Tag Archives: bailout

Fuck the Banks!











 “When their eloquence escapes me, their logic ties me up and rapes me!” – The Police

I don’t know about anybody else but all of this doublespeak coming out of Washington is blowing my high!  Note to self, don’t hit the bong and then watch a politician.  I feel like a fucking moron at an idiot’s convention.  All that I am hearing is that we’ve got to get the banks lending again.  From what I can gather, the banks are taking loans from the government at a 1% interest rate.  Subsequently, the banks are charging small businesses 9-14% for a loan.  Is it any wonder why Goldman Sachs announced a first quarter profit of over one billion dollars?

I also gather that the Government has put in place a series of stress tests that banks must meet requiring liquidity.  Having not taken economics since sometime in the last century I can only imagine that this means how much money the banks have on hand.  Requiring the banks to have a certain level of capital on hand would explain the high interest rates the banks are charging small businesses.  I also hear that the banks are fucking everybody with a credit card by raising their interest rates also.

Where I come from, we call that a racket!  Talk about eating your cake and having it too?  I am thinking about going to the Registrar’s Office and changing my double major of Philosophy and Religion to Wall Street Banking!  I know religion only fucks with people’s minds but being a Wall Street banker gets to fuck anything he/she wants.

I don’t want to hear anymore shit about hedge funds, leveraging, and mortgage backed securities.  I don’t want to hear any more shit about stress tests and liquidity.  I failed my stress test and my liquidity doesn’t start until after five.  You gave a great speech today Mr. Obama but for people like me, I need to see more than a glimmer of hope at the end of the rainbow when the moon is in the seventh house and Jupiter aligns with Mars and peace will guide the planets and love will steal the stars.  Show me some of the damn money!



Filed under Business, Politics

Don’t Ask, Don’t Tell!









As the above picture indicates, this is not a blog about gays in the military. “Don’t ask, don’t tell,” seems to be the new slogan at the Department of the Treasury.  Of the $350 billion welfare money handed out to Wall Street banks and insurance companies, no one seems to be able to account for the money.  The TARP money has been buried in the books of the companies that received the government handouts.  Where is the outrage?  Where is our inept Congress demanding accountability?  And has George W. Bush joined Dick Cheney in an undisclosed location?

Read this chilling account of where your taxpayer dollars went:

Elizabeth Warren, who chairs an oversight committee set up by Congress to oversee the bailout, is interviewed by the Associated Press in Washington, Thursday, Dec. 18, 2008.
AP Photo

Click to view a larger picture

Where’d the bailout money go? Shhhh, it’s a secret

Associated Press Writer

Think you could borrow money from a bank without saying what you were going to do with it? Well, apparently when banks borrow from you they don’t feel the same need to say how the money is spent.

After receiving billions in aid from U.S. taxpayers, the nation’s largest banks say they can’t track exactly how they’re spending it. Some won’t even talk about it.

“We’re choosing not to disclose that,” said Kevin Heine, spokesman for Bank of New York Mellon, which received about $3 billion.

Thomas Kelly, a spokesman for JPMorgan Chase, which received $25 billion in emergency bailout money, said that while some of the money was lent, some was not, and the bank has not given any accounting of exactly how the money is being used.

“We have not disclosed that to the public. We’re declining to,” Kelly said.

The Associated Press contacted 21 banks that received at least $1 billion in government money and asked four questions: How much has been spent? What was it spent on? How much is being held in savings, and what’s the plan for the rest?

None of the banks provided specific answers.

“We’re not providing dollar-in, dollar-out tracking,” said Barry Koling, a spokesman for Atlanta, Ga.-based SunTrust Banks Inc., which got $3.5 billion in taxpayer dollars.

Some banks said they simply didn’t know where the money was going.

“We manage our capital in its aggregate,” said Regions Financial Corp. spokesman Tim Deighton, who said the Birmingham, Ala.-based company is not tracking how it is spending the $3.5 billion it received as part of the financial bailout.

The answers highlight the secrecy surrounding the Troubled Asset Relief Program, which earmarked $700 billion – about the size of the Netherlands’ economy – to help rescue the financial industry. The Treasury Department has been using the money to buy stock in U.S. banks, hoping that the sudden inflow of cash will get banks to start lending money.

