Dodd Will Not Mirror Frank's Bailout Bill

by: Chris Bowers

Fri Jan 16, 2009 at 13:56


I just received confirmation from a congressional aide that Senate Banking Chair Chris Dodd will not introduce legislation in the Senate to mirror House Finance Chair Barney Frank's bill, HR 384, to provide increased conditions, transparency and oversight on the second $350 billion of the Wall Street bailout money (otherwise known as TARP).

As such, the funds will be released without any further conditions attached to them. Given that incoming Treasury Secretary Timothy Geithner has been closely involved with the disbursement TARP funds so far, virtually nothing will change about the program whatsoever. We still won't know which firms are receiving the money. We still won't know how that money is being spent.

All that was necessary to secure a seamless transition from the Bush bailout to the Obama bailout were two letters sent from Larry Summers to members of Congress. This is the same Larry Summers who, just last week, drafted a massive business tax cut for the stimulus package, which even moderate Democratic Senators found abhorrent. That tax cut was removed from the stimulus because, unlike anything that happens with TARP, one chamber of Congress can shoot it down with a simple majority vote. By comparison, for TARP to be stopped, a two-thirds majority was required from both branches of Congress.

Dodd's willingness to just trust the administration is, as Elena Schor noted earlier in the week, similar to the trust many Senate Democrats placed in the Bush administration when granting them authority to use military force in Iraq. Keep in mind that Dodd was one of the Democratic Senators who gave that authority to the Bush administration. While it can be safely said that there are good reasons to trust the Obama administration more than the Bush administration, HOPE and trust were abandoned as systems of government a long time ago. A far greater level of assurance than a letter to Congress would have been President Obama signing a Senate-approved version of HR 384 into law. It is a willingness to sign such laws, beyond HOPE, that was the reason so many Americans voted for Obama back in November. Letters of assurance are no substitute for actual laws.

TARP money will be released, without any new conditions, oversight or transparency attached to it. At this point HOPE has moved from a campaign slogan to a system of governance.

Chris Bowers :: Dodd Will Not Mirror Frank's Bailout Bill

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Dodd Will Not Mirror Frank's Bailout Bill | 48 comments
Is it too much to ask (4.00 / 2)
that they provide even the same level of detail us individuals are ask of on our own income tax forms?

For crying out loud, the government demands more info from ME on my tax form than they demand of the "TOO BIG TO FAIL" corporations that want OUR money.

Is it too much to ask for a web site that has line items of what company received how much, when, who approved it, status etc.?

If not for fact that the jobs we work for withhold taxes in our pay checks I'd say we go on a no tax strike but they got us by the balls.

Couple of questions (0.00 / 0)
One, what's your source on the info about Dodd? And assuming this turns out to be true, is there any chance some other Senator will step up to the plate and try to get a vote on this? Also, if the House passed Frank's bill, wouldn't it then go to the Senate for a vote? At least they would have to refer it to committee, right?

Second, how do you know Larry Summers wrote the business tax cuts? Not that I doubt it (it sounds plausible enough), but I had not seen that particular bit of information in any of the news reports, and I follow this stuff semi-closely.

Answers (0.00 / 0)
1. Post updated to reflect thta the source was a congressionale aide.

2. Summers was in charge of writing the draft of the stimulus. As such, pretty much everything in it comes, at least in part, from him.

[ Parent ]
The bissiness tax cuts (0.00 / 0)
Was Obama's campiagn promise from after the sept crash. so I would think he put it in and took it out as things progressed.

But I understand the need to have a boggy man out there for everything. I can except by the pase of vitriol so far that Obama soon will be your boggy man. Gratz on being irrelevant for the next 8 years if that ever happens.

[ Parent ]
they're all so dependent on corp/banking $$ -- (4.00 / 2)
and Obama's behavior in not taking public financing ensures that corporate influence and purchasing of our officials is now the norm.

Robber Baron days all over again -- and even those officials who try to alleviate or reduce the total unaccountability get canceled out by others. And Schumer and Emanuel's recruitment of "self-financing" millionaires for open seats has installed a whole new crop of officials who don't even care about the rest of us.

Is it too soon... (4.00 / 1)
to start breaking out the "rubber stamp" pictures?
We know EXACTLY where the TARP money went. (4.00 / 3)
It shows up on each bank's balance sheet, is fully disclosed in their last 8-Ks.  Check Citibank's and Bof A's 8-Ks released today.  I see the TARP preferred stock investments disclosed and accounted for.

