Summers Chides Banks on Foreclosures, Says Pace of Recovery Is `in Doubt'

[Purveyor]

Source: Bloomberg

By Scott Lanman and Edwin Chen

July 21 (Bloomberg) -- White House National Economic Council Director Lawrence Summers chastised some banks that received government aid for not doing enough to reduce foreclosures, while declaring that next year’s economic growth pace is “in doubt.”

“Prudent financial institutions will recognize that the profits they’re enjoying are in part a reflection of the commitment government and the broader society have made to the financial system that has enabled them to enjoy those profits,” Summers said in an interview with Bloomberg News yesterday in Washington.

While Summers, President Barack Obama’s chief economic adviser, didn’t identify any firms, he said the government will disclose names as part of reports on loans and foreclosures. Last week, Goldman Sachs Group Inc. reported record quarterly earnings, while JPMorgan Chase & Co. said it had second-quarter profit of $2.7 billion.

Separately, Summers, 54, said Obama hadn’t consulted him on the potential reappointment of Federal Reserve Chairman Ben S. Bernanke, 55. “The president will consult with whoever he wishes,” Summers said when asked whether he would recuse himself from conversations about the Fed post, for which he’s regarded by Fed watchers as a potential candidate.

Summers said the U.S. economy is “no longer in freefall,” and poised for recovery starting this year. The former Treasury secretary and Harvard University president cited recent increases in exports, and said fiscal-stimulus and foreclosure- relief programs will create a “gathering force” in the coming months.

Read more: http://www.bloomberg.com/apps/news?pid=20601070&sid=ae2ts7VZVTs8

[Beavker]

1. He had to go on Bloomberg

because CNBC would be stepping on the toes of their biggest Wall Street buddies. They wouldn't have that kind of non-Right wing talk going on. They'll just continue to do what they do best, and placate the big boys on Wall Street.

[DJ13]

2. Go to hell Summers

You should have seized the banks and cleaned up this mess back in February and March when all the significant economists were telling you that was the way to go.

If you had, we would already be a lot further along on the road to a meaningful recovery instead of bouncing around wondering if the bottom could still fall out.

At least your buddies in Goldman Sachs get all that bonus money at our expense, right?

[PurityOfEssence]

3. How DARE you fail! PROSPER, dammit!! Don't just sit there, THRIVE!

This "wisdom of the markets" and the "invisible hand" crap is as ridiculous as a belief in a supreme being, and seemingly just as unshakable. Institutions that revel in not giving a fuck about anybody else are supposed to somehow chip in and be a part of the great joyous community of mankind.

The sheer arrogance of this guy is breathtaking, and the amazing capacity of the truly smart to delude themselves is somewhat amusing as some kind of cynical blood-sport, but lives literally ride on his decisions, and it just isn't funny.

[SoCalDem]

4. bernanke's a doofus.. What did he expect?

Let's say you "sold" a car to someone, and they did not pay you the remaining $5k due, because the blue book said the car was only currently worth $2k.. The govt gives you lots of cash to "compensate" you for the lost money on the car deal, BUT they did not take away the "note", so technically, you still "own" the car, so why let the person who stiffed you on payments keep it, when you could sell it to someone who will repay you, even if you can only sell it for $2k, since the goverment gave you the $5k already, and you still have the car..

[Cass]

5. They should have forced those banks who took bailout money to work with

homeowners to help them avoid foreclosure. This whole bailout TARP thing has been a joke on taxpayers. Without oversight, regulation and conditions on that money it was nothing but a huge free-for-all for the financial industry.