There has been no accounting of how banks spend that money. Lawmakers summoned bank executives to Capitol Hill last month and implored them to lend the money – not to hoard it or spend it on corporate bonuses, junkets or to buy other banks. But there is no process in place to make sure that’s happening and there are no consequences for banks that don’t comply.

“It is entirely appropriate for the American people to know how their taxpayer dollars are being spent in private industry,” said Elizabeth Warren, the top congressional watchdog overseeing the financial bailout.

But, at least for now, there’s no way for taxpayers to find that out.

Pressured by the Bush administration to approve the money quickly, Congress attached nearly no strings to the $700 billion bailout in October. And the Treasury Department, which doles out the money, never asked banks how it would be spent.

“Those are legitimate questions that should have been asked on Day One,” said Rep. Scott Garrett, R-N.J., a House Financial Services Committee member who opposed the bailout as it was rushed through Congress. “Where is the money going to go to? How is it going to be spent? When are we going to get a record on it?”

Nearly every bank AP questioned – including Citibank and Bank of America, two of the largest recipients of bailout money – responded with generic public relations statements explaining that the money was being used to strengthen balance sheets and continue making loans to ease the credit crisis.

A few banks described company-specific programs, such as JPMorgan Chase’s plan to lend $5 billion to nonprofit and health care companies next year. Richard Becker, senior vice president of Wisconsin-based Marshall & Ilsley Corp., said the $1.75 billion in bailout money allowed the bank to temporarily stop foreclosing on homes.

But no bank provided even the most basic accounting for the federal money.

Some said the money couldn’t be tracked. Bob Denham, a spokesman for North Carolina-based BB&T Corp., said the bailout money “doesn’t have its own bucket.” But he said taxpayer money wasn’t used in the bank’s recent purchase of a Florida insurance company. Asked how he could be sure, since the money wasn’t being tracked, Denham said the bank would have made that deal regardless.

Others, such as Morgan Stanley spokeswoman Carissa Ramirez, offered to discuss the matter with reporters on condition of anonymity. When AP refused, Ramirez sent an e-mail saying: “We are going to decline to comment on your story.”

Most banks wouldn’t say why they were keeping the details secret.

“We’re not sharing any other details. We’re just not at this time,” said Wendy Walker, a spokeswoman for Dallas-based Comerica Inc., which received $2.25 billion from the government.

One didn’t even want to say they wouldn’t say.

Heine, the New York Mellon Corp. spokesman who said he wouldn’t share spending specifics, added: “I just would prefer if you wouldn’t say that we’re not going to discuss those details.”

The banks which came closest to answering the questions were those, such as U.S. Bancorp and Huntington Bancshares Inc., that only recently received the money and have yet to spend it. But neither provided anything more than a generic summary of how the money would be spent.

Lawmakers say they want to tighten restrictions on the remaining, yet-to-be-released $350 billion block of bailout money before more cash is handed out. Treasury Secretary Henry Paulson said the department is trying to step up its monitoring of bank spending.

“What we’ve been doing here is moving, I think, with lightning speed to put necessary programs in place, to develop them, implement them, and then we need to monitor them while we’re doing this,” Paulson said at a recent forum in New York. “So we’re building this organization as we’re going.”

Warren, the congressional watchdog appointed by Democrats, said her oversight panel will try to force the banks to say where they’ve spent the money.

“It would take a lot of nerve not to give answers,” she said.

But Warren said she’s surprised she even has to ask.

“If the appropriate restrictions were put on the money to begin with, if the appropriate transparency was in place, then we wouldn’t be in a position where you’re trying to call every recipient and get the basic information that should already be in public documents,” she said.

Garrett, the New Jersey congressman, said the nation might never get a clear answer on where hundreds of billions of dollars went.

Associated Press writers Stevenson Jacobs in New York and Christopher S. Rugaber and Daniel Wagner in Washington contributed to this report


Filed under Business

Noun, Verb, “Keating Five!”










Keating Economics

John McCain And The Making Of A Financial Crisis.

The current economic crisis demands that we understand John McCain’s attitudes about economic oversight and corporate influence in federal regulation. Nothing illustrates the danger of his approach more clearly than his central role in the savings and loan scandal of the late ’80s and early ’90s.

John McCain was accused of improperly aiding his political patron, Charles Keating, chairman of the Lincoln Savings and Loan Association. The bipartisan Senate Ethics Committee launched investigations and formally reprimanded Senator McCain for his role in the scandal — the first such Senator to receive a major party nomination for president.

