Fannie Mae Receives Another $8.5 Billion Bailout – Promises “No End in Sight”
After Freddie, it’s now Fannie’s move to loot the taxpayer once more:
Fannie Mae has again asked taxpayers for more money — this time $8.4 billion — after reporting another steep loss for the first quarter. The taxpayer bill for rescuing Fannie and its sibling Freddie Mac has grown to $145 billion — and the final tally could be much higher.
The rescue of Fannie and Freddie is turning out to be one of the most expensive aftereffects of the financial meltdown, and Fannie Mae’s first-quarter financial report on Monday made clear that there is no end in sight.
“The losses are not going to stop” soon, said Anthony Sanders, a finance professor at George Mason University, who warns that the housing market is likely to turn sharply downward again later this year.
Late last year, the Obama administration pledged to cover unlimited losses through 2012 for Fannie and Freddie, lifting an earlier cap of $400 billion. And with the housing market still on shaky ground, Obama administration officials say it is still too early to draft any proposals to reform the two companies or the broader housing finance system.
Republicans, on the other hand, argue the sweeping financial overhaul currently before Congress is incomplete without a plan for Fannie and Freddie. They propose amending the legislation to transform Fannie and Freddie into private companies with no government subsidies, or shut them down completely
… it’s always too early for “change”, isn’t it? :)
EU Launches Frantic Bazooka – Euro Gives Up Early Gains
Europe Pulls Out Bazooka Part II in 3D
Since Euro countries are grappling with deficits, they are vowing to spend more money to fight the consequences of deficits, EU Crafts $962 Billion Show of Force to Halt Crisis:
European policy makers unveiled an unprecedented loan package worth almost $1 trillion and a program of bond purchases to stop a sovereign-debt crisis that threatened to shatter confidence in the euro. Stocks surged around the world, the euro strengthened and commodities rallied.
Jolted by last week’s slide in the currency and soaring bond yields in Portugal and Spain, European Union finance chiefs met in a 14-hour session in Brussels overnight. The 16 euro nations agreed in a statement to offer as much as 750 billion euros ($962 billion), including International Monetary Fund backing, to countries facing instability and the European Central Bank said it will buy government and private debt.
The rescue package for Europe’s sovereign debtors comes little more than a year after the waning of the last crisis, caused by the U.S. mortgage-market collapse, which wreaked $1.8 trillion of global credit losses and writedowns. Under U.S. and Asian pressure to stabilize markets, Europe’s governments bet their show of force would prevent a sovereign-debt collapse and muffle speculation the 11-year-old euro might break apart.
“A very thick line has been drawn in the sand,” said Andrew Bosomworth, Munich-based head of portfolio management at Pacific Investment Management Co. and a former ECB official. “This is all in. What more could they have done?”
A 110 billion-euro bailout package for Greece approved last week by the EU and IMF failed to reassure investors, prompting yesterday’s renewed bid to bolster the euro.
How to Pay
“It might temporarily calm nerves but questions will come back later on how they will pay for this package when all of them need fiscal consolidation,” said Venkatraman Anantha- Nageswaran, who helps manage about $140 billion in assets as global chief investment officer at Bank Julius Baer & Co. in Singapore.
The MSCI World Index climbed 2.6 percent to 1,128 at 12:15 p.m. in Brussels. Standard & Poor’s 500 Index futures rallied 4.4 percent. The euro appreciated 2 percent to $1.30. Crude-oil futures gained 3.4 percent.
“The message has gotten through: the euro zone will defend its money,” French Finance Minister Christine Lagarde told reporters in Brussels early today after markets punished inaction last week.
ECB policy makers said they will counter “severe tensions” in “certain” markets by purchasing government and private debt, and the bank restarted a dollar-swap line with the Federal Reserve.
‘Overwhelming Force’
“This truly is overwhelming force, and should be more than sufficient to stabilize markets in the near term, prevent panic and contain the risk of contagion,” Marco Annunziata, chief economist at UniCredit Group in London, said in an e-mailed note. “This is Shock and Awe, Part II and in 3-D.”
…
Merkel’s Meeting
As Merkel’s cabinet held a late-night meeting in Berlin on the euro rescue, her party unexpectedly lost control of Germany’s most populous state in a regional election, potentially costing her a majority in the upper house of the federal parliament.
