The TARP TRAP – Banks Want to Return TARP Money

March 30, 2009 · Posted in General Economics · Comment

CNN writes Bankers: Take your TARP money back:

There’s a growing sense among some bankers that Troubled Asset Relief Program known as “TARP” has become toxic. As a result, they want to bail out of the bank bailout program.

“It should be called ‘TRAP,’ not TARP,” said Brian Garrett, chief executive of Bank of the Bay in San Francisco, who is trying to return bailout funding. “Giving it back is harder than getting it.”

Garrett and other bank executives complain the Treasury’s program to stabilize banks during these turbulent times is actually weighing down their potential for growth.

They’re especially concerned the limits on executive compensation – imposed in February, four months after Treasury starting sending out checks – could make it difficult to hold on to star talent who may jump to financial institutions that are not receiving any Government assistance.

That concern is now magnified after the public whipping insurance giant AIG received for granting executive bonuses. No one wants to be the next AIG (AIG, Fortune 500).

“Things have changed since TARP was announced. The rules have changed,” said Michael McMullan, CEO of the Bank of Florida, who withdrew his application for TARP funds Thursday. “We’re going to need to attract and retain key revenue drivers and great bankers.”

“The more restrictions that we are placed under from the Government, the less value we can deliver to our shareholders in the long run,” said McMullan.

Iberiabank in Louisiana, California’s Bank of Marin, and TCF Financial in Minnesota confirm to CNN Money that they are asking Treasury to take back their TARP funds.

“What these bank managers are saying is – listen, I want the Government out of my backyard, and I just want to give back the TARP, and I want to run my company by myself,” said Paul Miller, Financial Services Analyst at FBR Capital.

TARP is a miserable failure in every regard. The fact that banks are now trying to return money and the Treasury won’t let them is just another perverted outcome of a misguided, panic-driven, and irresponsible policy.

Please consider what I wrote back in mid February:

Most of these banks are now sitting on liabilities that pay out a fixed 5% annually without being able to pass the money on at a premium. Expect them to either buy back those shares (if they can) or at least not to accept any more government money from hereon out.

Whenever a government embarks upon a big project whose scope goes beyond the task of protecting the individuals’ life, health, or property, it is a safe bet that the project will be a disaster, that it will have unintended consequences, and that it will aggravate the situation it was supposed to cure.

These two quotes must be getting old at this point, but I will keep using them where appropriate until everybody gets it once and for all and acts accordingly:

Ayn Rand wrote in Atlas Shrugged in 1957:

“Politicians invariably respond to crises — that in most cases they themselves created — by spawning new government programs, laws and regulations. These, in turn, generate more havoc and poverty, which inspires the politicians to create more programs . . . and the downward spiral repeats itself until the productive sectors of the economy collapse under the collective weight of taxes and other burdens imposed in the name of fairness, equality and do-goodism.”

Ludwig von Mises wrote in his analysis Interventionism in 1940:

The various measures, by which interventionism tries to direct business, cannot achieve the aims its honest advocates are seeking by their application. Interventionist measures lead to conditions which, from the standpoint of those who recommend them, are actually less desirable than those they are designed to alleviate. They create unemployment, depression, monopoly, distress. They may make a few people richer, but they make all others poorer and less satisfied. If governments do not give them up and return to the unhampered market economy, if they stubbornly persist in the attempt to compensate by further interventions for the shortcomings of earlier interventions, they will find eventually that they have adopted socialism.

Tags: ayn rand, Ludwig von Mises, tarp

Gordon Brown – The Devalued Prime Minister

March 29, 2009 · Posted in Politics · 1 Comment

Well done, Mr. Hannan…

Tags: daniel hannan, gordon brown

Commercial Property Crunchtime

March 27, 2009 · Posted in Business · 1 Comment

The Wall Street Journal writes Commercial Property Faces Crisis (notice the bold part) :

Commercial real-estate loans are going sour at an accelerating pace, threatening to cause tens of billions of dollars in losses to banks already hurt by the housing downturn.

The delinquency rate on about $700 billion in securitized loans backed by office buildings, hotels, stores and other investment property has more than doubled since September to 1.8% this month, according to data provided to The Wall Street Journal by Deutsche Bank AG. While that’s low compared with the home-mortgage delinquency rate, it’s just short of the highest rate during the last downturn early this decade.

