Protester: "They are giving our money to the banks to lend back to us with interest."

[moondust]

Seen on CNN this morning.

Is that the deal?

[yurbud]

1. yes. My guess is that once things start to settle down, Obama will use that large favor as

leverage when it comes time to re-regulate them.

[nichomachus]

22. And my guess is that my car will run on tap water, that pigs will fly and

that peace will settle all over the earth.

[yurbud]

28. I bet the wings on those pigs are tasty

[LooseWilly]

90. Mmm... hot pig wings... (n/t)

[crimsonblue]

29. you're not actually that far off...

about your car running on tap water, that is. We are exceedingly close to figuring out cold fusion and once we can fully explain the process and find a way to harness it, you will be literally able to run your car on tap water. Now, pigs flying is a matter of artifical selection enhanced via stem cell research. It is just a matter of genetically engineering bird wing stem cells to work in a pig, grafting them onto the pig, and then utilizing artificial selection to choose the pigs with the best developed wings. It would probably take 50 to 75 years to get it to the point where pigs could fly, because we would need to go through thousands of generations of pigs. As for peace on earth, it ain't never going to happen. Humans are social animals. As a consequence, conflict is a common and necessary social mechanism that we will never get rid of.

[nichomachus]

36. And all of that will come about

approximately 50 years before the Democratic Wing of the Corporate Party "reforms" the financial system.

[debunkthelies]

79. It is already

being done, running cars on tap water, it's just that the industrial giants won't let it happen on a massive scale.
Until they control all of the water, then we'll see this wonderful 'new' invention, but the cost of water will be like gas.:rofl: :banghead:

[Omnibus]

111. You've missed a key component here.

Cold fusion is a myth. But they HAVE synthesized genes for bacteria that generate a negative gravitational pull, made from synthetic nucleic acids. They're unsure how it works, but postulate it involves an extremely esoteric application of dark energy.

Once they splice those genes selectively into mitochondria, and implant those mitochondria into pigs (the chosen test animal), pigs will indeed fly, as their muscles will become antigravity glands. Those pigs won't be able to control the process, and won't be able to come down; they'll either be shot down, or will fall from the sky when their vitality ebbs. There corpses will be used by other nations to reverse-engineer antigravity.

Later generations of pigs WILL have controllable flight, from handy implants thanks to the DoD. Shortly thereafter, over 200 people will have their OWN antigravitational mitochondrioids, and will be the dawn of a new era in human evolution.

Oh, and antigravity = free energy. But it's not REALLY free, since every application of antigravity slows down the universe's expansion.

Also, these facts prove that whatever I'm spouting is right.

[crimsonblue]

136. cold fusion isn't a myth...

it just isn't scientifically produceable or observable, yet. It is a postulate, if anything. Also, anti-gravity cannot exist but for the briefiest of nano-seconds before it is neutralized by its opposite, gravity. However, if you view gravity not as a space-time force, but rather a particle wave force (as I am inclined to do when I am feeling particularly pernitious) it is possible to control the gravitons (as yet, theoretical, but once the LHC is up and running, hopefully will be empirically proven) by means of a HIggs Boson manipulator. You wouldn't be actually manipulating gravity, but rather you would be creating anti-matter, which would be repulsed from other matter. This too, has the small problem of probable neutralization when interacting with regular matter. However, you could get around this problem by creating a electro-magnetic field around the pig that would prevent all other matter from interacting with the pig. But then again, if no other matter can interact with the pig, how would it be repulsed from gravity. But I digress. Anyhow, if you can manipulate the field of gravitons (or the space-time field of gravity, if you prefer) by means of redirecting it around the pig, then the pig would have downward attractive force to keep it grounded. However, this couldn't really be considered flying, as the pig would be more appropriately floating in free space. In summation, it is probably an argument of semantics to say that pigs can fly (unless you introduce the artificial selection for wings concept I introduced earlier) when in reality they would be floating in free space.

[liberation]

126. .... actually

Fusion does not "run" on tap water, it may generate tap water as a byproduct.

Which is different.

[crimsonblue]

137. my bad, I should have stated heavy water.

obviously, ordinary tap water does not have enough free hydrogen to be absorbed by palladium. However, the procuring of heavy water would be much easier than, say, the drilling for oil or mining of nuclear materials.

[GiveMeFreedom]

37. Sure it will. All you need to do is sprinkle a little

on the problem and all will be well...........

[northofdenali]

64. And Fairbanks will have Breakup before April 1st.

As in, not a chance in hell.

[KitchenWitch]

65. Don't forget the penguins that will emerge flying out of my butt.

[tkmorris]

75. No WAY that happens

Penguins can't fly.

[SammyWinstonJack]

125. .

:spray:

[Marr]

86. Huh?

What do you mean? I'm honestly curious.

Are you suggesting that the banking industry will feel an emotional obligation to the Obama Administration, and so accept regulation without a fight? They're corporations. They don't have feelings-- just balance sheets.

You're also making the assumption that the Obama Administration intends to regulate the banks in some meaningful way. I'm not at all convinced of that, personally.

[Brucie Kibbutz]

88. Is that all we had to do so they would spare us all this trouble?

Hell, we should have just given them all our money years ago so they would "let us" regulate them.

If Obama is doing this "as a favor" to these crooks, he deserves to be in prison with the rest of them.

[Eric J in MN]

132. Obama's regulatory proposals will accomplish nothing.

They should ban credit-default swaps.

They should break up any corporation which is supposedly too-big-to-fail.

Instead, Obama wants to keep the same rotten system of huge corporations which simultaneously own savings banks, investment banks, and insurance companies and do credit default swaps, and just have more oversight.

