Tag: Taxpayers

AIG Plays The Country Well

American International Group Inc. appealed for its fourth U.S. rescue by telling regulators the company’s collapse could cripple money-market funds, force European banks to raise capital, cause competing life insurers to fail and wipe out the taxpayers’ stake in the firm.

AIG needed immediate help from the Federal Reserve and Treasury to prevent a “catastrophic” collapse that would be worse for markets than the demise last year of Lehman Brothers Holdings Inc., according to a 21-page draft AIG presentation dated Feb. 26, labeled as “strictly confidential” and circulated among federal and state regulators.

“What happens to AIG has the potential to trigger a cascading set of further failures which cannot be stopped except by extraordinary means,’’ said the presentation by New York- based AIG. “Insurance is the oxygen of the free enterprise system. Without the promise of protection against life’s adversities, the fundamentals of capitalism are undermined.’’

Regulators revised AIG’s bailout last week to ease loan terms and extend $30 billion in fresh capital after the firm posted a $61.7 billion fourth-quarter loss, the worst in U.S. corporate history. Lawmakers are reluctant to give more support beyond the package already in place, worth about $160 billion, because they say regulators haven’t given enough detail about how the funds are being used or when the bailouts will end.

The insurer’s first bailout package, crafted last September, later grew to $150 billion. After failing to sell enough subsidiaries to repay the government, AIG had to turn to U.S. taxpayers again. The company may need more support if financial markets don’t improve, the Treasury and Federal Reserve said last week in a joint statement.

Now ask…when will this stop?  How long must we, the taxpayer, subsidize AIG and the like?  When is enough, enough?

Look Where Your Money Goes

Look America!  This is where your tax money goes when it is used in the bailout.

John Thain, the former Merrill Lynch & Co. chief executive officer ousted yesterday, spent $1.2 million redecorating his downtown Manhattan office last year as the company was firing employees, a person familiar with the project said.

Thain hired Los Angeles-based decorator Michael Smith, chosen by President Barack Obama and his wife Michelle to redecorate the White House, CNBC reported. Thain paid Smith $837,000 and his purchases included $87,000 for area rugs, $25,000 for a pedestal table and $68,000 for a 19th century credenza, CNBC said.

Thain, 53, oversaw the sale of Merrill Lynch to Bank of America Corp. last month, and took over the bank’s wealth management and corporate and investment banking divisions. Merrill’s $15.4 billion fourth-quarter loss forced Bank of America to seek additional aid from the U.S. government, which last week agreed to provide $20 billion in capital and $118 billion in asset guarantees.

The antiques Thain reportedly purchased will probably hold their value over time, said Clinton Howell, a New York dealer in English furniture.

In light of Merrill’s $56 billion in losses from subprime loans and the credit crisis, $1.2 million spent on antiques hardly seems worth getting outraged over, Howell said.

See they care less about what you think as long as you keep feeding their greed and their desires for your tax dollar.  When will the American people say enough is enough?  They will but it will be way too late.

Taxpayers Pay To Help Banks Expand

I realize that the American people are worried and a bit perplexed over the bailout and how it is going to this point.  But there has got to be a line drawn of where our money is spent.  I am still dead set against using my money to help a bank acquire more holdings.

Bank of America Corp (BAC.N) will receive $20 billion in fresh government investments and a federal backstop against $118 billion of bad assets it holds to help it absorb Merrill Lynch & Co, U.S. officials said on Friday.

As part of an emergency plan announced by the Treasury Department, the Federal Reserve and Federal Deposit Insurance Corp, Treasury will provide Bank of America, the largest U.S. bank by assets, with $20 billion in fresh capital from a government bailout fund in exchange for preferred stock.

The government also agreed to share in losses on the troubled assets, which Bank of America took on when it paid an estimated $19.4 billion for Merrill on Jan. 1.

With the financial system foundering under a mountain of bad mortgage-related debt, officials feared a deteriorating capital base at Bank of America, which has already received $25 billion from the government, posed a risk to the financial system as a whole.

Sorry but this story just pisses me off…….We are payiung a bank to assume the debt and problems of another entity.  Where is this good business practice?  Where is this wise use of the taxpayers money?

Any thoughts?  Please share.

TARP Application

TARP, the Troubled Assets Recovery Plan, legal-ese for the “Bailout”.  If you have ever filled out a loan application, was it ever easy?

My last major purchase I had to promise to give them a quart of blood or my first male born.  In other words it was a trying and complicated ordeal.  But the group that fleeced the American taxpayer out of billions had it much easier than “Joe Sixpack” has ever had it.  When will the American people wake up and smell the damn coffee?

Below is the application that an institution needs to fill out to receive billions of dollars of taxpayer money.  There is more paperwork to buy a TV than to get billions.  Why is that?