At the heart of the scandal was Keating’s Lincoln Savings and Loan Association, which took advantage of deregulation in the 1980s to make risky investments with its depositors’ money. McCain intervened on behalf of Charles Keating with federal regulators tasked with preventing banking fraud, and championed legislation to delay regulation of the savings and loan industry — actions that allowed Keating to continue his fraud at an incredible cost to taxpayers.

When the savings and loan industry collapsed, Keating’s failed company put taxpayers on the hook for $3.4 billion and more than 20,000 Americans lost their savings. John McCain was reprimanded by the bipartisan Senate Ethics Committee, but the ultimate cost of the crisis to American taxpayers reached more than $120 billion.

The Keating scandal is eerily similar to today’s credit crisis, where a lack of regulation and cozy relationships between the financial industry and Congress has allowed banks to make risky loans and profit by bending the rules. And in both cases, John McCain’s judgment and values have placed him on the wrong side of history.


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Filed under Politics

Palin: ‘What The Bailout Does Is Help Those Who Are Concerned About Health Care Reform’»








Ryan Powers – Sep 25, 2008  Think Progress

This morning on the CBS Early Show, Katie Couric previewed the second half of her interview with Gov. Sarah Palin (R-AK). During the interview, Couric asked Palin why she believes the Wall Street bailout is needed.

Palin responded incoherently by claiming that the bailout would “help those who are concerned about health care reform.” Palin then appeared to look down at her notes and says, “Oh, it’s got to be all about job creation”:

COURIC: Why isn’t it better, Governor Palin, to spend $700 billion helping middle-class families struggling with health care, housing, gas and groceries? … Instead of helping these big financial institutions that played a role in creating this mess?

PALIN: Ultimately, what the bailout does is help those who are concerned about the health care reform that is needed to help shore up the economy– Oh, it’s got to be about job creation too. So health care reform and reducing taxes and reining in spending has got to accompany tax reductions.

“She’s not always responsive when she’s asked questions,” Couric said of Palin. “It was a really interesting experience for me to interview her yesterday,” she added.

Yesterday afternoon, Sen. John McCain (R-AZ) canceled an appearance on the Late Show with David Letterman in order to do an unscheduled interview with Couric. In explaining why he believed the Wall Street bailout is necessary, McCain did not cite health care reform.

Digg It!


COURIC: She’s not always responsive when she’s asked question and sometimes does slip back to her talking points. So it was a really interesting experience for mer to interview her yesterday.

RODRIGUEZ: Let’s see if that’s the case here, we have an excerpt where you ask her about her opinion on the bailout.

COURIC: Why isn’t it better, Governor Palin, to spend $700 billion helping middle-class families struggling with health care, housing, gas and groceries? Allow them to spend more and put more money into the economy? Instead of helping these big financial institutions that played a role in creating this mess?

PALIN: That’s why I say, I like ever American I’m speaking with were ill about this position that we have been put in where it is the tax payers looking to bailout.

But ultimately, what the bailout does is help those who are concerned about the health care reform that is needed to help shore up the economy– Helping the — Oh, it’s got to be about job creation too. Shoring up our economy and putting it back on the right track. So health care reform and reducing taxes and reining in spending has got to accompany tax reductions and tax relief for Americas. A

And trade we’ve got to see trade as opportunity, not as a competitive scary thing. But 1 in 5 jobs being created in the trade sector today. We’ve got to look at that as more opportunity. ALl those things under the umbrella of job creation.

This bailout is a part of that.


Filed under Politics

More on Foreclosure!

Michigan among states leading in new home foreclosures

Associated Press

WASHINGTON — A record 9 percent of American homeowners with a mortgage were either behind on their payments or in foreclosure at the end of June, as damage from the housing crisis continues to mount, the Mortgage Bankers Association said Friday.

But the source of trouble in the mortgage market has shifted from subprime loans made to borrowers with poor credit to homeowners who had solid credit but took out exotic loans with ballooning monthly payments.

The problem is also concentrated in a handful of states, the worst being California and Florida. The real estate markets in those two states were fueled by some of the riskiest lending practices and rampant speculation during the housing boom that has turned into a devastating bust.

“That’s clearly the problem,” said Jay Brinkmann, the association’s chief economist. “The national numbers are driven by the two largest states” with the most outstanding home loans.

