By Michael McKee and Matthew Benjamin

April 17 (Bloomberg) — The Obama administration’s bank- rescue efforts will probably fail because the programs have been designed to help Wall Street rather than create a viable financial system, Nobel Prize-winning economist Joseph Stiglitz said.

“All the ingredients they have so far are weak, and there are several missing ingredients,” Stiglitz said in an interview yesterday. The people who designed the plans are “either in the pocket of the banks or they’re incompetent.”

The Troubled Asset Relief Program, or TARP, isn’t large enough to recapitalize the banking system, and the administration hasn’t been direct in addressing that shortfall, he said. Stiglitz said there are conflicts of interest at the White House because some of Obama’s advisers have close ties to Wall Street.

“We don’t have enough money, they don’t want to go back to Congress, and they don’t want to do it in an open way and

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TheTreasury Department’s new bailout plan would require participation from private investors and would include government guarantees to limit losses. The details remain explained, but skepticism and fears of another crash are running high. For more information, read the following article from Money Morning:

By relying on asset-backed securities, large amounts of leverage and unregulated hedge funds as its key elements, the U.S. Treasury Department’s overhaul of the banking-system bailout plan is essentially relying on some of the same ingredients that caused the financial crisis in the first place.

This time around, someone should take the punch bowl away before the party even gets started. Otherwise, as Yogi Berra once said, it will be “Déjà vu all over again.”

The only difference this time around is that the U.S. Treasury Department is calling the plays.

Backdrop on a bailout

In a press conference Tuesday, U.S. Treasury Secretary Timothy …

By relying on asset-backed securities, large amounts of leverage and unregulated hedge funds as its key elements, the U.S. Treasury Department’s overhaul of the banking-system bailout plan is essentially relying on some of the same ingredients that caused the financial crisis in the first place. This time around, someone should take the punch bowl away before the party even gets started. Otherwise, as Yogi Berra once said, it will be “Déjàvu all over again.” The only difference this time around is that the U.S. Treasury Department is calling the plays. Backdrop on a Bailout In a press conference Tuesday, U.S. Treasury Secretary Timothy F. Geithner unveiled the long-awaited successor to the Bush administration’s Troubled Assets Relief Program (TARP).  The reaction was swift. Stocks plunged after the 11 a.m. press conference began when Secretary Geithner introduced a new rescue plan that was light on ...

Industry PulseHedge Fund Industry Pulse Check(http://HedgeFundBlogger.com) I was on the phone yesterday with a hedge fund investor who said he simply could not keep up with all of the news coming out on hedge funds without spending his whole work day tracking it. He wanted to know what to receive a series of updates within a single post.Here is a collection of quotes on the current state of the hedge fund industry:- Hedge-fund manager David Tepper entered the third quarter with $3.1 billion of U.S. stocks and exited with $648 million, selling most holdings to reduce risk and raise cash as carnage spread across the financial markets. “We moved a lot out early because we didn’t want to lose money,” said Tepper, 51, president of Appaloosa Management LP in Chatham, New Jersey. The firm, which switched some money ...

If the new president looked a little, well, burdened on election night, chances are he’s aging a couple of years in the six-hour span between the release of unemployment figures this morning and his first news conference as president-elect this afternoon.

 

6.5% unemployment in October — worst since early Clintontime.  Worse still were the revisions of the August and September numbers.  And as Karl Denninger noticed, the number of unemployed plus the number of people working part-time who’d like to work full-time now tops 11%.  (And who knows what the real figure would turn out to be once John Williams applies Carter-era standards to the numbers.)

As I write, the president-elect is meeting with his “Transition Economic Advisory Board,” his temporary brain trust as it were.  The names on the panel are, well, interesting.  Some of the faces from I.O.U.S.A. are there.  But one has to wonder if

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