Interesting (0.00 / 0)
Can we look at enough to find the entire amount? That would be a big project, but useful.

Also, is there a way to separate the preferred stock payments out, so that we know the exact amounts given from the Treasury Department, rather than other sources?

[ Parent ]
Here is the link to the Treasury's latest TARP report: (0.00 / 0)
[ Parent ]
One thing about that PDF (0.00 / 0)
Is it just lists banks and amounts. Does not say that what that 15,000,000,000 dollar line item for Bank of America is, just says Preferred with warrants. But I'd like to see how many preferred shares and at what price/series etc as well.
[ Parent ]
Terms are same for all banks: (4.00 / 1)
Par value, senior preferred paying 5% for 5 years, 9% after that.

Also, Treasury gets warrants equal to 15% of the preferred investment convertible at a 20 day average of the common price.

[ Parent ]
Thanks again (0.00 / 0)
That is exactly the info I was looking for.

You by chance a banker/finance guy? You seem well versed in this subject matter.

[ Parent ]
I'm an independent trader with a banking/finance background. (0.00 / 0)

[ Parent ]
Well, not quite (0.00 / 0)
It seems that the new BofA money has an 8% coupon, according to this. I believe that the second Citi bailout also had the same 8% coupon. Not sure if any warrants on the second round.
[ Parent ]
Thanks - good find (0.00 / 0)
I am going to do a little digging around this evening when I get some free time.
[ Parent ]
TARP is totally transparent... NOT! (0.00 / 0)
The fact that we know which banks and bank-like institutions got the money doesn't exactly answer every question. For example...

The opaque character of much of TARP is reflected in the proceedings of the five-member Financial Stability Oversight Board (FSOB), which has responsibility for reviewing the program and evaluating its effectiveness "in assisting American families in preserving home ownership, stabilizing financial markets, and protecting taxpayers." FSOP members are Bernanke, chair; Paulson; Securities and Exchange Commission (SEC) chair, Christopher Cox; Director of the Federal Housing Financing Agency (FHFA), James B. Lockhart III; and Secretary of Housing and Urban Development (HUD), Steve Preston.

The FSOB held a closed meeting on December 10 to discuss an extraordinary range of key economic and policy issues. Later, for public consumption, the board released four pages of minutes.

For those curious about what this group of five top policy-makers was up to, there are a grand total of 928 words describing their take on such complex matters as the overall effectiveness of TARP; the massive $55 billion Treasury purchase of Citibank preferred stock, along with "the loss protection and residual financing" on $306 billion in assets provided to Citigroup by Treasury, the FDIC and Federal Reserve; the procedures governing public access to records; the state of the housing and financial markets; the need to establish "metrics" to evaluate TARP; and the development of a strategy for ultimately unloading all assets acquired under TARP.

And...

Jason A. Gonzalez, FSOB secretary, might qualify for nomination to the bureaucratic hall of fame - he uses the words "discussed" or "discussion" 20 times -- except for one slip-up: toward the end of the document, Gonzalez writes something that actually reveals something, albeit modestly:

"Members also discussed the difficulty of isolating the effects of the TARP given the variety of policy actions taken by the U.S. government to support financial stability and promote economic growth and the short time that has elapsed since the TARP was first implemented, and the difficulties associated with monitoring the use of specific funds by individual institutions."

In other words, even the top guns in federal finance are having difficulty figuring out whether the billions and billions they are handing out are actually doing any good, and they have run head on into "difficulties" when trying to look at how an individual bank makes use of its infusion of cash.

So we know "everything" about TARP, except for a few tiny details, like...

Did any of it actually help anybody except exactly the same bankers who destroyed the American ecionomy?

[ Parent ]
The TARP did exactly what it was supposed to do: (4.00 / 1)
Raise the capital ratios of the banks and increase their equity reserves against 2008 asset write-offs and the ones to come in 2009.

Whatever else it was sold as, forget it--that's what it was needed for.  Banks couldn't find investors, so the taxpayers became investors.

As to helping families, that was never possible since the capital ratios are still too low and banks are still under-reserved.

As to helping the economy...well I can't imagine what it would look like right now if the banking system failed, so who knows.