[Critters2]

2. Saw that, too. And really, isn't it?

The bailouts give money to banks to "loosen the credit market"--to get banks to make loans...which banks will do, but being for profit businesses, they loan that money (which they got from taxpayers) at interest. So, yeah, that pretty much sums it up.

[Vanje]

3. I think that might be the deal

Think how badly that sucks for the tax-payer who is close to getting foreclosed on .
He has to buy his house twice!

Fisrt his taxes bail out his creditors, then he STILL has to pay his bloated mortgage.

[leftstreet]

4. And isn't the money 'we're' giving the banks being borrowed?

So 'we' will be paying interest several times over.

It's a WIN for the Ruling Class!

[dysfunctional press]

9. yes- but we're not "giving" it to the banks either- it's a loan to them, as well...

which they'll be paying back with interest.

[Winterblues]

15. Right... And I have some property in Florida I'd sell real cheap.

If you believe that then you might be in for a disappointment.

[Statistical]

26. How cheap?

The money loaned under TARP is just that a loan. Technically it is prefered stock which can be converted to common or pays out a dvidend of 4%. If not bought back (repaid) within 4 years the interest rate increases to 6.5%.

Honestly you thought it was free money?
Don't you think if that was the case the bank stocks would have skyrocketed?


I am not sure which is more foolish
1)that you thought it was free money
2)that given your assumption it wasn't free money you didn't buy up all the bank stocks.

Shareholder value would be instantly increased and stock price would rise to reflect that.
However most banks stocks went DOWN after getting TARP funds.
Banks that took TARP funds went DOWN more than the average.

Now some banks will fail and won't every pay back the govt.
The relatively low interest rate combined w/ risk of default and ability for banks to repay at anytime makes it a poor investment for taxpayers but it is still a loan.

[Winterblues]

59. Every single Representative and Senator has stated they do not believe

we will get back even a third of our output and that number they said was generous. I am glad you know more than they do..

[Statistical]

60. That is different than it not being a loan. Nice strawman.

I loan you $100 at 5% interest then you declare bankruptcy. Guess what I loss $100.

Was it a loan? Yes
Was there interest? Yes

Not getting money back is called RISK. If there was no risk (or minimal risk & good reward) we wouldn't need TARP we would just need some rich investors (or other banks) to lend the money.

A lot of that money won't be paid back because some of the banks will fail ANYWAYS.

The banks that survive will pay it back and likely it will be a race to see which bank can pay it back first (and gain a competitive advantage).

[JDPriestly]

85. What competitive advantage would a bank get from paying the money back early.

It is borrowed at a low rate. There are no penalties for paying it back slowly.

[Marr]

87. edit

[Statistical]

89. 5% is not a good rate for major bank to borrow at.

1)Cost of loan
------------------------------
When you put money in checking account does bank pay you 5%? Hardly.
Even a high yield money market or CD is not that high.
When a bank issues preferred stock they usually have a dividend of 2.5% to maybe 4%

So competitively speaking 5% is a high "carrying cost".

Take two banks.
One is capitalized by TARP. Carrying cost of 5%.
One is capitalized by deposits with average yield of 1.5%.
The second bank can loan money for less and STILL make more.

2)Penalty
-------------------------------
After 5 years that rate jumps to an astounding 9%.
9% is so high as to be essentially non-competitive.
A bank holding a 9% note might as well look for BK protection or seeking someone to buy them.
They will simply not be able to compete with banks with a carrying cost of <1%.

3) Warrants
-------------------------------
Until prefered stock is recalled the banks have warrants out for common shares.
Treausry can excercise the warrants are require bank to issue common stock.
Now warrants are generally structured such that the common stock will need to rise 10%-15% before it makes sense for holder to excercise. Banks would prefer to pay off loan BEFORE their stock rises and Treausry excercises those warrants.

4) Compensation, other restrictions, and Congressional Control
-------------------------------------
Congress screwed up the TARP but moving forward we can expect some restrictions on compensation, lending requirements, board members, even CEO hiring/firing. Banks under restriction will be at a competitive disadvantage to those without restrictions.


Already banks are alerting shareholders to plans on repaying TARP
http://www.reuters.com/article/ousiv/idUSTRE52H3OD20090318
http://www.nytimes.com/2009/04/01/business/01bank.html
http://www.foxbusiness.com/story/markets/industries/finance/shore-bancshares-applies-repay-tarp-funds/
http://www.reuters.com/article/newsOne/idUSTRE52O2YI20090325
http://www.charlotteobserver.com/business/story/622532.html

Only on DU is a 5%/9% adjustable loan, with warrants against a portion of any networth increases, and restrictions on compensation/employment considered a "gift".

Many banks like Wells Fargo didn't even need the TARP. Treasury wanted ALL major banks to take funds so there wouldn't be a run on the "weak banks" that did.

A substantial portion of TARP will be repaid in 2009 and even more in 2010. All but the weakest, failing banks will have repaid the funds by 2011.

[dysfunctional press]

50. name a few government bailout loans that were never paid back...

i don't believe that i'm going to be disappointed- but i have no interest in buying any land in a shithole like florida.

[leftstreet]

20. LOL I hope somebody checked their Credit Scores n/t

[Fire1]

30. So many people 'forget' that little bit of information.

[Myrina]

63. The TARP funds were given at ZERO PERCENT.

How's that in our favor when they turn around and charge us - in some cases - up to 20% interest on our own friggin' money??

