Well, let's see what exciting news there is today . . .
Oregon's state economist declares the recession is over! (Feel free to buy that summer home in Maui you've been dreaming about!)
British singing sensation, Susan Boyle sets a pre-order sales record on Amazon. (Just one more sign of the apocalypse!)
Tim Linecum won the Cy Young Award for the 2nd straight year. (Single handedly bringing back the mullet!)
Ireland demands a rematch with France because of the screw-up during their recent World Cup Soccer match. (And still no one in the U.S. cares.)
The University of California Board of Regents are looking at raising tuition by 32% (Message to students: It's not a tumah - it's a tuition.)
And, uh, check out this fabulous headline . . .
In addition to all that interesting stuff, there was a great article in the St. Paul Pioneer Press (say that three times real fast) about some recent remarks Richard Davis made. Many of you may have had this forwarded to you already but just in case you haven't seen it, well, it's below. Definitely worth a read - if only because Richard Davis is so quotable!
St. Paul Pioneer Press
Nov. 18, 2009
Davis has mellowed in his view of TARP
But U.S. Bancorp CEO says Washington feels need to punish banks
By Ann Harrington
When U.S. Bancorp CEO Richard Davis spoke at a business leaders' forum in February, he didn't have much good to say about the government's Troubled Asset Relief Program, which provided the bank with $6.6 billion — but with a lot of strings attached.
Judging by his comments at the monthly luncheon of the Association for Corporate Growth Minnesota on Tuesday, however, his opinion has mellowed somewhat — perhaps because his Minneapolis-based bank is one of the few to have completely extricated itself from TARP. Davis said he believes the program ultimately will be regarded as a decent one with decent returns.
Davis even had positive things to say about the government's stress tests for banks. He got a big laugh when he recalled, "We all went through stress tests. It worked. I was stressed the whole time." (Actually, U.S. Bancorp passed easily.)
But he's wary of what could happen to the financial system from a Washington he characterized as under pressure to punish the banks.
Davis compared the situation to a parent who needs to make a point to a misbehaving teen. It's tempting to take away the keys to the car, he said, but do we really want to chauffeur the child everywhere?
Similarly, he said, if some regulations are enacted, the nation could end up with a financial system in which it is difficult for consumers to get credit cards and businesses to get the loans that are needed to get the economy up and moving again.
Without doubt, he said, there were "some bad actors" in the financial industry, and he apologized "for some of the horrible things that happened." But not all banks are equal, he said.
And bankers aren't the only ones who should share the blame, he said. There also were "billions and billions of dollars" that consumers and businesses borrowed and then didn't pay back. "That's not cool," Davis said.
Moving forward, everyone must deal with all those bad bets, he said. He estimated that between $2 trillion and $3 trillion in assets in the financial system eventually will be written down, "and we're slightly more than halfway there."
Commercial real estate often is seen as a looming problem, but it won't be Armageddon, he said. "Just difficult."
Some banks will fail, and he said the Federal Deposit Insurance Corp. is doing a good job of resolving those situations. But Davis added it could move faster, alluding to "a list we all have" of troubled banks. "Some banks have been on that list for 100 days," he said.
Davis seemed most concerned about the decisions Congress and regulators will make over the next nine weeks, saying he was spending "an inordinate amount of my time in Washington" trying to help decision makers understand the long-term implications of such decisions. He said that one senator (not from Minnesota) told him recently that there was "such a sentiment that we need to punish the banks."
That's where Davis (a father himself) made the comparison with punishing the teenager, and raised the specter of a world where loans and credit become very difficult to get.
Credit is key to moving forward, he said. When asked how we tell when we've turned the page, Davis said he's watching U.S. Bancorp's open lines of credit. Because businesses are moving cautiously right now, only a small percentage of that credit is actually being used. "It's yours to use and you won't use it," he said. When that changes, we'll be making progress, he said.
And one more article about the growth of deposits in the banking industry and how U.S. Bancorp is kicking butt - or, as I like to say: putting more (quality) junk in our trunk!
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