Some experts say it now looks as if the current commercial real-estate slump will rival or even exceed the one in the early 1990s, when bad commercial-property debt played a big role in dragging the economy into a recession. Then, close to 1,000 U.S. banks and savings institutions failed. Lenders took about $48.5 billion in charges on commercial real-estate debt between 1990 and 1995, representing 7.9% of such debt outstanding.

Since late 2007, a total of 47 banks and savings institutions have failed, of which a dozen or so had unusually high commercial-mortgage exposure. Foresight Analytics in Oakland, Calif., estimates the U.S. banking sector could suffer as much as $250 billion in commercial real-estate losses in this downturn. The research firm projects that more than 700 banks could fail as a result of their exposure to commercial real estate.

These numbers are truly staggering. This goes to show us that the correction is very very far from over. Anyone who talks about a speedy recovery or calls a bottom at this point is blithely ignoring, among other things, the impending collapse of commercial property values, rents, loans, and the effect that it will have on a significant number of banks and businesses.

The fact that the delinquency rate is still relatively low shows us that this is only just the beginning:

Who seriously doubts that this commercial property implosion will be much more severe than the one in the 90s and in 2003?

Some excerpts of my writings on this topic over the past year:

Holiday retail sales down:

I expect that in 2009 commercial real estate will finally be recognized by the wide public as the disaster it is. Amercia doesn’t need any more Malls. Companies with high exposure to commercial retail properties will suffer. Stocks of Simon Properties Group (SPG) and Federal Realty Trust (FRT) will follow General Growth Properties (GGP) and tumble.

2009 – An Outlook:

Commercial real estate and consumer credit will be the next sub-prime crisis and companies from those industries will get in line for massive bailouts

Macy’s to Close 10 Stores:

…more bad news for commercial real estate as already mentioned in Holiday Retail Sales Down. The impact of Macy’s closing down just 1 location will be devastating for anyone who rents out the space. Multiply that by 10.

Retail and Food Service Sales Down:

This is consistent with a miserable shopping season, closing chain stores, and contracting consumer credit. In addition it is important to stress again and again the disastrous consequences that this whole trend will continue to have on commercial real estate in the US.

Virgin Closes 2 More Megastores:

It cannot be pointed out often enough what a devastating disaster still awaits the commercial property industry. It will make the current residential real estate bust look like a soft landing.

I may add to this: This implosion of commercial real estate will not be confined to the United States. It will spread like a global epidemic. In particular China has a lot of excess space. Its current export contraction will only add to the decline in values and rents. It will affect the entire region around it, including the popular property trusts in Singapore and Hong Kong.

Buckle up, get ready for commercial property crunchtime…

Tags: commercial real estate

Ayn Rand Predicts Move Toward Collectivism in USA

March 26, 2009 · Posted in Philosophy · 2 Comments

This is from an interview with her in 1959:

Tags: ayn rand, collectivism, objectivism

Geithner’s Desperate Power Grab

March 25, 2009 · Posted in Interventionism · 2 Comments

People have to understand that government-made crises always precipitate a grab for more power by the very institution who causes them. Thus, in a predictable and mindless effort … U.S. Seeks Expanded Power to Seize Firms:

The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, according to an administration document.

The government at present has the authority to seize only banks.

Giving the Treasury secretary authority over a broader range of companies would mark a significant shift from the existing model of financial regulation, which relies on independent agencies that are shielded from the political process. The Treasury secretary, a member of the president’s Cabinet, would exercise the new powers in consultation with the White House, the Federal Reserve and other regulators, according to the document.

The administration plans to send legislation to Capitol Hill this week. Sources cautioned that the details, including the Treasury’s role, are still in flux.

Treasury Secretary Timothy F. Geithner is set to argue for the new powers at a hearing today on Capitol Hill about the furor over bonuses paid to executives at American International Group, which the government has propped up with about $180 billion in federal aid. Administration officials have said that the proposed authority would have allowed them to seize AIG last fall and wind down its operations at less cost to taxpayers.

The administration’s proposal contains two pieces. First, it would empower a government agency to take on the new role of systemic risk regulator with broad oversight of any and all financial firms whose failure could disrupt the broader economy. The Federal Reserve is widely considered to be the leading candidate for this assignment. But some critics warn that this could conflict with the Fed’s other responsibilities, particularly its control over monetary policy.

The government also would assume the authority to seize such firms if they totter toward failure.

