Tag: TARPs

A 2011 Prediction

We see daily that the media wants us to believe that the economy is recovering, slow but slowly……but is it really in recovery mode?

A good question that has numerous good answers…..if you were around for Reagan then you should be acquainted with the name Laffer…if not then let me help…Laffer is the father of trickle down economics, where if the wealthy get big tax cuts then the benefits will filter down to all strata of the economy…….bullsh*t!……I am still waiting for it to trickle down to my strata!  Anyway Laffer has some predictions for 2011…..

Arthur Laffer, President Reagan’s favorite economist and creator of the famous Laffer Curve, believes the economy is headed for a “train wreck” in 2011. And he thinks it will be so bad that the current recession look like the good ol’ days by comparison.

Human Events reports the details:

In a wide-ranging discussion about where the economy is headed, and the fiscal, tax and monetary reasons why, Laffer gives a bleak forecast of where President Obama and his administration are taking the country in the next three years — which he predicts will end with Obama’s defeat in 2012.

“Obama is a fine, very impressive person. He really is. Unfortunately, everything that he is doing in economics is exactly wrong. He is a crappy president,” Laffer said.

Personally, I do not put much faith in any of his predictions……but there are days when hell freezes over and today is one of those days…….I will agree with Laffer that it is NOT over…..commercial paper is close to exploding, and the great Satan of the current crisis, derivatives are still being done by the large players in our economy and there seems to be NO taste for financial reform in Washington…all that leads me to think that it can only get worse, but it will give a false sense of confidence first before the sh*t hits the fan….again!

Don’t Look Now But It Is Not Over!

We hear daily conflicting reports on how the economy is doing….first it is good, then after adjustments, not so good….we hear that banks are paying out massive bonuses and still using taxpayer cash…..we hear lots of manure daily, weekly and monthly on the condition of the American economy……investors are thrilled at the news…but the rest of us wait for our turn for attention…

Neil Barofsky of the TARP Fund office sees something a little different than the media:

Neil Barofsky, the special inspector general for the US bank bailout, released his quarterly report to Congress Saturday, saying, “It is hard to see how any of the fundamental problems in the [financial] system have been addressed to date.”

The document claimed that the financial system is more dangerous now than ever before because banks have reason to think the government will step in again when their speculative bets go bad. “Even if TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the same winding mountain road, but this time in a faster car,” Barofsky wrote.

Following the financial meltdown, the biggest banks grew even bigger as they bought up their failed rivals. As Barofsky put it in his report, “To the extent that huge, interconnected, ‘too big to fail’ institutions contributed to the crisis, those institutions are now even larger, in part because of the substantial subsidies provided by TARP and other bailout programs.”

The report emphasized that, despite the trillions of dollars provided by the bailout, the banks have continued to decrease lending. Barofsky stated, “Although there was this public disclosure that the purpose of these programs was to increase lending, very little, if anything, was done to encourage or direct lending.”

The report does not sound too cheery about the future of the economy…….it seems that the same conditions that caused the economic problems are still there and waiting for the next chance to throw a monkey wrench into the machinery of the economy…..no amount of cash thrown at a problem will solve it if the underlying conditions remain…it is NOT rocket science….it is common sense….

Make ‘Em Pay!

For months now I have been a bitch about the taxpayers money being used to give bonuses to the fat cats on Wall Street…..at every turn the banks have gotten a special treatment and it looked like the taxpayer was screwed…..

Today Obama will announce a plan to recover upwards of $120 billion of the money originally given the banks….

Obama’s announcement will come as U.S. unemployment is stuck in double digits and public anger is growing over big bonuses that some financial firms are poised to resume paying, barely a year after the height of the global financial crisis that made the bailout necessary.

The Obama administration official said the amount of money raised from the fees would not exceed $120 billion since this was the higher end of conservative estimates of the cost of the Troubled Asset Relief Program, or TARP.

Sounds like a pretty good idea to me….but as usual there is a downside to the plan…..The source, speaking anonymously because the fee has not officially been proposed, said government officials are also discussing exempting automakers and insurer American International Group from the fee, even though these companies are expected to represent a large chunk of the bailout losses.

There are other ways of “Making Them Pay”……that would be a Goldman-Sachs shareholder that is suing the company……this was posted in “Before Its News”:

the firm is supposed to spend about 50% of its net revenue on salaries and bonuses.  But in 2008 Goldman dished out $4.82 billion in bonuses despite earnings of only $2.32 billion..In the first quarter of 2009, it spent 259% of its net income on employee and executive compensation and in the second quarter 193%. Brown is now Goldman for exceeding its own rules on salaries and bonuses.

I makes me happy to see that at least someone is mad enough to do something as a payback for the screwing the banks have given the taxpayer….I just wish more people would take these a/holes to task….

Let Us Look Back At TARP

Lots of anger….lots of shouting….lots of frustration….lots of cash……lots of everything but justice….by justice I mean the justice where the people that paid the bail out tab got something in return….they got NOTHING….the taxpayer got fleeced!