[Statistical]

66. No they weren't.

Approved financial institutions issued preferred stock in exchange for TARP funds.

http://www.treas.gov/press/releases/hp1207.htm

The senior preferred shares will qualify as Tier 1 capital and will rank senior to common stock and pari passu, which is at an equal level in the capital structure, with existing preferred shares, other than preferred shares which by their terms rank junior to any other existing preferred shares. The senior preferred shares will pay a cumulative dividend rate of 5 percent per annum for the first five years and will reset to a rate of 9 percent per annum after year five. The senior preferred shares will be non-voting, other than class voting rights on matters that could adversely affect the shares. The senior preferred shares will be callable at par after three years. Prior to the end of three years, the senior preferred may be redeemed with the proceeds from a qualifying equity offering of any Tier 1 perpetual preferred or common stock. Treasury may also transfer the senior preferred shares to a third party at any time. In conjunction with the purchase of senior preferred shares, Treasury will receive warrants to purchase common stock with an aggregate market price equal to 15 percent of the senior preferred investment. The exercise price on the warrants will be the market price of the participating institution's common stock at the time of issuance, calculated on a 20-trading day trailing average.

So the "cost" of TARP funds is:
5% APY for first five years
9% APY after that.
PLUS warrants allowing Treasury to purchase up to 15% face value issued in common stock at a price = 20day trailing average.

So interest is $12.5B annually.

Treasury also can buy up to $37.5B worth of common stock via warrants when stock price recovers (price of warrants were calculated near bottom) and instantly sell them on market for additional profit.

[northernlights]

106. if only they charged us

the same interest and terms as we're getting from them. As it is, we pay a gazzillion in interest to borrow the money that we loan to them at about 1% interest, which they then lend back to us at about 18% interest.

What is wrong with this picture? :puke:

[dysfunctional press]

118. your numbers are way off...

i won't even touch "gazzillion"...
but the current rate on mortgages is around 4.5%...it hasn't been anywhere near 18% in decades. and credit card interest rates only matter when you don't pay off the balance, anyway...but then it basically becomes legal loan-sharking.

i would hope that we at least get the return of some decent usury laws out of this.
even/especially if it means a lot more people with a lot fewer credit cards.

[nichomachus]

23. They're borrowing it from your kids and grandkids

to give to banks, so they can lend it to us at interest.

[Fire1]

32. Just imagine the compounded interest on those loans when

our kids and grand kids get it back!!

[nichomachus]

35. They don't "get it back" -- they "pay it back"

[Fire1]

38. To what aspect of the bailout are you referring? If you are

referring to the 'toxic assets,' these assets are undervalued and will regain their value when the market returns to 'normal.' Should that happen, we or our offspring will probably get this money back, though not as much had the assets been bought at market prices of these past eight years. If the market does not stabilize, THEN, we the taxpayer will be left holding a very big bag.

[nichomachus]

45. Normal? Bwahahahahaha. There is no "normal"

We've been living on Fantasy Island since Reagan sold us downriver.

The Fed is printing money as fast as the presses can run and lending it to the government at interest. Your kids will have to pay for that. In fact, they already are.

[Fire1]

54. Alrighty then. 'Whatever passes for normal.'

[Fire1]

33. Just imagine the compounded interest on those loans when

our kids and grand kids get it back!!

[Fire1]

34. Just imagine the compounded interest on those loans when

our kids and grand kids get it back!!

[Seldona]

108. More like the vulture class. nt

[hendo]

5. isn't the system grand? NT

[pnutbutr]

6. yes because

the banks had no money to lend and with no money to lend the fiat monetary system comes to a screeching halt. Uneducated protester protesting about something he doesn't understand.

[Raineyb]

8. The protester is right.

It is you who doesn't know what you're talking about.

[dysfunctional press]

10. the protester is wrong.

we aren't "giving" money to the banks- we're loaning it to them as well, and they'll be paying it back with interest.

[G_j]

14. splitting hairs

for all intents and purposes, from the average person's relationship to the "bailouts", it is a gift.

[dysfunctional press]

41. they're mistaken. it's not.

which is why all the 'outrage' is so utterly ignorant.

[Egnever]

48. Yay!

Was starting to think all the sane people left this place.

[phantom power]

17. I'm thinking...

that the opportunities for that money to disappear forever, without any payback, are legion.

[dysfunctional press]

42. which past government bailout loans were never paid back?

i'll hang up and wait for an answer...

[moondust]

52. See post 44.

[dysfunctional press]

53. and when has that happened in the past?

with a bailout loan?

that's not how it works.

[moondust]

58. You're foolish if you think today's Republicans wouldn't do that.

Calling it a Democrat mistake that never should have happened in the first place.

[dysfunctional press]

78. first off-

the banks will most likely have it paid back before republicans ever regain power...
and secondly- there's NO WAY they even they would risk what would be very well-deserved public backlash.

live and learn-
you'll get there.

[moondust]

44. A future Republican administration.

If the Republicans ever get control of the government again (and they might given a lot of short memories) I could see them making the payback disappear as part of another tax handout for fat cats.

[Statistical]

68. You think Obama will lose in 2012?

The interest rate if 5% for first 5 years then 9% penalty rate after that.

Obama wins in 2012 and loan goes into penalty phase in Oct 2012.

You honestly think Banks will be sitting on this debt paying out 9% penalty interest PER year for 4 more years.

That's 9% of $250 Billion.

Paying it out hoping a Republican wins in 2016 and gets control of Congress AND gets a fat cat loan relief through.

Or (I know it is a stretch so just bear with me).
Maybe just maybe the banks will pay it off prior to 9% penalty phase. Any bank stuck paying 9% interest on BILLIONS will be at a massive advantage to those who aren't. At best they get bought out, at worst they collapse.