Goaded by Germany, the ministers made a fresh commitment to closer monitoring of government finances and more rigorous enforcement of the deficit-limitation rules.
The vow to push budget shortfalls below the euro’s 3 percent limit echoes promises that have been regularly broken ever since governments in 1999 set a three-year deadline for achieving balanced budgets. The euro region’s overall deficit is forecast at 6.6 percent of gross domestic product in 2010 and 6.1 percent in 2011.
Can you imagine? Governments that have regularly broken commitments to cut deficits? Unthinkable!
One thing’s for sure, as I said over 1 year ago:
The 3% ceiling won’t matter anymore from hereon. Consider the European stability treaty dead. One member state after another will violate the requirements. The fact that a bailout of some Euro states by others is discussed, just shows how torn this European Union really is, how severe its imbalances are. With discrepancies like these, it is completely unfeasible to maintain a currency union. The Euro will keep taking its beating for it.
The Euro
What are foreign exchange markets saying? Here’s the Euro today:
It rallied up as high as $1.31 on the announcement and has given up almost all those gains within a few hours already. This is volatility galore on the FX market!
This may be a result of frantic intervention on the part of the US, as the Federal Reserve opens credit line to Europe:
The Federal Reserve late Sunday opened a program to ship U.S. dollars to Europe in a move to head off a broader financial crisis on the continent.
Other central banks, including the Bank of Canada, the Bank of England, the European Central Bank, the Swiss National Bank and the Bank of Japan also are involved in the dollar swap effort.
The move comes after the European Union and International Monetary Fund pledged a nearly $1 trillion defense package for the embattled euro, hoping to calm jittery markets and halt attacks on the eurozone’s weakest members. The ECB also jumped into the bond market Sunday night, saying it is ready to buy eurozone bonds to shore up liquidity in “dysfunctional” markets.
The Fed’s action reopens a program put in place during the 2008 global financial crisis under which dollars are shipped overseas through the foreign central banks. In turn, these central banks can lend the dollars out to banks in their home countries that are in need of dollar funding to prevent the European crisis from spreading further.
The Fed said action is being taken “in response to the reemergence of strains in U.S. dollar short-term funding markets in Europe,” and to prevent the spread of that strain to other markets and financial centers.
A so-called “swap” line with the Bank of Canada provides up to $30 billion. Figures weren’t provided for the other central banks. The arrangements are authorized through January 2011.
The debt crisis first erupted in Greece. Fears that it could spread to Spain, Portugal and other eurozone countries. The crisis has pushed up demand for the U.S. dollar and has sharply weakened the value of the euro, the currency used by 16 European countries. Eurozone ministers and the IMF this weekend approved a $140 billion rescue package of loans to Greece for the next three years to keep it from imploding.
The Fed had wound down these crisis-era programs with other central banks in February, along with other emergency programs to get lending flowing more freely again and return stability to financial markets. At that time, financial strains in the United States were easing, and the Fed began to take steps to move policy closer to normal.
It also had begun to lay out a plan to reel in the unprecedented stimulus money pumped out during the crisis. The Fed’s balance sheet ballooned to $2.3 trillion, more than double where it stood before the crisis struck. The program reopened on Sunday will expand the Fed’s balance sheet, economists say. However, the program poses little credit risk to the Fed because the arrangements are with other central banks, they added.
It is doubtful whether these currency swaps have ever accomplished anything but a very very short term relief.
We hear European bureaucrats rail against evil speculators who are daring to question the stability of the system. This is all repetitive nonsense which we can shrug off with a smile. I have said before that a truly meaningful reform of capital markets would require that governments remove themselves from the equation, rather than becoming the only factor in that equation:
what needs to happen is to bring down what has brought about the financial crisis in the first place.
Who has created all the excess fiat money that flowed into the system to blow up price bubbles? The Federal Reserve Bank – so just close it down already!
Who has created all the excess credit that blew up the bubble? The fractional reserve banks – so just end the system of fractional reserve banking already!
Who has granted oligopoly status to the rating agencies who one after another failed to assess credit risk appropriately? The SEC – so end the credit rating cartel already!