[ Parent ]
Very triue (0.00 / 0)
Many of these bank's risk/capital ratios were below the Basle II requirements.  Essentially that means these banks were bankrupt.

I do think, though, that the TARP left the common stock shareholders off the hooks, particularly in the case of Citibank.

[ Parent ]
I am working on creating (0.00 / 0)
a weakly report on the value of the TARP investments.

Example: This link describes one what the Treasury Department got for a 40 Billion Dollar Investment in AIG.

There is a fundamental misconception that the TARP equity investments were just thrown away.  This is not true.  It may very well be possible that the value of the investments is greater than the cost of the TARP.

There are some real problems with the transparency of the TARP, but the equity investments DO have value.  In fact, one thing to watch is make sure that Treasury maximizes the value of these investments for shareholders.  

[ Parent ]
here is what your equity looks like (0.00 / 0)
[ Parent ]
8-ks (0.00 / 0)
that just says they received it, it does not say what they did with it

If you can link over or post to the lines that disclose exactly what they did with $25 billion, $45 billion and they account for every dime, then that would be new, but to date, I see no such disclosure.  

NoSlaves.com  


The Economic Populist

[ Parent ]
look at their cash flow (0.00 / 0)
you can see where all their cash goes each quarter. TARP money doesn't go some place specific other than on their balance sheet as Cash and a Liability of a long term loan and perhaps a liability for the warrents and an entry for any equity issued.

its not magically channeled to specific needs.

~* the * Will * to go on *~

[ Parent ]
Let me add (0.00 / 0)
if you want a more detailed balance sheet from the banks then normally required under SEC, that's fine. but its not like you can't see now if they are acquiring companies or lending or just sitting on cash; you can, that is on the balance sheet.

~* the * Will * to go on *~
[ Parent ]
no, and not according to Warren either (0.00 / 0)
You cannot see that.  They do not disclose all of their expenditures in a 8-k and ya know, give me a link where it's accounted for.   Because there are hundreds of financial analysts, bloggers and policy makers looking for this information and while a few things are dug out, for the most part...no one knows.  So, if you have magically discovered what others are digging high and low for and cannot find, please post it.  

I'll give you another example where corporations do not disclose what's going on with 8-k or 10-k Edgar forms...
you cannot find out what the hell is going on with investments, expenditures and details of corporations offshore outsourcing large R&D in China, India especially.

It's not on the forms, you might see a press release but for the most part, it's simply not disclosed.

This isn't either from everything I've tried to dig out.  

NoSlaves.com  


The Economic Populist

[ Parent ]
you misunderstood (0.00 / 0)
what I meant was that if you are looking for a more detailed balance sheet that makes sense as a request, (I am aware they do not provide that). but that this notion that you can't see generally how the banks are using money is wrong.

the data you're seeking in general are trade secrets. i can understand your desire to see them since you've financed them - and I agree with you. however in general I don't think companies should have to disclose details like what their particular investments are or who they hired to do R&D etc. I mean, I might want it as an investor - but I don't have to buy their stocks or bonds. but sure - if what you want is a more detailed balance sheet for those companies financed by us that makes sense.

never the less there will never be any specific line in their books that says "$10,000,000 TARP dollars paid to executive bonus". Its all just "Cash".

also it would likely be an easier process to require certain things of a company in terms of operations -- like no expansion of overseas labor (although I think that would be crazy), or no executive bonuses for any current employees, etc -- and then have audits by a watchdog or something, rather than to try and get them to disclose a more detailed balance sheet. i think it will be a long road to get that.

~* the * Will * to go on *~

[ Parent ]
CASH is not disclosure (0.00 / 0)
Where is this 8-k which discloses this information!  You keep claiming it is there, well put it in a comment because it is not there.  Prove it or admit they have no disclosed where the TARP money is going.  

No, R&D expenditures are not trade secrets.  New Plants, new facilities, hires, fires, investments, JVs, VC investments....none of that is "trade secret", it's expenditures and should be disclosed.

There is no "trade secret" in claiming a team of 1000 "new hires" in a new R&D facility in India will now being doing clinical trials and advanced research in the drug research area of

fill in useless drug to increase the width of a body part y here
.  