Let us look back for a moment…..a moment provided by Andre Damon and Barry Grey of wsws.org:

It is worth recalling the justifications that were given at the time for the passage of TARP. Then-President George W. Bush went on national television after the collapse of Lehman Brothers in the fall of 2008 and declared that Wall Street had to be bailed out in order to rescue Main Street. The alternative, he said, was mass unemployment and the worst recession since the 1930s. The taxpayers had to bail out the banks, he insisted, in order to allow them to offload their bad assets so they could begin lending again to consumers and businesses.

These claims were lies. The banks have used their government handouts to boost their profits and further enrich their executives, big shareholders and creditors. They have refused to expand their loans to small businesses and consumers, contributing to the worst jobs crisis since the Great Depression. They have refused to sell off or write down their bad assets, confident that, in the end, the government will make sure that they are able to palm them off at top dollar, or, in extremis, bail them out again.

A good portion of the banks’ revived profits have come from the systematic and open gouging of the public. They have jacked up interest rates and fees on credit cards, imposed higher fees on checking account overdrafts, and gamed the foreclosure crisis in order to profit from the tragedy of families driven into homelessness and destitution.

The American taxpayer has gotten the shaft yet again….they voted for change and they got the same screwing they always get…….no lube….no kiss….no cash……nothing has changed….see what corporate cash can buy?  It buys lots of politicians, even though taxpayer’s money pays them to do a job for the whole country…..they disregard that pledge and work for the captains of industry….the same people that caused all the economic problems……

Cash For Caulkers

Another brilliant idea…..it accomplishes very little…..A rather ingenuous label……trying to tie it in to the semi-successful program of Cash for Clunkers….cute……But what is this program all about?

The program contains two parts: money for homeowners for efficiency projects, and money for companies in the renewable energy and efficiency space.

The plan will likely create a new program where private contractors conduct home energy audits, buy the necessary gear and install it, according to a staffer on the Senate Energy Committee and Nadel at the American Council for an Energy-Efficient Economy.

Big-ticket items like air conditioners, heating systems, washing machines, refrigerators, windows and insulation would likely be covered, Nadel said.

Consumers might be eligible for a 50% rebate on both the price of the equipment and the installation, up to $12,000, said Nadel. So far, there is no income restriction on who is eligible. That would mean a household could spend as much as $24,000 on upgrades and get half back.

A good idea?  IMO….HELL NO!  Why?  This will only help a small percentage of Americans…..think about it…..let us say you are a home owner who is finding it difficult to keep up with the mortgage payments….where will you find the money to spend on this?  Or better yet, 1 in 6 Americans is unemployed…that alone would not make it feasible to spend much needed money on home improvements….and then there is the tight credit for individuals….need I say more along that line?

Just where is the jobs creation?  At best, it is a band-aid for a gunshot wound……

So far the Obama Admin is doing NOTHING substantial to create jobs or to help Main Street……is this the change we voted for?  Not my idea of change but then I am sarcastic SOB……

Repubs On Jobs Creation

FLASH!  Zip!  Bang!

We have heard all the big ideas from the President and his boyz….he will put America back to work with the use of the left over TARP funds…..but what about the Repubs?  Do they have any ideas on how to end the rising tide of unemployment?

Ask and thou shalt receive……

Yesterday the Repubs in Congress offered up their plan for the creation of jobs…..(may I have a drum roll please)……..and their plan is………

Republican lawmakers Wednesday presented President Barack Obama with their plan to tackle unemployment, proposing a freeze on tax hikes until the jobless rate falls below five percent.

The plan also calls for more domestic production of energy, including oil, as well as corporate tax cuts intended to encourage firms to repatriate earnings collected abroad and the approval of pending free trade deals with Colombia, Panama and South Korea.

Tax cuts?  Approval of free trade agreements?  Wait!

The GOP is becoming more pathetic as each week goes by…..tax cuts?  That is their answer for a failing economy, the health crisis and now jobs…..it is tired and a proven failure…….oh then, we have the approval of free trade agreements…..think about that for a moment…… (insert pause of contemplation)…….. did not the out sourcing of American jobs overseas basically begin with the NAFTA debacle?  How many jobs did that piece of manure save or create in the US?

I cannot figure out why it takes Repubs so long to come up with a statement on any given issue……seeing how they have the same idea no matter the situation….TAX CUTS!  Maybe they, the Repubs, should spend less time playing golf or slinging insults at the opposition and try to come up with a REAL plan to save jobs……Just a thought……

Taxpayers Take Yet Another Screwing!

The bailout thing has been nothing but a good gang rape of the taxpayer from the beginning…..the bags of money delivered to Wall Street by the government  has done nothing for the taxpayer and everything for the greedy people on Easy Street…..

The Business journal is reporting:

CIT Group Inc. filed for bankruptcy protection Sunday after its board of directors approved of a plan to reorganize the giant small business lender.

The plan has also been approved by CIT’s creditors.

The bankruptcy of CIT is likely to hand the Treasury Department its biggest loss to date under the Troubled Asset Relief Program. It invested $2.3 billion in CIT last December.

CIT was caught in a squeeze between loans gone bad as the economy worsened in the past year and being cut off from the unsecured debt market, which it relied on for about 75 percent of its funding. More stable bank deposits made up less than 5 percent of its funds.