In fact who has taken away oversight from the stock exchange companies to try and oversee all stock exchanges in the country, missing one giant fraud after another? Which organization was close to Making Bernie Madoff their chairman?? The SEC – so get rid of it already!
Even after some of the worst excesses of subprime lending, who proudly remains the sole subprime lender in the country? The government owned banks! – So close them down already!
Who has been propping up financial markets in secret over decades with taxpayer money, creating malinvestments and false incentives left and right? The mighty President’s Working Group on Financial Markets! – So get rid of it already!!
What is it that made the common man put so much money into the stock market? It comes to a large degree from the incentive through tax savings for retirement accounts. If the taxes weren’t there in the first place, surely people would think twice about transferring their hard earned and saved money over to Wall St.
On top of that a policy manipulating and suppressing interest rates makes it completely unattractive to put money into savings accounts, and encourages people to be foolish. – So again, stop meddling with the credit markets, get rid of the central bank and with it would go all fractional reserve lending.
Why do you think it is so hard for honest small businesses to obtain funding in a flexible and straightforward manner? Why does it feel to most people like they are secluded from the majority of the action while Wall St. thrives? It is because every single government policy aiming at financial regulation has been designed to herd money into the stock market and lock it up in there for the kids to play with.
Which institution, out of all, is the least capable to be responsible about its finances, stay out of debt, live within its means? … it is of course the government itself.
Folks, wake up to reality, leave fantasy island. Come to your senses and work toward closing down that institution which is the root cause of all your problems: Close down the government and all the things I pointed out above and many more evils would automatically go with it.
So long as people don’t make these simple connections, they need not be surprised about the same problems popping up again and again, with the same short sighted responses protracting the problems again and again, choking our productive capacity until the system comes to a painful halt.
Freddie Mac Asks for Another $10 Billion Bailout
Since whatever Freddie Mac is doing is so essential to all our lives they are asking for another $10 billion in extorted money:
Troubled US government-backed mortgage firm Freddie Mac on Wednesday asked for an additional 10.6 billion dollars from the Treasury Department to cover losses.
Announcing a 6.7 billion dollar loss in the first quarter, Freddie Mac said it would need the new funding by June 30 this year.
The Washington-based company has already received more than 50 billion dollars in taxpayers cash to cover losses from toxic assets.
It also warned that further demands would be on the way.
“Freddie Mac expects to request additional draws,” it said in a statement.
“The size and timing of such draws will be determined by a variety of factors that could adversely affect the company’s net worth.”
Yeah … so I’ll opt out of that program if you don’t mind? Yeap, I’d like to not contribute any money to this corrupt company out of my pocket. I’d prefer to keep at least that portion.
That’s right, I’m basically opting out of this one, the one with the fat cat executives with political connections getting stupidly rich for nothing I ever asked for … yea exactly that one. I’m checking “no” on it. Hope you don’t mind?
Oh, sorry, I forgot that I have no choice in the matter, forgot you’ll throw me into a cell if I disagree. Nevermind …
German Parliament Approves Bailout for Greece
As a mere formality the German Bundestag has approved the bailout for Greece, and with that yet another aid package for German banks:
German lawmakers on Friday approved the country’s share of the rescue package for debt-laden Greece after a boisterous debate in which the finance minister told them they had no alternative to the unpopular measure, The Associated Press reported.
The lower house of Parliament voted 390-72, with 139 abstentions, to authorize granting as much as 22.4 billion euros ($28.6 billion) in credit over three years. That is part of a wider 110 billion euro package backed by eurozone members and the International Monetary Fund.
Chancellor Angela Merkel’s center-right governing coalition was joined by one of the three opposition parties in approving the aid. Germans dislike the idea of rescuing another country from its financial irresponsibility.
The upper house of parliament, which represents Germany’s 16 states where Merkel’s government also has a majority, was expected to add its approval later Friday.
”We have to make this decision and we have no better alternative,” Finance Minister Wolfgang Schaeuble told lawmakers ahead of the vote. ”Any other alternative would be much more expensive for the Germans, would be much more dangerous, would carry much bigger risks.”