So unless you think Obama loses in 2012 all off the TARP will have been paid back by then (or company went bankrupt anyways).

BoFA is already talking about paying it back by the end of the year (i.e 2009).

[readmoreoften]

18. Sure they will. Because if they don't we'll...what?

It's a gift. Please.

[dysfunctional press]

43. which past government bailout loans have never been paid back...?

it's not a gift- it's a loan. with interest.

learn how things work.

[truedelphi]

39. Can i mention a few things that are buried in the discussion & might have

Escaped your attention.

Because the Geithner crowd did not bother to liquidate those getting our money, the contracts these financial firms have in place must be enforced.

Thus we saw the AIG bonuses go to those who were promised them, regardless of the fact that half of those receiving the bonuses had caused the world's economic hardship..

But worse,much worse, and much more costly as it will be trillions not a billion or two, (than the bonuses to be paid out) are those contracts that call for the Credit Default Swaps to be paid first out of whatever monies any financial institution receives.

So instead of the money going into a bank (and/or AIG) and paying to re-inflate the value of the products (SIV's composed of home mortgages for instance) that money instead pays off the bets that were made that the mortgage bundles would be bad.

Whereas if the Credit Default Swaps were ignored until AFTER the money was used to re-inflate the value of the products, then much of that debt would go away. (You can't claim you deserve to be paid on the bet the mortgage bundle would be bad, if someone makes that bundle good.)

There are other loopholes just as insidious. So don't expect any loans from our government to these demons in the banking circles to be paid back any time soon.

There are very real reasons why Geithner has let this happen. Can you say "Close ties to Goldman Sachs," boys and girls?

[dysfunctional press]

47. i have absolutely no problem with the people getting bonuses that they are entitled to, either...

"regardless of the fact that half of those receiving the bonuses had caused the world's economic hardship.."

is that just speculation on your part, or do you have a link as to the actual number of bonuses that went to those in the financial products division that were working on credit default swaps?

seeing as there's not enough money in the world to pay off all the cds's- so it remains to be seen what will happen there.

BUT- i have no concerns about the bailout loans paid out thus far not being paid back. with interest.
if you want to lose sleep over it, and/or let it raise your blood-pressure...that's your prerogative.
i try not to let things that are completely out of my control get to me...:shrug:

[truedelphi]

55. I confess to not being that interested in

The bonus matter. At least not enough to research who got what and whatever.

But like you say, there ain't enough money the whole world to see to it that the Credit Default Swaps get paid off. Some economists were holding out hope that Goldman Sachs would be willing to settle for pennies on the dollar for its Credit Default Swaps. But now it has been made clear that that is not the case. They want 100 pennies on the dollar.

SO I guess that means that everything we give out goes into a deep dark hole?

I guess. And I am also getting to the point that I am not gonna lose sleep over it either. Since there is nothing I can do to make things right, I'll just bide my time until the mess unravels which ever way that may be.

[dysfunctional press]

56. "...At least not enough to research who got what and whatever."

and yet, you have no problem stating the following as "fact"...

"regardless of the fact that half of those receiving the bonuses had caused the world's economic hardship.".

[truedelphi]

57. The head of AIG, Liddy, has stated that

Half of AiG is just normal everyday insurance (and business matters) and half of AIG is the problem.

So is it that unfair to make the leap that half of the people getting bonuses would be working for the viable end of AIG, and half would be working in the more sinister divisions?

Again, I don't need to make a federal case out of this. For someone who is not losing sleep over something, why are you making this a federal case? I am not the problem with what is going on in our Wall Street-owned-and-bought- and-paid for government.

[notesdev]

120. It's a reasonable assumption

Consider how little good faith and truth is involved in this matter. If there weren't something to hide, they wouldn't be going to these lengths to hide it.

[truedelphi]

139. +1 n/t

[Statistical]

70. Why would banks sit on debt paying out penalty interest rates

http://www.treas.gov/press/releases/hp1207.htm

Banks pay 5% a year on prefered stock for first 5 years then.....
9% a year after that.

If hypothetically a bank didn't raise enough capital to pay this back in 5 years it would be cheaper to simply offer 5%, 6%, 7% money market accounts and/or CD to get deposits to pay it back.

No bank anywhere in the world is going to sit around w/ 9% preferred stock issued. Period.
Even 5% is insanely high. Dividend on most bank Preferreds are something like 2% - 3%.

[truedelphi]

101. It is my understanding that the government bought and paid for these shares and then

Left them in the possession of the banks or financial institutions.

So we get to pay all over again for them with the PPIP that was brought out last week.

[truedelphi]

103. Also get this - just placed on Greatest Page

Lawsuit: AIG Not Just Screwing Over Taxpayers Anymore
By Moe Tkacik - April 2, 2009, 2:02PM

AIG has allegedly stopped paying many of its bills in spite of its $180 billion in bailout cash, and a lawsuit filed against the firm by a Pennsylvania real estate developer managing 16,800 apartments owned by the global real estate arm paints a disturbing portrait of goings-on at the failed insurer that give emphatic new meaning to the term "zombie bank."

AIG and all these other financial scamsters already scammed us, what with their offering of SIV's, CDO's Credit Default Swaps etc. circa 2000 to 2008.

Now (or at least since October 2008) they are taking government Bailout monies while they can. Do you really think theSE FINANCIAL INSTITUTIONS care if they survive long enough to PAy BACK FUNDS OFFERED TO THEM?