Please complete the following information and follow the submission instructions as described
on your Federal banking agency’s website. In addition to completing the information on this
form, please provide a description of any mergers, acquisitions, or other capital raisings that are
currently pending or are under negotiation and the expected consummation date (no longer than
1 page).
In the event the applicant files an application with the appropriate Federal banking agency
prior to the availability of the investment agreement, the applicant must file an amended
application which includes updated responses to any items in the application that required prior
review of the investment agreement.
Institution Name:

Address of Institution:

Primary Contact Name:
Primary Contact Phone Number:
Primary Contact Fax Number:
Primary Contact Email Address:
Secondary Contact Name:

Secondary Contact Phone Number:

Secondary Contact Fax Number:
Secondary Contact Email Address:

Page 2

RSSD, Holding Company Docket
Number and / or FDIC Certificate
Number, As Relevant:
Amount of Preferred Shares
Requested:
Amount Of Institution’s Authorized
But Unissued Preferred Stock
Available For Purchase:
Amount Of Institution’s Authorized
But Unissued Common Stock:
Amount Of Total Risk-Weighted
Assets As Reported On The
Holding Company’s Or Applicable
Institution’s Most Recent FR-Y9,
Call Report, Or TFR, As Relevant:
Institution Has Reviewed The
Investment Agreements And
Related Documentation On
Treasury’s Website (Yes/No):

Describe Any Condition, Including
A Representation Or Warranty,
Contained In The Investment
Agreements And Related
Documentation, The Institution
Believes it Cannot ComplyWith By
November 14, 2008 And Provide A
Timeline For Reaching
Compliance1:
Type of Company2:
Signature of Chief Executive
Officer (or Authorized Designee):
Date of Signature:

You mean NOTHING to the people in charge!  You are their cash cow.  Is it not about time to get angry?  You wanted change and you got screwed!  Smile!  It ain’t over yet, but the next time bring your vasoline, maybe it will not hurt so bad.

Where Is The Love?

Yesterday Paulson spoke for 45 minutes explaining the progress of the bailout and the markets bombed for a third straight session.

An increasingly despondent Wall Street fell for the third straight session Wednesday as investors absorbed another series of dismal corporate reports and news that the government won’t buy banks’ soured mortgage assets after all. The Dow Jones industrials dropped more than 410 points, and all the major indexes lost more than 4 percent.

The stock market has lost about $1 trillion over the past three days, according to the Dow Jones Wilshire 5000 index, which reflects the value of nearly all U.S. stocks.

The market started the day falling on more signs that companies are being hurt by a severe pullback in consumer spending. Macy’s Inc. said it lost $44 million in the third quarter as sales at the department store retailer fell more than 7 percent. And consumer electronics retailer Best Buy Co. slashed its fiscal 2009 guidance on fears that consumer spending will erode even further.

Paulson also announced a new goal for the program to support financial markets that supply consumer credit in such areas as credit card debt, auto loans and student loans. He said, “with a stronger capital base, our banks will be more confident” to support economic activity.

Still nothing Paulson said would lead me to believe that there is anything being done for the people.  But wait!  All involved keep saying that the possiblity of a profit being made is good and that would mean that the taxpayer made money…….thinking…….does that mean we all will get checks?  Or is that just a way to keep the taxpayer at bay and smiling?

Paulson is getting little or no love for his plans…..he rushed the bailout through Congress with the prediction of a failing economy…..they passed the bill…and the economy failed…..is it not about time to regroup and fins a way to make Main Street the most important thing?

American Express Wants Money

AS reported in the WSJ.  AmEx is trrying to get some of that bailout pie.

American Express Co. which is being hit by slowing consumer spending and rising defaults, is seeking roughly $3.5 billion in taxpayer-funded capital from the federal government, according to people familiar with the situation.

The card issuer is the latest company not directly hit by the housing crisis to request cash from the federal government. While retailers, car companies and others hit by the slowdown in consumer spending haven’t gotten the government money, financial firms of all kinds are getting federal bailouts.

It isn’t clear if the application under the Troubled Asset Relief Program came before or after the credit- and charge-card giant got Federal Reserve approval Monday to become a bank-holding company.

So far, 52 financial institutions have received preliminary or final approval for about $172 billion of the $250 billion available under the capital-infusion program, according to Keefe, Bruyette & Woods, a New York firm that specializes in the financial-services industry. Another 23 companies have submitted applications for an additional $4.6 billion.

Please…what is next?  The Bank of Home Depot?  National Bank of Applebees.  The greed is getting massive, they are all scrambling trying to find ways to get the taxpayers money.  I mean it is a great deal……

It Is An End Run

Last week’s bail-outs by the Federal Reserve Bank and Treasury in the US demonstrated how seriously the government and financial sector treat the current situation and that they are prepared to go to great lengths to prevent the financial system descending into total collapse and to defend the most powerful citadels of the capitalist system.

