Day: July 10, 2009

Toxic Asset UpDate

From CNN Money:

The government on Wednesday tapped nine financial firms to manage a scaled-down program aimed at helping the nation’s banks and said it would invest up to $30 billion to get it started.Among those selected to serve as asset managers of the so-called Public-Private Investment Program were BlackRock (BLK, Fortune 500), AllianceBernstein (AB), Oaktree Capital Management, Invesco (IVZ), Angelo, Gordon & Co., Marathon Asset Management, RLJ Western Asset Management, The TCW Group and Wellington Management Company.

Under the program, the government will run auctions between the banks selling assets and investors buying them. The aim is to effectively create a market. The goal is to help cleanse the balance sheets of many of the nation’s largest banks and help get credit flowing again.

The program will start with a government investment of up to $30 billion with the fund managers, who will use the money to buy the toxic securities that have plagued banks for more than a year.

At the time PPIP was first announced, regulators said the program would start with $500 billion of existing assets with the potential to expand to $1 trillion.

But is this the best way to handle the toxic assets?

Barry Grey writing for wsws.org:

The Obama administration is expected to provide more details today of its plan to enable Wall Street banks to offload up to $1 trillion of their bad mortgage loans and other “toxic” assets at public expense.

According to the reports, the plan will have three major components, all of which involve the use of taxpayer money to guarantee large profits for hedge funds, private equity firms and insurance companies who agree to use low-cost government loans to purchase virtually worthless mortgage loans and securities that are weighing down the balance sheets of the banks.

The government will put up as much as 97 percent of the cash to carry out the purchases and agree to absorb 75 percent or more of any losses that might result from the deals. At the same time, the government will expand a Federal Reserve program launched last week to revive the dormant market in asset-backed securities, otherwise known as the “shadow banking system,” to enable the Wall Street billionaires who participate in the scheme to eventually repackage and resell the assets they take off of the hands of the banks at a substantial profit.

As for the banks, the plan will enable them to not only offload their failed investments at public expense, but profit handsomely from a resulting rise in the price of their stock.

Finally, the government will establish a so-called “public-private partnership,” in which the Treasury Department hires a number of investment management firms to buy mortgage-backed and other securities from the banks. The Treasury will match, dollar-for-dollar, money from private investors who participate and will also loan funds to increase the investment funds’ purchasing power.

In all, the plan amounts to a racket in which the federal treasury is placed at the disposal of Wall Street. One question that arises is why the Obama administration chooses not to directly purchase the bad assets from the banks? There are two basic reasons.

All in all, this move sounds like the public is on the hook for the toxic assets and the banks will profit and the people will be left in the dust….yet again.

2009 Anal-Ocity

The field for the “Assie” Award is getting crowded and more difficult to find the most anal statement.

It seems that the GOP and its pundits seem to have cornered the market on anal statements this year.  The health care debate is about to roar into the public’s mind….lots of misinformation and out right lies will be thrown around by both sides.  I read as much as possible daily and try to post on it to help people understand the debate.

But then I also find some really lame ass statements along the way.  This on is from our boy Newt.  In an interview when talking about US health care it was brought to his attention that there were about 46 million uninsured people in the US.  His response was:

Right. And we have — you know, that means you also have 260 million insured.

Like that somehow makes it just fine that there are people who have no insurance.  And then he said:

And the 46 million, by the way, includes illegal aliens.

Once again it sounds like he is saying that it is okay to have people without medical care.

A New Deal In Health Care

The debate carries on….and on…..and on…..and with each passing day the Dems show their cowardly side m0re and more……Drug industry has a deal and now the Hospitals have caved, not an accurate word, to the Admin.

Joe Kishore has written an analysis of the newest deal the Dems have made on wsws.org:

US Vice President Joseph Biden Wednesday announced an agreement with major hospitals to cut a projected $155 billion in future Medicare and Medicaid payments over the next ten years. The announcement is the latest in a series of deals worked out between the Obama administration and major corporate bodies and lobby groups.

The administration’s health care proposals are based on two fundamental premises: 1) The need to reduce health care costs for businesses and the government; and 2) To do this while ensuring the profit interests of all the major business interests involved: drug manufacturers, insurance giants, and hospitals. The inevitable results flowing from these premises will be higher costs and reduced care for ordinary Americans.

Currently, hospitals receive higher payments through Medicare if they treat a higher percentage of low-income patients, if they treat expensive cases, and if they are in an area with higher wages for hospital workers. These hospitals are generally not those that dominate the industry lobbying groups in discussion with the Obama administration.