It's sort of like asking me to be trusting and let the guy with the three card monte at a curbside tea table watch my purse while I jog around Central Park. you can worry about what they will do three Years from now. I imagine they will have bought up the Cayman Islands or Vanatua and to heck with worrying about any of the rest of it, as far as they are concerned.

[cherokeeprogressive]

49. Will they be paying it back at the SAME interest rate that they're charging US?

I'd wager the answer to that is a giggling "NO, silly."

[dysfunctional press]

51. do they ever?

when was the last time you got a mortgage at the same rate that the fed charged your bank for the money?

[cascadiance]

71. You forget, that despite their protestations to the contrary, corporations like banks aren't people!

Now when a person defaults on a loan, their life can be made difficult... A person's body doesn't have subentities that can walk away from a dead body hulk and be happy with in effect *stolen* cash.

You'll see the and ARE seeing the Enron strategy all over again, where at some point, those in charge of these banks don't really care about the health and credit worthiness of the company they work for and look it as a means for them to grab the loot and run before those come to collect the debt from the bank and say "have fun" to those left at the bank, just like they did at Enron.

Corporations are NOT people! You can't consider debt owed by these companies equivalent to debt owed by many people!

[dysfunctional press]

80. "You can't consider debt owed by these companies equivalent to debt owed by many people!"

well at least you're right about that- this debt is MUCH SAFER that debt owed by many(if not most) people.

learn the facts- don't get swept up in the un-informed and ignorant outrage.

[cascadiance]

92. I'm sure Enron employees would love to hear you tell that to them!

[dysfunctional press]

93. i wouldn't have said it to them.

enron was a much different case than these companies.

learn the difference.

facts are your friends.

[cascadiance]

94. In both cases you have those in charge trying to reward themselves FIRST

before they concern themselves with the health of the company.

A person will care more and do what he can in most cases to keep himself from going bankrupt and screwing up their credit rating. Whether they are able to control their situation and not get into that sort of debt is a different question. If they had control over congress critters like corporate lobbyists provide to banks and other companies and the elites controlling them, they'd probably not be having problems with their debts like they have now.

But with banks, unlike people who are *one* entity, you have these subentities of elites running them (or at least allowed to run them by our f'd up government), that would rather pocket the loot for their selfish selves than worry about what happens to the company if they default on loans, or go bankrupt, etc. You have to have rules in place that put their own hide in jeopardy before you'll have more assurance that the right thing will happen with these "toxic debt" liabilities that the American taxpayer is being asked to absorb.

Even when they leave, like the CEO from GM in the case of the auto companies, they get a pretty nice parachute before they jump out of the ship (23 MILLION after being asked to resign for failure?)

[dysfunctional press]

95. please- do yourself a favour...

learn the facts, not the hyperbole.

[cascadiance]

96. So what makes you such an "informed authority"!

An informed person doesn't just try to make sweeping generalizations to dismiss arguments if he wants to argue effectively and have your arguments (if you have any) accepted as more than just hyperbole of your own.

[dysfunctional press]

97. i've paid attention. and i've read.

you aren't making arguments- you're spewing hyperbole.

there's a big difference.

really.

[cascadiance]

98. I have too... I'm just hearing personal comments of "hyperbole"

Where's the beef son?

You still haven't contended with my concern that when you have a corporation that's being asked to work in the best interests of those loaning them money, that you aren't talking about a living person, but a group of persons that are standing behind the scenes, that perhaps don't really care about what happens to the "corporate person" if they can get away with that money themeslves by throwing bonuses, etc. at themselves and messing with that company's ability to make good at paying off that debt in the process.

Unless you have rules in place that meke these subentities PERSONALLY liable and accountable to what happens to their parent "corporate person"'s failure, other people are going to get screwed by that "corporate person". As I noted, before, people got screwed before by Enron when the subentities realized the jig was up in their case too and made off with as much as they could personally when they weren't being held accountable for the company's failure.

You can call this hyperbole, but it's far more substantive than your brief adjectives that don't say anything constructive in response.

[dysfunctional press]

99. you're only talking generalities-

not things that are actually specific to these bailouts.

read.
learn.
discover.

[cascadiance]

100. If I'm talking in generalities, you're just passing gas!

You are giving me NO CLUE as to what you are trying to say! All you are doing is hurling insults at me without any substance! And I think I'm getting bored with this conversation that's going nowhere. If you have something worthwhile to say, say it! Otherwise, I'm done. You don't win!

[dysfunctional press]

102. you don't seem to want to believe that we'll be getting the bailout money back with interest...

specifically- in terms of this bailout and the parties involved, why is that?

and- why do you think that money owed by a person is more secure than money owed by a corporation? that's just ludicrous.

[cascadiance]

105. Saying that corporations will THEMSELVES have the motivation to pay us back is also ludicrous!

It is the people in charge of them that have to be held accountable. If you don't have them personally liable for failure, and they still feel there's money they can in effect steal and get away with it, they will! It doesn't matter what sort of accountability you assign the company, if those in charge of it have no interest in ensuring they will be meet their commitments. I'm not arguing whether individual's debts will be more trustworthy than corporations.

And if you did watch "In Debt We trust" (you ARE informed and do it is precisely because the poor try to pay back what they can when they have money, that they have all of these folks targeting loans at them. If the system fails and they aren't able to, then yes they are a problem. But just being able to pay back loans doesn't make a company like a bank more apt to pay their loans back, if you don't have the motivation for those in charge of it to be held accountable *personally* if they don't pay it back. If the poor were such "bad credit risks" why did these banks make them these loans to begin with, IF they didn't have something to personally gain from doing so? That's the whole point! They didn't care how much they got their banks in trouble with these loans to start with, if they could personally profit from the creative ways they packaged these loans for their own "casinos". Why do you think those in charge of these banks will be any more honorable in how they handle our money as taxpayers when we loan them money to bail them out of this mess? You NEED rules to make sure they won't screw us, or kick them out before giving them money. One or the other! Otherwise those giving them these blank checks are as guilty as these guys are of the fraud they are conducting...