Schaeuble said central bankers and the IMF agree ”it would be disastrous to risk … a member of the European currency union, Greece, now becoming insolvent.”
”This is about defending the common European currency as a whole, and with it we are defending the European project,” Schaeuble said.
”The situation is very serious and no one can make out that we are already out of the woods with today’s decision,” Foreign Minister Guido Westerwelle said. ”What is important now is that we must extinguish the fire so no brush fire spreads in Europe, and we must at the same time fight the cause of the fire.”
Geeez, could these guys at least have the courtesy to come up with some different nonsense than the one they have been feeding us over the past years? All this pathetic and fuzzy nonsense about defending the currency as a whole and how doing nothing is far worse than throwing more money at the problem, blah blah blah … come on people, we’ve heard it before and it’s simply embarrassing! :)
Bailing out Greece is unpopular in Germany, which has Europe’s biggest economy. Merkel long took a tough line on aid, and opponents have accused her of dragging her heels ahead of a regional election this weekend.
Sigmar Gabriel, the leader of the biggest opposition party, charged that Merkel had ”destroyed trust in the credibility of Germany’s European policy.”
Gabriel’s Social Democrats abstained. They had hoped to couple the vote with a call for a tax on financial market transactions — which Schaeuble described as unrealistic, given a lack of international support.
The Greens, also in opposition, voted in favor. But the hard-left Left Party objected to the rescue package on the grounds it would make things worse for Greece.
Left Party lawmaker Gesine Loetzsch described the austerity package to be implemented in Greece as ”brutal” and accused German leaders of doing too little to control markets.
”Speculators are Taliban in pinstripes, and people in our country must be protected from these Taliban,” Ms. Loetzsch said — a remark that drew a rebuke from speaker Norbert Lammert.
… you know how bad things are when the only ones who are remotely making sense are the commies.
Greek Bailout – Who Is Really Getting Rescued?
As events unravel in Europe, one might want to ask himself why nobody suggested that those who loaned money to Greece simply work out debt settlements on their own, and take responsibility for the financial risk they took with their loans.
Of course, in a world where individual accountability, free markets, and consistency are a such completely weird and laughable ideas to people, such a thing is unthinkable! :)
Who is it that ultimately benefits from this and all future Greek rescue packages? This post has some helpful information:
German financial institutions may have the third-largest exposure to Greece but are set to ride out the storm as long as the country’s fiscal crisis does not spread outside its borders, analysts said.
Lenders to public-sector borrowers — such as Commerzbank unit Eurohypo and Hypo Real Estate — as well as some landesbanks have billions of euros in exposure.
German creditors have a combined $43 billion outstanding with Greek borrowers, behind only French and Swiss lenders with $75 billion and $64 billion, respectively, data from the Bank for International Settlements (BIS) show.
Greece owes $302 billion to all foreign lenders, the most recent figures from the Bank of International Settlements (BIS) show — half the debt Wall Street investment bank Lehman Brothers had when it collapsed, which triggered massive writedowns as the value of banks’ assets plummeted.
Germans and other European citizens who will be footing this bill should be aware of this: Ultimately the rescue for Greece is nothing but another free ride for the banks who have already been bailed out on behalf of the hapless taxpayers.
The article also points out something else:
Greece’s economy is smaller than that in the southern German state of Bavaria and its banking system does not play a large international role. German exposure to Spain, in contrast, is six times bigger than lending to Greek borrowers.
“If the Spaniards get into trouble then the fallout from the Lehmann collapse will look like peanuts,” said one analyst who asked not to be named.
Aaah yes … the next disaster to look forward to :)
CIT Files For Bankruptcy; Taxpayers Lose $2.3 Billion
Three months ago, the CIT Group barely averted what it considered to be a ruinous bankruptcy filing that would likely have put the 101-year-old lender out of business.
On Sunday afternoon, the company filed for Chapter 11 — but under a so-called prepackaged bankruptcy plan that will enable it to emerge from court protection by the end of the year, under the control of its debtholders. (Read the filing after the jump.)
The filing, made in a federal court in Manhattan, will still mean much pain for many parties, beginning with taxpayers. CIT received $2.3 billion in government aid last year, a bailout that came in the form of preferred stock. That will almost certainly be wiped out in the bankruptcy process, the first realized loss in the government’s rescue of the financial system.