Besides seizing a company outright, the document states, the Treasury Secretary could use a range of tools to prevent its collapse, such as guaranteeing losses, buying assets or taking a partial ownership stake. Such authority also would allow the government to break contracts, such as the agreements to pay $165 million in bonuses to employees of AIG’s most troubled unit.

The Treasury secretary could act only after consulting with the president and getting a recommendation from two-thirds of the Federal Reserve Board, according to the plan.

Geithner plans to lay out the administration’s broader strategy for overhauling financial regulation at another hearing on Thursday.

The authority to seize non-bank financial firms has emerged as a priority for the administration after the failure of investment house Lehman Brothers, which was not a traditional bank, and the troubled rescue of AIG.

“We’re very late in doing this, but we’ve got to move quickly to try and do this because, again, it’s a necessary thing for any government to have a broader range of tools for dealing with these kinds of things, so you can protect the economy from the kind of risks posed by institutions that get to the point where they’re systemic,” Geithner said last night at a forum held by the Wall Street Journal.

The powers would parallel the government’s existing authority over banks, which are exercised by banking regulatory agencies in conjunction with the Federal Deposit Insurance Corp. Geithner has cited that structure as the model for the government’s plans.

Tim Geithner’s lack of understanding is truly astonishing. I haven’t heard him say a single thing that made sense. He is as lost as Ben Bernanke when it comes to understanding the workings behing credit expansion, and its inevitable result, the credit crunch.

His actions are nothing new. Ayn Rand wrote in Atlas Shrugged in 1957:

“Politicians invariably respond to crises — that in most cases they themselves created — by spawning new government programs, laws and regulations. These, in turn, generate more havoc and poverty, which inspires the politicians to create more programs . . . and the downward spiral repeats itself until the productive sectors of the economy collapse under the collective weight of taxes and other burdens imposed in the name of fairness, equality and do-goodism.”

Ludwig von Mises wrote in his analysis Interventionism in 1940:

The various measures, by which interventionism tries to direct business, cannot achieve the aims its honest advocates are seeking by their application. Interventionist measures lead to conditions which, from the standpoint of those who recommend them, are actually less desirable than those they are designed to alleviate. They create unemployment, depression, monopoly, distress. They may make a few people richer, but they make all others poorer and less satisfied. If governments do not give them up and return to the unhampered market economy, if they stubbornly persist in the attempt to compensate by further interventions for the shortcomings of earlier interventions, they will find eventually that they have adopted socialism.

The Obama administration is doing everything it can to continue the interventionist path that the U.S. has been on since the beginning of the 20th century. There is absolutely no change coming in this matter. The outcome of these policies is pre-ordained. Ayn Rand and von Mises are just a few among many who predicted long ago what would happen.

Our leaders would be well advised to pick up some of their books, book a trip to the Bahamas, and just read for a couple of months. That would be the best possible stimulus plan I could think of.

Tags: ayn rand, Interventionism, Ludwig von Mises, tim geithner

Ron Paul’s Push for Transparency Gains Support

March 24, 2009 · Posted in General Economics · 1 Comment

First off, please consider Ron Paul’s excellent explanation of the importance of entrepreneurial profit and loss and how bankruptcies of failing operations would actually be the real stimulus:

Support for his important bill is skyrocketing:

Ron Paul’s “Federal Reserve Transparency Act” to audit the Federal Reserve is now up to 39 co-sponsors the House, and an identical companion bill, S604, has been introduced in the Senate. Here are the House co-sponsors:

Young (R-AK), McClintock (R-CA), Woolsey (D-CA), Rohrabacher (R-CA), Castle (R-DE), Stearns (R-FL), Grayson (D-FL), Buchanan (R-FL), Posey (R-FL), Kingston (R-GA), Price (R-GA), Broun (R-GA), Abercrombie (D-HI), Burton (R-IN), Fleming (R-LA), Alexander (R-LA), Bartlett (R-MD), McCotter (R-MI), Bachmann (R-MN), Peterson (D-MN), Akin (R-MO), Taylor (D-MS), Rehberg (R-MT), Jones (R-NC), Foxx (R-NC), Garrett (R-NJ), Heller (R-NV), DeFazio (D-OR), Platts (R-PA), Duncan (R-TN), Wamp (R-TN), Blackburn (R-TN), Poe (R-TX), Paul (R-TX), Marchant (R-TX), Burgess (R-TX), Chaffetz (R-UT), Petri (R-WI), Kagen (D-WI), Lummis (R-WY)

32 Republicans and 7 Democrats so far.

Sign this petition for more transparency, regulation, and freedom.