Note from here from filmmaker Danny Schecter what he also notes in the film:

http://www.nieman.harvard.edu/reportsitem.aspx?id=100179

In the old days the poor couldn't qualify for loans. Today they are considered among the better risks because, unlike the rich, many feel an obligation to pay back. Steve Barnett, who worked in the credit card industry and will appear in our film, explains: "These are the perfect customers. They need credit, so they're not all that concerned about interest. They'll take a higher interest if you will grant them credit. They'll pay off a small amount each month so they're in a sense 'on the hook.' And because of their own sense of values or because of their own background, their family background, they're not likely to declare bankruptcy again. Given the change of laws that's more difficult, anyway." And manufacturers now know they can spur sales by lending money to buyers up front and then get them to pay twice — first at the register, then with credit card payments, big interest rates, and compounded interest.

Given the ubiquitousness of these practices — and the reasons why they exist and persist that stretch from corporate America into the halls of government and revolve around issues of corporate greed and political favors — the expanding gaps between those who have (and then have more) and those who don't (but pay anyway) need to be explored and exposed by journalists. I am raising this issue and suggesting ways that it can be reported because I believe this is an essential story for us to tell.

Now as you would say, READ AND LEARN!

[dysfunctional press]

113. they are ALREADY paying us back...

and paying service payments on the debt...

but once again, you resort to completely unrelated generalities and gibberish, instead of even attempting to begin to understand the specifics of this particular bailout situation.

oh well, i tried.

[girl gone mad]

107. No, actually.

The poster is correct.

AIG is being systematically looted by insiders. Good luck getting that money back.

[dysfunctional press]

112. name one government bailout loan that wasn't repaid- with interest.

then we'll talk. :eyes:

just because you use the word "actually" in your subject line- it doesn't validate your opinion as fact.

[marketcrazy1]

138. prior performance is no guaranty of future results

we, the taxpayers WILL lose hundreds of billions on these bailout programs........ why would the PPIP program need to provide for over a 90 percent loss guaranty to "entice" private investors to put up a paltry 6 percent??? ........ because private investors are not STUPID! they KNOW ( as does our government ) that losses on these securities will be HUGE! and THEY refuse to risk even 6 percent unless the reward is is BIG....

[dysfunctional press]

140. which is all nothing but rampant speculation on your part.

i prefer to be content to wait to see how things actually play out. :shrug:

after all- that's all any of us CAN do.

[marketcrazy1]

144. I suppose

if a thief entered your home while you were having coffee in the kitchen you would be content to wait until he left before going to see what he was stealing.....

[kenfrequed]

134. Uhm

Failed pensions are facts. A hyperbole would be saying something like "Enron Devoured the livelihood of retirees." See? An exagerration using colorful illustration or a figure fo speech.

Learn English. And while your at it why not give us these 'facts' of yours and stop spitting out logical fallacies and five dollar words.

[dysfunctional press]

141. in case you hadn't noticed- this ain't enron.

nt

[kenfrequed]

142. Wait a minute.

You refuted all of the posters arguments with one line sentences that had absolute minimum content. Your reply to me was indicative of that style.

You demanded specific examples of loan and aid being lost or wasted. The poster presented possible examples. Rather than refuting and explaining why these examples did not apply you merely told the poster to "Read" and/or "get your facts."

I mean this is still a discussion board isn't it? We do discuss things here don't we?


It feels like you just want to dismiss this without being substantive and that does not speak highly of your debate skill or interest in the topic.

[dysfunctional press]

143. i didn't say 'lost or wasted'...

i asked for even one instance of a government bailout loan that was not repaid in full. with interest. and they did NOT post any examples of that. one poster spoke in vague generalities about not trusting corporations, and another posted examples of bank failures handled by the fdic, that again- didn't fit the description.

i guess i'm being more minimalist about things as a response to all the people posting long-winded rants about non-issues and joining in on the mostly press-fueled and misplaced public 'outrage' over things that are basically inconsequential- like the whole ignorant bonus brouhaha.

[marketcrazy1]

145. enron was petty theft

compared to what is happening and what is about to happen.

[girl gone mad]

109. That's a rather large assumption at this point.

Talking Points Memo summed it up pretty nicely:

What kind of a deal did Treasury Secretary Henry Paulson strike on our behalf with these firms? And more broadly, given the astronomical amount of money we're talking about and the massive deficits we already face, we need to know how we should think about what we've done. Have we invested the $350 billion that Congress has given so far, with a realistic expectation of at least being re-paid -- as Paulson, who has called it "an investment, not an expenditure," argues. Or is it more accurate to think of that sum as already spent and unrecoverable, simply the cost of preventing financial armageddon?

It's too soon to know how much of that money we'll get back, because the answer depends on the fate of the market -- something we all know better than to try to predict. But it's worth considering some of the key factors that will determine that answer.

In terms of Treasury's investment, it seems clear we got a bad deal.

TARP injected capital into the banks largely by buying preferred stock at a dividend rate of 5 percent per year -- that rises to 9 percent after 5 years -- in return for an equity stake in the companies. We also got warrants to buy common stock in the future at a fixed price.