While several firms that have received bailout money, including Goldman Sachs and Morgan Stanley, have repaid the government, others — including the American International Group, General Motors and Chrysler — are expected to lead to losses.
CIT’s filing will test whether a financial company can survive the Chapter 11 process. Bankruptcy has long been considered a death knell for lenders, whose very existence depends on the confidence of its creditors and customers. The company’s struggles have been watched with interest and trepidation by analysts and the thousands of small and midsize businesses that borrow from CIT.
CIT was the nation’s largest provider of what is known as factoring, a type of lending used heavily by retailers. The company has spent months trying to reassure its clients that it will remain open for business as stores ramp up for the holiday season. Relatively few other companies serve as factors, and among them are other embattled lenders like GMAC.
The filing on Sunday capped months of efforts by CIT to stay alive. After being denied another bailout by the federal government, the company bargained with its creditors over a restructuring plan that would keep it operating and cut $10 billion in unsecured debt.
“The decision to proceed with our plan of reorganization will allow CIT to continue to provide funding to our small business and middle market customers, two sectors that remain vitally important to the U.S. economy,” Jeffrey M. Peek, CIT’s outgoing chairman and chief executive, said in a statement. “This market-based solution allows CIT to enter into the reorganization process well-prepared and positioned for a swift emergence.”
While CIT had hoped to stay out of bankruptcy court through a bond exchange offer, that plan failed to win enough support from bondholders, the company said in a statement.
With $71 billion in assets and nearly $65 billion in liabilities, CIT is among the largest corporate bankruptcies on record, though it is dwarfed by the likes of Lehman Brothers and Washington Mutual. The company said in its bankruptcy petition that it had $800 million in bonds maturing from Sunday through Tuesday.
CIT said that only its holding company would file for bankruptcy, and that most of its important operating subsidiaries, including its Utah bank, would continue to operate normally.
Mr. Peek, the architect of its push to grow beyond its sleepy industrial-lending roots into a major new financial player, will step down by the end of the year. People briefed on the matter said the search for his replacement was continuing and ultimately remained up to the company’s new board of directors.
Bondholders will receive about 70 cents on the dollar through the prepackaged bankruptcy, though the company warned that investors could receive as little as 6 cents on the dollar in the alternative, a free-fall bankruptcy that lacked a preapproved reorganization plan.
Last month, CIT unveiled its debt-exchange offer, which would have let bondholders tender their holdings for new, longer-dated bonds and preferred stock. But it also began soliciting votes for the prepackaged bankruptcy option. Under federal bankruptcy law, approval of such a plan requires the support of more than 51 percent of the number of creditors voting and more than two-thirds of the dollar value of those bonds.
CIT said in a statement that holders of about 85 percent of its $30 billion in bond debt participated in the voting. Those investors voted almost unanimously to support the prepackaged bankruptcy plan.
Last week, the company secured several important agreements to aid its prepackaged bankruptcy plan. It obtained a $4.5 billion loan from several investors, including bondholders who lent it $3 billion in the summer. It also reached an accord with Goldman Sachs that would preserve a $2.13 billion loan even through bankruptcy protection, while paying only a portion of a $1 billion termination fee.
CIT also ended a fight with the investor Carl Icahn, who had offered to pay bondholders 60 cents on the dollar if they rejected the company’s prepackaged bankruptcy offering. Mr. Icahn instead offered a $1 billion loan, although people close to CIT said the company did not expect to use the financing.
The company will be represented in bankruptcy by the investment bank Evercore Partners, the law firm Skadden, Arps, Slate, Meagher & Flom and the turnaround consulting firm FTI Consulting.
The most important piece of information to get out of this: This is the first honest and outright example of how TARP taxpayer money is beginning to evaporate.
AIG – Sinking Money in a Hole
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.”
Bailout Fatigue is Setting In
After about $8.4 trillion pledged so far for numerous Auction Term Facilities, Troubled Asset Relief Programs, bridge loans, to failing banks and businesses, one has to wonder how many more failures the government wants us to support.