The Associated Press noted: “Officials of public hospitals say they have concerns such reductions could also squeeze funding for trauma centers and burn units, which receive Medicare and Medicaid money.”

Biden repeated the administration’s claim that as more people become insured under the Obama plan, hospitals will face lower costs for treating the uninsured, and so can receive lower payments from the government. To the extent that this is the case, however, it will be because the costs are shifted from the government and the hospitals to individuals. Under the proposals being considered in Congress, individuals will be required to purchase insurance themselves and could be fined as much as $1,000 if they do not.

In fact, every agreement with different industry groups has come at the expense of health care for the population. For example, the drug industry had secured as part of its deal a commitment from Max Baucus, chairman of the Senate Finance Committee, to oppose a House measure that would reduce payments to the drug industry for Medicare patients previously covered by Medicaid. There are no doubt many other backroom deals that have yet to come to light.

The administration is also indicating that it is willing to reconsider plans for a “public option”—a government-run insurance program that would compete with private insurers as part of the reform proposals. The measure is, not surprisingly, fiercely opposed by the insurance industry.

The ultimate aim is to establish a system in which the vast majority of the population will receive inadequate or no health care, where the majority of the elderly simply can’t receive more expensive treatments because they are expected to die soon anyway. The rich, of course, will continue to be able to afford the best possible care.

Sorry guys but this deal sounds more like the industry is trying to head off any deal on a public option…they are promising savings and any other form of price reduction.

I realize that I am preaching to the chore here, but Americans need to know absolutely everything pertaining to the debate.  It is important that the debate include the people, all the people, not some control group that is suppose to speak for us all.

My interviews of people in my area, shows that overwhelmingly that people do NOT care about the cost…they want adequate health care for them and their families……and I live in a red area that is more neo-con than the neo cons.

The American people want health care and damn the deficit!

A Religious Outreach To Atheists

Before I go any further…..your beliefs are just that..yours and I in NO way want to infringe on what you care to believe.  I found this article intersting and wanted to post it and maybe some small comment to go with it.

Reuters is reporting that:

What happens when you put a Muslim imam, a Christian priest, a rabbi and a Buddhist monk in a room with 10 atheists?Turkish television station Kanal T hopes the answer is a ratings success as it prepares to launch a gameshow where spiritual guides from the four faiths will seek to convert a group of non-believers.

The prize for converts will be a pilgrimage to a holy site of their chosen religion — Mecca for Muslims, the Vatican for Christians, Jerusalem for Jews and Tibet for Buddhists.

But religious authorities in Muslim but secular Turkey are not amused by the twist on the popular reality game show format and the Religious Affairs Directorate is refusing to provide an imam for the show.

The project focuses attention on the issue of religious identity in European Union-candidate Turkey, where rights groups have raised concerns over freedom of religion for non-Muslim minorities.

Some 200 people have so far applied to take part in the show and the 10 contestants will be chosen next month.

A team of theologians will ensure that the atheists are truly non-believers and are not just seeking fame or a free holiday.

Okay, I should have something clever to say at this point….but I cannot stop laughing long enough to do it…sorry.

Disgruntled Clerics Challenge Iranian Leader

We have all seen the protests and violence that has happened in Iran as an aftermath of a questionable election and its results.  Many have said it is the beginning of the end of the Supreme Council and yet others have said that it will survive and continue its confrontational ways.

I found an interesting perspective written by Jason Ditz:

Iranian opposition candidate Mir-Hossein Mousavi has vowed to continue his campaign against the government of President Mahmoud Ahmadinejad, which he has maintained is illegitimate in the wake of last month’s contested elections. Still, it seems the violent demonstrations have subsided, and Iran has returned to relative normalcy.

At least superficially. Privately many members of Iran’s powerful clergy remain dissatisfied with the reaction of Supreme Leader Ayatollah Ali Khamenei, and a growing number are willing to publicly criticize both the vote and Khamenei.

In the end, the resentment and growing opposition in the clergy could prove a serious threat to Khamenei’s grip on power, and may well be a problem for him to deal with long after the contested presidential election is nothing more than a memory.

Still, it remains unclear just how far opposing ayatollahs will be willing to go against Khamenei’s rule. Nevertheless, the Iranian government appears to be facing one of the worst domestic crises of confidence since the 1979 revolution.

I feel that if there ever is going to be a shake up in Iran, that it will have to come from the clerics, as of today, they hold all the power.  But is any of them strong enough to challenge the cleric now in charge?