Wait!  Did the article say that the creditors approved the action?  Since the taxpayer is on the hook for billions……did anyone ask them if they approved?  I did not get a note asking me….how about you?

When are the people going to start exercising their muscle on all this silliness?

Time For Economic Good News?

Do not count on it.

The banks, some of them, will be allowed to repay about $68 billion and all is well…..only if you are on Wall Street.

The US Treasury Department on Tuesday approved the requests of 10 of the country’s biggest banks and financial firms to repay the bailout cash they received last year under the $700 billion Troubled Asset Relief Program (TARP).

Press reports listed the firms as JPMorgan Chase, Goldman Sachs, Morgan Stanley, American Express, Bank of New York Mellon, State Street, US Bancorp, Capitol One Financial, BB&T Corporation and Northern Trust.

So is this good news or not?  NOT!

Barry Grey has written:

The $68 billion being returned is more than double the administration’s initial projection of some $25 billion being paid back this year. The money is also being returned much earlier than the government originally intended.

The banks’ motives in repaying the TARP handouts are entirely self-serving. Their campaign to return the money began in earnest last February, when Congress attached a provision to the administration’s stimulus package limiting executive bonuses at firms holding TARP funds to one third of base salary. Wall Street was outraged, and getting out from under TARP became a central preoccupation of the banking elite.

Banks that repay their TARP cash also stand to save billions of dollars in dividend payments on preferred shares they were required to give the government in return for the taxpayer money.

In other news of the economy:

The US government is preparing to unveil rules on executive pay for firms that have been bailed out, reports the BBC.

President Barack Obama will also appoint a “pay czar” who can reject compensation plans at companies getting “exceptional assistance”.  Oh goody…yet another “czar”….there are more “czars” than reps in Washington.

The new rules on executive pay are expected to be announced by the end of the week.

But think about this…if the banks pay back the TARP cash…why will they listen to Washington on pay packages?  This is all so damn silly and ineffective….just like the Dems and Repubs in Congress…they are allowing Wall Street to make their own rules.

Barry Grey continues:

The stress tests allowed the government to declare the banking system “fundamentally sound,” despite the existence of at least a trillion dollars of bad debts on the banks’ balance sheets. They were designed to provide a further boost to the banks.

Since the results were announced on May 7, the banks have raised almost $90 billion through offerings of common stock and bond issuances. Bank stocks have continued to soar, with big-bank stocks rising 87 percent since their lows in early March.

By allowing most of the biggest banks to repay their TARP funds, entirely on the banks’ terms, the administration is essentially giving them a clean bill of health and providing a rationale for rejecting any serious regulation of their activities. Tuesday’s Treasury announcement sets the stage for the administration’s release of its financial regulatory proposals, set for next week.

Yes Irene…nothing is changing……and Wall Street will soon return to their speculative ways that bottomed out the economy and we can play this damn silly game all over again…because NO ONE has the balls to make Wall Street play fair.

Take The Money & Shut Up!

Do you remember all those Repub govs who did not want any of the stim money?  Some took it and others did so reluctantly, but there was always one who said he did not want any thing from Washington and that is the Gov of South Carolina, Mark Sanford.

South Carolina—-the third highest unemployment at 11.5%, had to cut $1 billion from its budget and has a sharply plunging tax revenue because of the recession.  A state that has a high percentage of poor people, low educational results and in other words a traditional Southern state.

South Carolina’s Supreme Court ordered Gov. Mark Sanford on Thursday to take $700 million in federal stimulus money aimed primarily at struggling schools.

The decision brings a likely end to months of wrangling between the nation’s most vocal anti-bailout governor and legislators who accused him of playing politics with people’s lives.

Now dickhead take the money and shut the hell up!

Was It Blackmail?

Bloomberg had an interesting, yet disturbing story recently, written by Eliot Blair Smith.

Former Treasury Secretary Henry Paulson, saying nine U.S. banks were “central to any solution” of the credit crisis, told their leaders to take government aid or be forced to by regulators, according to a memo prepared for an October meeting.

“If a capital infusion is not appealing, you should be aware that your regulator will require it in any circumstance,” Paulson’s one-page list of talking points for the session with the banks’ chief executives said. “We don’t believe it is tenable to opt out because doing so would leave you vulnerable and exposed.”

“Most Americans are going to be uncomfortable with the government forcing the banks into this arrangement,” said Tom Fitton, president of Judicial Watch, a nonprofit research group in Washington that obtained the documents under a Freedom of Information Act request.

I agree but just how “responsible” will the media be and see that the taxpayer knows of this situation?

In his memo, Paulson said the government would buy preferred stock in the banks, which he called “a significant part of our financial system” and “central to any solution.”

Three and a half hours after the meeting was scheduled to begin, Paulson had obtained the bankers’ signatures on half-page forms along with the handwritten amount of the federal government’s investment, according to the documents. He announced the actions publicly the next day.

In releasing the documents yesterday, Judicial Watch said Treasury initially said it had no records about the meeting.

The American people should know all the conditions of the bailout or the promise of transparency was nothing more than a campaign promise that did not come true.