But given the risk involved in the transaction -- investing in banks that were on the brink of collapse -- experts say we should have gotten more than 5 percent. "We could have gotten better terms," Simon Johnson, the former chief economist for the IMF, and now a fellow at the Peterson Institute for International Economics, told TPMmuckraker.

Demetri Papademetriou, president of the Levy Economics Institute, agrees. He points out that the governments of Britain, France, and Greece all conducted similar stock purchases, and got a dividend rate of 10 percent.

And Bloomberg recently calculated that, although Treasury invested twice as much as Warren Buffett did in Goldman Sachs, it gained only one fourth of the value.

(snip)

But that gets us into the broader question -- for which there's no easy answer -- of how to think about the TARP money. It's not right, say most experts, to think of this simply as government spending, akin to spending on, say, the Iraq war. The idea, of course, is that once the mortgage market stabilizes, the companies in which we've invested will eventually be able to write down their toxic assets, sell them off, and return to profitability. That will allow them to liquidate -- essentially, to buy back -- the stock we've bought, (something they're required by the terms of the deal to do before they can raise more capital). We'll have profited from the dividends, and will also be able to exercise our warrants to buy more stock at an advantageous price. That's why Frank insisted on equity in the first place.

But some say that may not happen. We simply don't know the true amount of bad debt that these banks have on their books -- and it's not clear that Treasury did either when it struck the deals.

But the signs aren't good. In early December, the Associated Press calculated that the warrants we bought via TARP, valued at a total of $27 billion, are now worth less than $18 billion. So if we exercised those warrants in December, we'd have been out over $9 billion.

And since then things seem to have gotten worse. Bank of America announced this week it needed a second bailout -- in the end, $20 billion -- because it hadn't realized just how toxic were the assets it took on in when it bought Merrill Lynch.

So even though Treasury says its goal wasn't to turn a profit but rather to stabilize the market, it's unclear whether it'll succeed in that -- right now, most signs suggest it hasn't yet. And that's the key question: If that longer-term stabilization doesn't happen, of course, we won't get much of our investment back, because the companies in which we've invested will fail, or be unable to turn a profit.

http://tpmmuckraker.talkingpointsmemo.com/2009/01/tarp_what_did_we_get_for_our_money.php

[dysfunctional press]

114. i'm using history as a guide, & giving them the benefit of the doubt- we've never been stiffed yet.

so...we shall see.

and being as it's one of those things that's entirely out of my control- i don't see any sense in worrying too much about it, so i'll just hope for the best.

que sera sera.

[girl gone mad]

116. Never been stiffed yet?

Franklin National Bank, Continental Illinois National Bank & Trust, the S&Ls, ATA airlines, Bear Stearns..

[dysfunctional press]

117. nope.

you might want to go thru your list one more time, do a little research, and list how much bailout loan money the taxpayers ultimately lost(or made) on each of those deals...

[girl gone mad]

119. We lost money on every one of those bailouts.

[dysfunctional press]

123. you are absolutely and completely wrong on that.

first of all- they weren't all bailout loans. when the fdic comes in- that's something completely different. banks pay premiums, like insurance, as part of their fdic coverage.

try a little harder.
and since you know so positively that we lost money on each one- it shouldn't be too difficult for you to at least ballpark the amounts we got taken for in the end, when the loans were...what? defaulted on? :shrug:

[liberation]

130. You are correct, afterall why should we believe our lying eyes.

Sinking $120+ billion on AIG, which was valued at less than $100 billion at the time, without even getting board voting rights... was a fantastic business decisions.

[dysfunctional press]

135. only time will tell...

but we do have a very good track record of getting our 'investments' returned. with interest- so i'm willing to see it thru.

[pnutbutr]

12. oh really?

confidence and lending fuel the fiat monetary system. Go ask any economist in the world.

[G_j]

11. whatever

the protester is factually correct.

[pnutbutr]

13. but misguided nt

[Zhade]

81. So we reward the crooks who fucked up the economy or else? THAT'S CALLED EXTORTION.

NT!

[redqueen]

122. Thanks for trying. Bumper sticker politics = stupid. (nt)

[Binka]

146. Yes and if you had some jelly you'd be a sandwich. NEXT.....

[earth mom]

7. Hey, but at least we're getting 25 bucks more a payday! Whoopee!

NOT! :grr:

[Vidar]

16. Just about right: bankrupting the nation to arm the biggest crooks.

[Dappleganger]

19. Wrong--they're demanding for our money to bail them out

and then refusing to give US loans, raising our interest rates for no reason, reducing credit lines, eliminating small-biz loans so we can't order stuff and make payroll, making it extremely difficult to get re-financing w/large fees...need I go on?

[truedelphi]

25. Onthe bright side, I am sure they are making Monsanto all the loans Monsanto needs

Can't allow farmers to save their seeds now, can we?

[HiFructosePronSyrup]

27. Not if they sign the contract, no.

That's like getting mad that the library makes you return the book.

[truedelphi]

31. No, it is not at all like getting mad at a library.

No library I know of is responsible for lying through its teeth to poor people in third world countries, getting them to sign on to Monsanto's GMO seeds, and also agreeing, through signing the contracts, to not save seeds for the next years.

It ends up being WAY MORE EXPENSIVE than Monsanto explained.

Thus we have the suicide rate for poor farmers in India quadrupling.

And American farmers here in North America have their lands confiscated when Monsanto determines that their patented seed is on your land. Doesn't matter if it is or isn't - they target smaller farmers who will not be able to withstand years of lawsuits. If the farmer fights it, the lawyers end up with the farm. If they don't fight it, Monsanto does.

