital for the big goals he will soon be pursuing, namely health care reform and the carbon cap. However, I think Obama is making a big mistake here, if that is his calculation.
He needs to solve these fiscal problems as quickly as possible at this time. If he does not, I believe the economy will remain stalled, and actually continue to get worse. That will make it more difficult for him to achieve his major objectives.
The article partially quoted below, from the April 1 Wall Street Journal, points out that the Financial Accounting Standards Board (FASB) is about to do something that will make it harder to solve the toxic asset problem--- changing the "mark to market" rule. In addition to interfering with Treasury's initiative on the toxic asset problem, this change will undermine our financial security in the future by making it even easier for banks to not have enough cash on hand--- one of the causes of the current disaster.
In addition, I have to say that Obama has not handled the car company problem well so far, in my opinion. I believe he is just wasted two months and accomplished nothing. From what I have read, the real point of the stalling tactics is to try to pressure the bondholders into reducing GM's debt (they hold $79 billion of bonds, I believe). Meanwhile, we will have to continue to pay tens of billions of dollars every two or three months during this process just to sustain GM. At a time when Obama is trying to expand the government, he needs to be more efficient in solving this highly visible problem.
The article, title as for this post, was on p. C1, I believe, April 1.
http://online.wsj.com/article/SB123854595878676211.html "A new accounting rule set to be approved this week will relax mark-to-market rules for banks sitting on billions of dollars in toxic assets, making it more attractive to keep the assets on their books. Yet those changes may undermine a larger U.S. Treasury plan to rid the banks of those same assets, bankers and accounting experts say.
The Financial Accounting Standards Board is proposing significant changes to its mark-to-market rules, allowing banks to set their own values for certain hard-to-value troubled mortgages, corporate loans and consumer loans. The new proposal, called FAS 157-e, is scheduled for a vote this Thursday.
Once the new accounting rule takes effect, banks will have new incentive to keep the assets directly on their books, say bankers. That is because the rule states that banks can use their own judgment on asset values as long as there are no willing bidders to set a market price
That seems to run counter to the Treasury plan, which could spend up to $1 trillion to remove impaired assets from banks' balance sheets. There is strong Wall Street support for Treasury's program, with some investors advocating a complete cleanup of assets via the Treasury program."