Tags: audit the fed, federal reserve bank, ron paul

Talks About Global Currency Gain Traction

March 22, 2009 · Posted in General Economics · 10 Comments

Many thanks to my friend LauraB for pointing this out:

In an exchange with her I added my 2 cents to the ongoing rumors about the possibility of a move toward a global currency:

It is certainly true that there are many things hinting at something like this. The central banks executives and finance ministers keep meeting on a regular basis now. If the European elites were able to sell to the European public the flawed idea of a pan-European currency, what keeps the international elites from doing the same to the world population? But in order for something like this to appear even remotely palatable a long worldwide PR campaign will be necessary.

Right now, with all the trouble that these clueless people are dealing with, I just don’t see how they can stack on top of that the project of unifying the currencies of the world into one world currency. If anything, I think this will be a very very long term project.

If you look at the description of SDRs (http://en.wikipedia.org/wiki/Special_Drawing_Rights), they already possess a lot of the features that the European Currency Unit had in Europe as a prelude to the Euro.

I expect that if there is to be a concerted move toward a world currency, it will coincide with more and more talk about SDRs in the news and in the government propaganda all around the world.

Laura points out the following on this matter:

Good call on the increasing talk in the media of Special Drawing Rights (SDRs) before the push for a global currency.

Here are two articles from last week that mentioned SDRs:

1. U.N. panel says world should ditch dollar
http://www.reuters.com/article/newsOne/idUSTRE52H2CY20090318?pageNumber=2&virtualBrandChannel=10452&sp=true

According to this article, the U.N. Commission of Experts on International Financial Reform will recommend to the U.N. on March 25, 2009 that “the world ditch the dollar in favor of a shared basket of currencies.” Under the heading “Good Time”, U.N. panel member Avinash Persaud talks about using something like an expanded SDR as the reserve currency.

This is the link to the accompanying video of the interview with U.N. panel member Avinash Persaud, who is also chairman of consultants Intelligence Capital and a former currency chief at JPMorgan:
http://www.reuters.com/news/video?videoId=100494&newsChannel=wtMostRead

2. China backs talks on dollar as reserve -Russian source
http://www.reuters.com/article/usDollarRpt/idUSLJ93633020090319

According to the article, ” The source said the Chinese paper envisaged the International Monetary Fund’s Special Drawing Rights (SDRs) being first assigned a role of a clearing currency on some transactions and then gradually becoming the main global reserve currency.” The article also mentions that the U.N. panel is looking at using expanded SDRs as a new reserve currency.

The article says that Russia plans on raising the issue at the G-20 meeting on April 2, 2009. According to the article, “The source said that India did not object to the discussion but was not prepared to take the lead. The source said South Korea and South Africa backed the idea, while developed nations were not “allergic” to it.” The Russian Finance Minister told reporters that he thought “it would take up to 30 years to create a new super-currency.”

A global currency would aggravate all the disastrous effects of national central banking enormously. There can’t be any doubt that the idea is nontheless becoming more and more palatable to world leaders. No matter how distant its potential fruition, individuals worldwide need to make sure these harmful aspirations are nibbed in the bud and reject the idea unconditionally.

What we need is the exact opposite. The global monetary system needs to become less centralized so as to increase and enhance regulation. We do need more regulation, not more government decrees, monopolies, and power that lead to less regulation. A global central bank would be just that. There simply is no better regulation of the global money and credit markets than Gold’s Honest Discipline. The history of money has shown us this time and again.

Tags: global currency, sdr, special drawing right

Net Drain on US Foreign Reserves

March 21, 2009 · Posted in Global Economics · 3 Comments

Asia Times’ Julian Delasantellis article US Fed’s move is the bigger problem would be a brilliant piece if he didn’t continuously make the assumption that what caused the US financial crisis was an outgrowth of a lack of government rules and decrees (Please see Credit Expansion Policy and The Business Cycle). That gaffe taken aside, he makes a lot of good observations. In particular:

The first article I ever wrote for Asia Times Online, (US living on borrowed time – and money” March 28, 2006), introduced readers to the US Treasury’s monthly Treasury International Capital (TIC) report, a compendium of how much investment
or short-term capital the US receives from foreign sources every month. Back then, the US was quite the popular parking spot for foreign capital, frequently drawing in over $100 billion a month.