Oh and you might want to talk to Dr Pusztai in Scotland. Hired by the British government to come up with conclusive answers about whether GMO products were as safe and healthy as non GMO, he had his reputation forever tarnished when he said that his research numbers showed that lectin enhanced GMO potatoes caused changing in rats' stomach linings (A sign that is often precursorous to cancer.) OVernight he went from a researcher/scientist who had a fabulous reputation, to a black listed scientist who industry claimed, was too senile and demented to deserve a laboratory.

Now if you know of a library that does these things, your witty one liner is totally appropriate!

[HiFructosePronSyrup]

40. The library did indeed make me sign an agreement to bring the books back.

The overdue fees were more than I was expecting, but it's right there in the contract, and I didn't go and commit suicide over it.

[truedelphi]

69. Wel the corn syrup in your bloodstream will do you in soon enough.

[zagging]

21. It only took him 96 years to figure it out

This has been true since the creation of the federal reserve.

[truedelphi]

24. But But But - why does she hate Britain? Or America?

C'mon everyone, get with the program. The new Administration is so much more personable than the old administration - so what if their economic team ascended from Hell?

[fascisthunter]

46. Yes it is the Deal...

but like most deals, there will be consequences.

[NorCalDem]

61. Of course it is. n/t

[Myrina]

62. YES that's the deal ... I've been pointing it out since December ...

... but nobody seems to catch on to that little detail.

When they could give the money directly TO US and we could use it to PAY OFF those creditors and free up their books from the bottom up -- instead they give our money to the creditors to make a profit OFF OUR BACKS.


:mad: Torch, or pitchfork?

[Statistical]

67. So you would rather owe the govt.

Which part of loan with interest do you not understand?
http://www.treas.gov/press/releases/hp1207.htm

I would be kinda pissed off if the govt gave me this gift.

We paid off your student loan w/ CITI and now you owe us:
5% for first 5 years
9% after that

plus we issued warrants on 15% of any rise in your net worth in the next decade.
Redeemable by us whenever it most benefits the US treasury.

I think I will let the govt keep that "gift".

[girl gone mad]

110. It was actually a fantastic deal for the banks.

They had to pay Buffet 10%, with preferred shares.

We only get the money back if they don't go under, which basically means we're stuck giving them endless backdoor bailouts because the politicians who voted for TARP don't want to admit failure.

[Sparkly]

72. The whole national debt carries interest.

All of this is going to be very expensive, but it seems BushCo left us in desperation mode.

[Mike 03]

73. Well, yes. That is, sadly, how banks make money. They lend and charge interest. NT

[xchrom]

74. while they are supposed to pay the money back with interest -- they will make money hand over fist

with this freeby of a bail out.

they will make money at both ends -- stuffing their own wallets -- before it gets back to the gov. -- EVEN IF they declare bankruptcy.

we the people are right good and well fucked with this.

[liberation]

129. Their "interest" right now is at an all time low.

Some banks are actually getting negative interest rates, i.e. they are getting paid to get our money. I would love to see a bank give me a loan at 0.5% interest, which is what they pay FOR OUR DAMN MONEY.

I am not religious, but I am starting to understand why Jesus only lost his cool with the bankers. I mean the guy managed to forgive those beating the sh*t out of him and all, but he literally could not contain going berserk on the bankers.

[xchrom]

131. i know -- it's infuriating isn't it?

and yes -- jesus understood the cannibalism that happens when you simply let some rob others 'legally'.

[Mike 03]

76. No shit? That is what banks do. NT

[global_traveler]

77. A perfect heist isn't something that's found only in the movies

Most of the money being stolen from OUR U.S. Treasury is electronically being transferred to the banks and financial institutions selected for bail-out/debt nationalization. Very little hard currency is on hand nor transferred to any of the recipients of this U.S. Treasury Smash and Grab episode of "Masterminds."

http://www.tv.com/the-masterminds/show/34114/summary.html

"A perfect heist isn't something that's found only in the movies..."


Federal Reserve Publications:
http://www.federalreserve.gov/publications/default.htm


Stay Vigilant,

Global_Traveler

[truedelphi]

104. Ihereby K & R your post so I can go to links tomorrow after my twelve hours of sleep

And welcome to DU.

[Tuesday Afternoon]

82. Error: You've already recommended that thread.

:kick:

[JDPriestly]

83. Yes. That's the deal.

[Canuckistanian]

84. Wasn't that the deal?

This is why I was against bailing out the banks.

Sure, on paper, they're repaying all the money.

I'm sure the check is in the mail already.

[Fireweed247]

91. great cartoon

http://www.sinfest.net/archive_page.php?comicID=2959

[chill_wind]

121. A keeper.

[harmonicon]

115. that's the deal

[1776Forever]

124. In the little Florida town where we had to give up our home there are 8 pages of foreclosures!

Guess what? Now they are letting people "rent" these properties. The banks own most of them and the issue is who will want to rent a property that could be sold right out from under them? The jobs are drying up rapidly too and that means that there will be no income for people to pay for them. I blame the Bush Administration and the free wheeling financiers of which AIG was one of the biggest!

:hurts:

[BlueJac]

127. The DEBT based economy we have, will live on for......

a while longer with money injected. If we don't return to making things in this country we are so doomed.

[BlooInBloo]

128. Ok guys - which is it? Do we want banks to lend, or not?

:rofl:

[Orsino]

133. Because we stopped giving our personal money to the banks...

...and because that personal money comes from the banks (who devalued that money by inventing too much more of it, thereby confusing the completely fake money with the mostly-fake that we use every day), we have to give them our public money instead.

Have I got it about right?