House Democrats Barney Frank and Nancy Pelosi have clearly lost their minds and their last shred of common sense over the past months. They can’t do any more than repeat the same utter falsehoods, lies, and scams. “Bankruptcy is not an option” (…because I say so). “Letting them fail would lead to an epic disaster” (…so please, come on, give us more of your money!!).
After each taxpayer has now committed about $56,000 one has to sit back for a moment and ask “Has this been working so far? How much more money should we take from the people? How many more useless projects should we support with it? How much longer should we prolong the agony?”
Among reasonable people in congress one can sense the bailout fatigue. The car bailout of the big 3 in Detroit exemplifies this brilliantly: First it was going to cost $25 billion. Then it went up to $34 billion. Then one guy testified that over $100 billion might be needed. After it became obvious that House Republicans wouldn’t play ball the last desperate moves were made to tap into an existing funding package of $15 billion which was supposed to support clean energy cars. Then $1 billion was set aside for environmental programs. Now the scammers were hoping to at least take the remaining $14 billion.
One hour ago even this bill was voted down. Thanks, Senate Republicans for getting it right this time. That wasn’t that hard, now was it? You could have done this much earlier. It could have saved us roughly $8 trillion.
I don’t doubt for a second that Nancy Pelosi, Hank Paulson, Harry Reid, and George Bush are already convening in order to figure out a way how to force the scam down the taxpayer’s throat this time.
Xmas gifts for Wachovia execs
As the Chronicle’s James Temple reported earlier this month, it’s sayonara for most of Wachovia’s top executives when Wells Fargo’s takeover is complete, around Christmas time. He also noted that golden parachutes will be billowing all over Charlotte, N.C., where Wachovia is based.
Now we have hard numbers. According to an SEC filing, the failing bank’s top 10 executives will be eligible for a total of $98.1 million in severance pay. At last report, two of those executives are moving over to Wells, so the actual tab will be a little smaller. CEO Bob Steel and chairman Lanty Smith aren’t eligible for severance, but not to worry. They get to reap $2.5 million in stock based rewards as a going away present…
Wells Fargo already received $25 billion from the taxpayers under the Federal Reserve’s TARP program, part of the $700 billion bailout, approved by our heroic representatives in Congress. They, along with other banks, will have enough money available for many more of these games.
In fact, since they are “too big to fail”, they will most likely receive much more. And rightfully so. Now is really the time for the tax paying workers in this country to cut back and give those ailing executives a well deserved break for a job well done…
…Wachovia lost $33 billion in the last two quarters.
Dear Senator/Congressman, you are making a huge mistake…
…if you let this $700 billion bailout bill pass.
Remember how you were going to stand up to this administration?
Remember how you said “No blank check for this President!”?
What has happened to that?
The Paulsons and Bernankes in this scam are nothing but the Cheneys and Wolfowitzes of the Iraq war.
Remember how congressmen/-women and senators regret their votes on the Iraq bill? You must have thought to yourself back then “How could they??”. Now you are about to do the same thing!!
These people don’t have the solution to the financial crisis. They have been wrong on everything they said. Remember how Paulson said a few weeks ago the banking system is sound? Remember Bush’s endless reassurances that the economy is strong and stable?
Why listen to these people?
Why not sit back for a second and listen to the people who have been talking about this problem for years? How about listening to the people who have been right on everything? The people who saw this coming and who have again and again presented logical solutions. In particular I would like you to take a look at what these two people have been talking about for years, even decades:
- Ron Paul (http://www.campaignforliberty.com/)
- Mike Shedlock (http://globaleconomicanalysis.blogspot.com/)
You have to understand: This bailout plan is more of the same. The cause for the credit crisis is that the federal reserve and government entities like Fannie Mae and Freddie Mac have been buying up mortgage backed securities with taxpayer money and/or printed money. It has been fully explained by the theory of credit expansion. This bill suggests more of that. It will not fix the situation, it will aggravate it!
I hope you take at least five minutes to seriously think about what I just wrote.
I am furious. I cannot believe what is going on. Especially since we have had this kind of rush scenario again and again. And every time we asked ourselves afterwards: “How could they approve that?”
Sincerely,
Name
Phone Number
(This was first posted on 09/25/2008)
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