That worm has certainly turned; the US in January, the last month data is available, was actually net drained of foreign capital, to the tune of $150 billion. On his blog at the Council of Foreign Relations, economist Brad Setser interpreted the data this way.

Today’s TIC January data was a disaster. $150 billion in (net) capital outflows (negative $148.9 billion to be precise) cannot sustain even a $40 billion trade deficit.

Obviously, the concern is that those with still the capital to lend to the US, primarily China, seeing the huge increase in US government demand for borrowed funds with its now huge and ever-burgeoning budget deficits being used to finance the economic crisis recovery programs, will fear that the US dollars they use to buy US debt will depreciate in value, devastating the value of their investments.

Previously, China has tried to give messages that slowly pulling out of its dollar positions was exactly what it wanted to do, but America’s cherished habit of ignoring anything that foreigners say to it had it lending a stone-deaf ear to the warnings.

One can only hope that China will act in accordance with its rhetoric. A Chinese withdrawal from additional purchases of US Treasury securites will make the American people wake up to reality and understand the consequences of their government’s policy of inflation. When exactly this will happen is hard to determine. The current deflation may continue to go on for a very long time, in spite of all the Fed’s desperate attempts to reflate.

More on China-US relations in the US Current Account Deficit and in US on the Hook for Chinese Investments.

Tags: china us dependency, inflation

This Norouz, Shake Hands with a Persian…

March 20, 2009 · Posted in General Economics · 1 Comment

There is no need to be scared of Iran and her inhabitants, the Persians. No really, behind the facade of black, black, and black wardrobe, Armani jeans (fake), designer sunglasses (also fake), and Rolex watches (definitely fake), lies a harmless, joyful, friendly, and peaceful soul.

So peaceful, that in 1951 the nation elected a leader in a clear and decisive democratic election. But unfortunately the US and British government deemed it a good idea to remove Mohammed Mossadeq from power in a coup d’etat that would reinstate Shah’s absolute despotic powers over all branches of government and society.

The Shah’s regime was ruthless and uncompromising. Dissent was crushed without mercy. Iran’s people didn’t take kindly to this tutelage. Nor did they appreciate the US government’s ongoing support for the Shah’s regime.

In 1979, the inevitable occurred. The political pendulum swang where it had to swing. Radical extremists, backed by the revolutionary spirit of the populace, and lead by the popular Ayatollah Khomeini, took power in a sweeping subversion. He promised change. And things did change, unfortunately not for the better.

Thanks to US foreign policies we are right now able to observe a buildup toward the same kinds of radical subversions in other middle eastern countries. Don’t ever let it be said that no one warned against the inevitable blowbacks of an ongoing US support of the Pakistani military and nation building efforts in Afghanistan.

Today Iran is surrounded by American bases and soldiers. It is hard to find a spot on the map in the region that is not under US control or at least watchful oversight.

Americans need to ask themselves some simple questions: If we were surrounded by Iranian military bases and soldiers, stationed in Canada, Mexico, Honduras, Cuba, and the Caribbean, what would we do? How would we feel if they just recently, in an unconstitutional undertaking and against the advice and will of all major players in the world, invaded one of these countries and continue to occupy it. What would we do if we knew that those who surround us possess thousands of nuclear warheads, ready to be deployed with the click of a button. How in particular would we feel about being surrounded by the only nation in world history that ever actually utilized nuclear weapons in order to completely annihilate two Japanese cities in 1945. How, especially, would we feel, if that nation was constantly sending threats our way, and calling us part of an “axis of evil”? How lightly would we take the bitter memory that this nation was instrumental in overthrowing our democratically elected Prime Minster in 1953?

Would we not be a little bit upset? How would we feel about not possessing nuclear weapons? Would we not feel like we have the right to own those as well?

Ultimately we all want peace. But it doesn’t work one way. Both sides need to come together.

It is Norouz, Persian New Year. But it can also be a new beginning, usher in a new era of peace and diplomacy, if only we want to. We have a new president who seems to be eager to get to this point. At least his language suggests this, his actions so far haven’t.

This Norouz, if you haven’t done so already, shake hands with a Persian. Maybe even give him a hug. He’ll appreciate it. Tell him “Eide shomah mobarak!”. He will be delighted.