The latest quarterly snapshot of the market broke records for late payments, homes entering the foreclosure process and for the inventory of loans in foreclosure. The trade group’s records go back to 1979.

The percentage of loans at least 30 days past due or in foreclosure was up from 8.1 percent in the January-March quarter, using figures that were not adjusted for seasonal factors.

New foreclosures were concentrated in eight states: Nevada, Florida, California, Arizona, Michigan, Rhode Island, Indiana and Ohio.

But for the first time since the mortgage crisis started, delinquencies on subprime adjustable-rate loans declined. While more than one out of every five homeowners with a subprime ARM is still in default, that portion dipped 1 percentage point from the first quarter to 21 percent.

What’s driving the delinquency rate up now is the number of homeowners with risky, adjustable-rate prime loans made with little or no proof of the borrowers’ income or assets.

Many of these loans allowed the borrower to pay only the interest on the loan for a fixed period of time. Others gave borrower the option to “pick-a-payment,” adding any unpaid interest to the principal balance.

More than one out of 10 borrowers with a prime adjustable-rate loan is now delinquent or in foreclosure. That portion, 11.3 percent, was up from 9.7 percent in the first quarter and is expected to continue to rise as more homeowners see their monthly payments spike.


Filed under Society

Foreclose This!









There has been a lot of complaining and innuendo in a fairly high percentage of blogs that distort the facts.  Most of it has to do with the Community Reinvestment Act (CRA).  This program designed thirty years ago was an attempt to end the despicable practice of “redlining.”  “Redlining” was the historical practice of banks not loaning money to purchase homes in minority neighborhoods.  What is not being discussed is that while the CRA ended this practice, the banks affected by this new law did not have any of its branches located in the said neighborhoods.

So the biggest lenders in minority neighborhoods are mortgage companies who only offer subprime loans and are not full service banks that would have to lend fairly under the CRA.  Furthermore, the mortgages companies flipped the switch and aggressively went after consumers who may not have been seeking a loan or new loan through the use of telemarketing and brokers. 

A majority of these loans were refinancing ones where consumers were told they could get quick and easy cash to pay off other debt.  They were in effect being swayed by brokers and lenders offering to look out for their best interest when in reality they were just looking out for themselves. 

Another example of unfair lending practices is that in a Detroit neighborhood that is 97% black with an annual median income of $49,000 compared to its suburb Plymouth which is 97% white with an annual median income of $51,000 had a startling difference on the interest rates.  In the Detroit neighborhood about 70% carried a high interest rate while the rate was about 17% in Plymouth.

I am not an economist, a banker, a Wall Street type, or a lobbyist.  The reality of the situation is that we should not sit here and try to point fingers as to who is to blame.  We should be voicing our concern on how the current situation can be fixed, but more importantly to implement measures that will never allow this to happen again.  And for the record, I live in University Park, a neighborhood on the south side of Tallahassee, just south of the FAMU campus and there is not one home that has been foreclosed on or a for sale sign in any yard.

Sources: Dept. of Housing and Urban Development, Federal Housing Admin., and the NYT.


Filed under Society










Nearly three decades of Republican dominance may be coming to an end.

The Republican-led defeat of President Bush’s Wall Street bailout plan caused an immediate financial catastrophe: The stock market fell an unprecedented 777.68 points, wiping out, by one estimate, $1.2 trillion in wealth. But the greater and more lasting damage may be to the Republican Party itself.

Percentagewise, the Sept. 29 crash was one-third the size of Black Monday, the stock-market crash of Oct. 19, 1987. As I write, the Dow Jones Industrial Average has risen more than halfway back up (though stock prices remain volatile). It’s still possible to believe that the economy will return to normal in a year or two. For Republicans, though, the events of Sept. 29 could well be remembered as the start of a decadeslong exile from power—much as Democrats remember Nov. 4, 1980.

That’s not to say that John McCain is certain to lose this year’s election to Barack Obama. As I’ve noted before, this race has experienced so many abrupt reversals that we’re all starting to suffer from “game-changer” fatigue. At the moment, though, things seem to be going the Democrats’ way, with Obama up five or six points in national polls and swing states like Pennsylvania, Michigan, and Missouri trending toward him. Meanwhile, the GOP has virtually no hope of retaking Congress; indeed, it’s projected to lose seats in both the House and the Senate. Even if McCain wins, his past record of unpredictability combined with the likely imperative of working with a Democratic Congress suggest he’ll spend much of his time fighting with members of his own party. That would seem especially likely given the current banking crisis, which has forced the Bush administration, the House and Senate leadership of both parties, and McCain himself to practice lemon socialism.

