EconomicCrisis.US

Citigroup Inc (C.N) Chief Executive Vikram Pandit said he supports an “enhanced” federal consumer protection authority because problems for consumers can affect the entire financial system.

In prepared testimony for delivery to a bailout watchdog panel in Congress on Thursday morning, Pandit said consumer protection should include uniform standards for all market participants and be linked to a safety and soundness regulator.

But Pandit steered clear of an intense debate in Congress over whether a new consumer financial protection regulator should be a stand-alone agency or placed within an existing regulator, such as the Federal Reserve.
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In 2008 and 2009, Washington strove to save the economy. In 2010, Americans will get a clearer picture of how Washington has changed the economy.

Only as the recession recedes will it become fully evident how permanently the state’s role has expanded and whether, as a consequence, a new, hybrid strain of American capitalism is emerging.

One thing is clear: The government is a much bigger force in today’s U.S. economy than it was before the financial crisis. “The frontier between the state and market has shifted,” says Daniel Yergin, whose 1998 book “Commanding Heights” chronicled the ascent of free-market forces starting in the 1980s. “The realm of the state has been enlarged.”
[USA INC]
Previously in USA Inc.
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As the credit crisis ends, a bigger one is just beginning

“The US government has a technology, called a printing press… that allows it to produce as many US dollars as it wishes at essentially no cost.” – Ben Bernanke

The US economy contracted for four consecutive quarters since October 2008, something we have not seen since the Great Depression. A V-shaped recovery is simply not in the cards because the credit crisis has caused deep, systemic damage. Having said that, if the recession ends this year, it certainly won’t be because the global economy is healthy.
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Federal Reserve vice chairman Donald Kohn believes that prices of mortgage-backed securities are likely to fall when the Fed eventually begins selling mortgage-backed securities (MBS) from its portfolio, according to a MarketNews International report by Steven K Beckner last Thursday.

The report continues: “He gave no indication when that might be. But Kohn, echoing earlier comments by New York Federal Reserve Bank President William Dudley, said the Fed may well avoid any losses on its asset holdings, as well as on its liquidity facilities. ‘These programs may be unwound without loss,’ Kohn said, commenting from the audience at a Boston Federal Reserve Bank conference. He said the Fed entered the market ‘when prices were depressed by high premiums’ and so ‘the Fed could finance without risk.’ That in turn will mean they can be ‘unwound without loss.’”
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