They have brought a short-term reprieve, halting the downward plunge on stock markets and partially restoring some of the most recent losses. This relatively small lift in share market indexes should not be taken as an indicator that the worst is over, as suggested by some economic commentators attempting to talk up the economy.

This was confirmed on September 20, when the Bush administration announced that it was seeking a blank check from Congress of up to $US700 billion to buy up distressed mortgage-related assets from private firms. To put that amount into perspective, it is more than the annual budget for the Pentagon — more than $2,000 for every man, woman and child in the US (comparisons from New York Times, 21-09-08).

This is the same administration that preaches the free market gospels and says government has no role in social welfare. When it comes to the financial gods, Bush’s “no bail-out” policy was thrown out of the window, and the dollars gushed out of the corporate welfare tap.

“This is a big package because it was a big problem,” Bush said in defence of the $US700 billion proposal. He made the point that “the risk of doing nothing far outweighs the risk of the package, and that, over time, we’re going to get a lot of the money back.” There are, of course, other ways of doing nothing!

The Democrats have agreed to support the Bill when it hits Congress this week, on one condition: that the Bill also provides help for ordinary people in the form of an economic stimulus package. Democrat House president Nancy Pelosi said the “Democrats will work with the administration to ensure that our response to events in the financial markets is swift, but we must insulate Main Street from Wall St and keep people in their homes.” Ms Pelosi said that the Democrats would insist on “enacting an economic recovery package that creates jobs and returns growth to our economy.”  (Stop!  I cannot contain my laughter)

Bush portrays the bail-out of the financial sector as helping every American. In reality, it is a scheme to transfer the losses of the financial conglomerates onto American taxpayers.

It Is A Rescue, Not A Bailout!

How nice.  Call it what you will, but a bag of manure will smell like a bag of manure.

A Rescue?  Who the hell are they truly rescuing?

When The Congress is asked about the bailout, oh damn, rescue they always say the taxpayer will not be able to get a car loan, or a student loan or a mortgage, or small business will not be able to meet payroll.  First of all, if the company has to borrow money to make payroll, then it is time for it to fail.  Then they say that it is not a bailout, even to the point of becoming angry.  But asked where the money will go if it is passed.

Rescue is the term of the day.  Why?  It sounds less ominous.  Put a pretty face on something ugly.  Kind of like the rain forest, when it is a jungle; easier to raise money for something pretty like a rain forest.

All keep saying that this is for Main Street, not Wall Street.  And that if all goes well then the taxpayer will make money on the situation.  Where?  And when will my check be in the mail?

The Congress is tap dancing like a drunk on crack.  All of these guys with the exception of a few, all look like a deer caught in the headlights.  They understand the situation about as much as Main Street does.  All economists say that this will only save parts of the economy and that jobs loss, foreclosures, and higher prices are just around the corner.  If true how will throwing money at this crisis stop those things from occurring?

So if the bill is passed by both houses then the American taxpayer will win in the long run.  That reminds me of a quote.

Long run is a misleading guide to current affairs. In the long run we are all dead.
John Maynard Keynes

Enough said?  Peace Out

Economic Ideas From Readers

I the past several days I have been getting emails from readers that have ideas for the economy.  Thought I would post a couple that I found interesting.

From a reader in Colorado:

If worse becomes worser why not try these?

1–freeze wages

2–freeze prices

3–tax speculation

4–control CEO compensation

This was an interesting one by Anonymous:

Take the money from the bailout send it to taxpyer to pay off their debt.  Funds to spent only on elimination of debt.  Debt has to be at least 1 year old.  This would be better than giving it to theives to guard it in good faith.

Most Americans Hurt By Crisis

More than half of Americans — 56% — say their financial situation has been harmed by the financial meltdown in the past two weeks with 20% saying it has been harmed a great deal, according to a new USA TODAY/Gallup Poll.

Their longer term outlook is even more gloomy, with 69% saying their finances will be harmed in the long run and 28% saying they’ll be harmed a great deal.

The Tuesday night poll of 1,021 adults came the day after the House of Representatives failed to pass a $700 billion bailout to shore up the U.S. financial system, leading to a $1.2 trillion loss in stock values on Wall Street before the market recovered somewhat on Tuesday.

The Senate countered by scheduling a vote tonight on another bailout package after agreeing to a higher limit for insured bank deposits and added tax breaks.

Despite the huge loss on Wall Street following the first failure of the bailout package, only 20% in the poll said Congress should pass a bill like the one they defeated while 57% said Congress should start over but do something. Fourteen percent said Congress should do nothing.