Monday, May 04, 2009

Obama’s Outside Friends

JJ Crammer rightly identifies that Buffett saying ‘American Banks are okay’ is the most precious gift to Geithner as it frees him to continue his ‘soft bank control line’ further. Improving economic indicators, some artificial while other genuine, also help Geithner. Buffett went one step ahead and gave his blessing to Obama Economic policy. For a while, Buffett has been effectively cheer leading Obama Economic Policy from outside. He has been quite liberal in using his market credibility in service of Obama. All that ends well is good, by that logic Buffett is doing the patriotic duty and for now at least it all seems to work.

With Chrysler problem behind, without much burden to Big Labor and in effect quite beneficial to them; Obama is next on to the GM issue which will be solved with a month. Chrysler precedence has almost ensured that it will be solved in similar manners – Labor holding on to their stakes whereas everybody else falling in line. Thus, all in all Auto Industry problems are on way out by some deft handling by Obama White House.

That leaves the banking issue. With improving economy & housing market loosening the vice grip of recession on banks and help from outside friends like Buffett on tap; there is a ray of hope that banks issue will be resolved too. That will be a big victory for Obama and all signs point that slowly and steadily he is on that way.

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