The central con of the political coalition assembled by Ronald Reagan and maintained by his successors was that government was a common enemy. Middle-class social conservatives loathed the government for legalizing abortion, forbidding prayer in schools, and coddling minorities through welfare and affirmative action. Upper-class libertarian conservatives loathed the government for soaking the rich through the income tax and weakening businesses through burdensome regulation. The only useful function of the federal government was to provide for the common defense. This was a con for two reasons. First, the middle and upper classes were both dependent on the federal government for a variety of benefits, including Social Security, trade protection, scientific research, and assorted localized spending (termed “pork barrel” by those who don’t receive it and “economic development” by those who do). Second, the distribution of this government largesse greatly favored the rich. In the April 1992 Atlantic, Neil Howe and Philip Longman, citing unpublished data from the Congressional Budget Office, reported that U.S. households with incomes above $100,000 received, on average, slightly more in federal cash and in-kind benefits ($5,690) than households with incomes below $10,000 ($5,560). This was four years before the Clinton administration eliminated Aid to Families With Dependent Children, the principal income-support program for the poor. When tax breaks were added to the tally, households with incomes above $100,000 received considerably more ($9,280) than households with incomes below $10,000 ($5,690). Clinton subsequently expanded tax subsidies to the poor through the Earned Income Tax Credit, but not enough to undo this disparity. “[I]f the federal government wanted to flatten the nation’s income distribution,” Howe and Longman concluded, “it would do better to mail all its checks to random addresses.”

The Reagan coalition survived because nobody wanted to believe this and because both upper and middle classes were bought off with President George W. Bush’s tax cuts. (That the tax cuts favored the wealthy didn’t seem to matter.) But the proposed $700 billion bank bailout made it hard for Republicans to cling to their cherished illusion that government exists only to indulge spendthrift widows and orphans. Moreover, the $700 billion was needed to save the very beau idéal of conservatism, the free market. It was needed so badly that (after a few alterations to protect the taxpayers’ investment) liberal House Democrats like Barney Frank made common cause with conservative House Republicans like John Boehner to urge its passage. To a Republican Party that had come to believe its own propaganda, this simply didn’t compute. So, House Republicans voted against their standard-bearer’s own bailout by a margin of 2 to 1, a dose of free-market principles that sent the Dow into the crapper.

It should be remembered that a fundamentalist belief in untrammeled capitalism is not the first but, rather, the second pillar of Reagan-style Republicanism to fall. The first was the belief that the United States should extend military power wherever enemies lurk, regardless of what our allies do. Reagan didn’t actually practice this doctrine, except to overthrow a teensy regime in Grenada and to deploy (and, after a deadly terrorist bombing, withdraw) U.S. Marines in Lebanon; he preferred to level stern rhetoric against the Soviets (“Evil Empire”) while subsidizing proxy wars abroad, not always in accordance with the law. That the Soviet Union started to disintegrate on Reagan’s watch is mistaken by many for proof that it’s possible to defeat a powerful enemy by calling it names and spending a lot of money on (but never actually using) military weapons. President Bush, alas, took Reagan at his saber-rattling word, waging a war against Saddam Hussein so unilateral that, except for a few Kurds, there was no indigenous fighting force to prop up the way we propped up the ARVN in South Vietnam. The result was and remains, even after violence in Iraq has been greatly reduced, a lingering feeling even among Republicans that the Iraq war was at best a distraction from the more necessary fight against al-Qaida and the Taliban.

This is not, I’ll confess, the first time I’ve believed that the Republican ascendancy has ended. In 1994, I felt sure that the warmed-over Reaganite nostrums of Newt Gingrich’s “Contract With America” spelled defeat in the midterm elections. Instead, the Republicans gained control of both houses of Congress for the first time in four decades. I also thought the GOP was cracking up in 2000, when, desperate to find fault with every last aspect of the Clinton administration, it started bad-mouthing prosperity. I got that wrong, too. So maybe the GOP isn’t really dead.

It sure looks dead, though.


Filed under Politics