Below President Obama’s Norouz message:

Tags: iran, mossadeq, nowrooz

AIG – Sinking Money in a Hole

March 17, 2009 · Posted in General Economics · 1 Comment

It’s time for our dear politicians to act surprised again. It’s time for Congress again to complain about the results of false policies that they themselves recklessly approved, against all warnings. It’s time again for Ben Bernanke to fire off mindless blather, platitudes and predictions that will, as always and without exception, turn out to be abysmally false.

The AP has a shocking surprise for us, Taxpayers unlikely to be fully repaid in AIG mess:

As the cost of the rescue swells, experts says it’s becoming harder to envision a scenario in which the government could recoup its full investment. Even though the AIG payouts to major banks have angered critics of the bailout, it might be legally impossible to claw back any of the billions already doled out.

Of course the taxpayer won’t get any of this money back. Is there a living creature with more than one brain cell that seriously expected the taxpayer would ever see this money come back? Of course it will be legally impossible to get the billions handed out back in any way. Congress and the Fed shouldn’t have been so stupid to throw it at them in the first place.

The government agreed to uphold those contracts when it seized control of American International Group in September. It argued that failing to repay the debts of the globally interconnected company could cause catastrophic losses at big international banks, potentially toppling the financial system.

…and the problem with that is what exactly? Toppling the financial systen? Does that mean the people who were instrumental to the credit expansion and the ensuing credit crisis would have gone out of business and we wouldn’t have to deal with their incompetence, greed, irresponsibility, and arrogance? Great! Anyone who has a problem with that should speak out and explain precisely why that would be such a terrible thing to happen. Especially he should explain why it is, on the flip side, good when instead the taxpayer who earned money with honest and productive work is milked to the Nth degree and driven into bankruptcy.

Scrutiny of AIG’s dealings with its trading partners comes after revelations over the weekend that the insurer planned to pay out tens of millions in executive bonuses. President Barack Obama on Monday accused AIG of “recklessness and greed.” He pledged to try to block the bonuses, which AIG insisted it’s contractually obligated to pay.

Mr. Obama, how about we pursue a policy of change? How about we no longer announce that we will react when the damage is already done. How about we proactively prevent disasters from happening? How about we listen to the people who advised us not to put the taxpayer on the hook for $170 billion for an organization whose market value is $2 billion? How about we realize that there is a reason why these organizations are not performing, why they are on the brink of bankruptcy? It is because they pursue the profession of wasting money. When we subsidize this behavior, we will get more of it. How much longer do we want to subsidize this bahavior?

Later, White House spokesman Robert Gibbs said the administration would modify the terms of a pending $30 billion bailout installment for AIG to at least recoup the $165 million the bonuses represent. That wouldn’t rescind the bonuses, just require AIG to account for them differently.

How retarded is this government? We hear from our President how outraged he is and at the same time his press secretary calmly announces that $165 million need to be accounted for in a slightly different manner, and then we’ll give them another $30 billion. Disgusting.

Asked if he’d favor trying to see if those AIG contracts could be broken so the government could recover some of those payouts, Rep. Barney Frank, chairman of the House Financial Services Committee, stopped short of endorsing the idea. But he said “that’s something that has to be examined.”

“I would want to know the consequences of not paying those debts,” Frank, D-Mass., told The Associated Press.

There is definitely something that needs to be examined. And that is Rep. Barney Frank’s head. This guy has been wrong on every single thing he said. He has been the strongest supporter of all bailouts and spending boondoggles that were brought before Congress. His dishonesty and hippocrisy are astounding.

Federal Reserve Chairman Ben Bernanke, defending the $30 billion lifeline the government provided to AIG, said earlier this month that the government may eventually be able to “recover most or all” of the taxpayers’ investments.

*Yawn* *Sigh* No, Mr. Bernanke. The government will not be able to recover any of the taxpayers’ investments. You know that or you are the biggest idiot to ever head the Federal Reserve. Your statement is wrong, just as all your previous statements have been. Please, do us all a favor and shut the hell up.

Some words of wisdom in closing:

But Mark Williams, a former Fed examiner and finance professor at Boston University, said the AIG wind-down inevitably will cost taxpayers money. And he thinks it will take much more money — perhaps an additional $200 billion — to finish winding down AIG’s financial dealings so its core businesses can be sold off.

“No longer can we call it an investment,” he said. “We just have to call it what it is — and that’s sinking money in a hole.”

Tags: aig, bailout, bailouts, tarp