Exactly, CASH is not a disclosure.  CASH does not say "oh we gave $200,000 to this group for a fund raising activity, $100k for a golf game, $350k for a new corporate jet, $1.2B in JV investment to an Indian offshore outsourcer, $3.4B in cash plus acquisition party executive bonuses to our new merger with "bank Y"
and more to the meat of the matter:  $17 billion to meet CDO obligations that came due, $18 billion in write offs of short sales in hedge fund y, $15 billion in derivatives of type CDS losses...

CASH is not disclosure.  


NoSlaves.com  


The Economic Populist

[ Parent ]
right here (0.00 / 0)
here are quarterly reports for Citibank.

http://www.citigroup.com/citi/...

every public company issues such documents, its not a secret.

-

your other complaints have nothing to do with TARP. it sounds like you would like financial docs to have a lot more details. great. but that is a lot more broad than the issue of "how TARP money is being used" and what we know about it. The question really is what kind of business are tax payers financing. But TARP money isn't used for specific things, it just goes to Cash as an asset (or it might be accounted under "Fed funds sold and securities borr'd or purch under agree. to resell"), I'm not entirely sure, a professional accountant would know better which account they debit it to.

I would disagree that what a company specifically spends money to R&D is definitely a trade secret, that is something a competitor would very much like to know.

~* the * Will * to go on *~

[ Parent ]
whatever (0.00 / 0)
and the disclosure is not in these statements.  You pull me to their financial statement page because the specifics do not exist.

Bloomberg is denied a FOIA trying to find out where $2 trillion of Federal loans.  

Just one example of the many trying to find out where all of this money went.

Q.E.D.

NoSlaves.com  


The Economic Populist

[ Parent ]
BOA 8K (0.00 / 1)
here, bank of america just issued an 8K

http://investor.bankofamerica....

and here are some highlights they report in it:

Merrill Lynch preliminary results indicate a fourth-quarter net loss of $15.31 billion, or $9.62 per diluted share, driven by severe capital markets dislocations. (See the  Transition Update  section of this news release and supplemental earnings information provided on investor.bankofamerica.com for further details.)

In view of the continuing severe conditions in the markets and economy, the U.S. government agreed to assist in the Merrill acquisition by making a further investment in Bank of America of $20 billion in preferred stock carrying an 8 percent dividend rate.

...

Of the more than $115 billion in new credit extended during the quarter, about $49 billion was in commercial non-real estate; $45 billion was in mortgages; nearly $8 billion was in domestic card and unsecured consumer loans; nearly $7 billion was in commercial real estate; more than $5 billion was in home equity products; and approximately $2 billion was in consumer Dealer Financial Services.
  
During the fourth quarter, Small Business Banking extended nearly $1 billion in new credit to over 47,000 new customers.
 
Mortgages made to low- and moderate-income borrowers and areas totaled $11.3 billion in the fourth quarter, serving more than 77,000 borrowers.

-

there is good reason for outrage about the use of TARP (mostly the terms of the equity and warrants imho), but people need to learn what they are talking about so they can critique what is going on in substance rather than just blind outrage.  

~* the * Will * to go on *~

[ Parent ]
I do know what I am talking about (0.00 / 0)
if you bothered to visit EP you would know that.  I also think Elizabeth Warren knows what she is talking about, as well as all of the other financial analysts working on locating where the money is going.

TRed for ignorant insult.

NoSlaves.com  


The Economic Populist

[ Parent ]
Did Obama/Summers even object to more oversight? (0.00 / 0)
I understand why the Democrats would be loathe to turn down Obama's request for the money, because to them, it would probably seem like a big deal to oppose their leader and supposedly embarrass him in the process.

But was Obama lobbying against even the modest type of oversight suggested by Barney Frank?  

I am also bound to point out (4.00 / 3)
that logic suggests that if Obama really wanted to implement all the conditions contained in the letters to Congress then he would support putting the language into legislative form.  It would put many Republicans in a bind to vote against tightening up oversight after they were bitching about the current policy.  Then, with actual bipartisan support, Obama would have political cover.

Instead Obama seems to want to look like he is for policies that he really is against.  It reminds me of a scene from Glengary Glen Ross:

Obama on this yesterday -- (0.00 / 0)
... In an interview with Washington Post reporters and editors, Obama stressed the "rickety nature" of the financial system.

"We can't just spend our way out of the problem. At some point credit has to flow effectively," he said. He added that "banks now are fully caught up in a downward spiral where they have now affected the real economy, the real economy is now affecting their balance sheets. And so we're going to have to intelligently and strategically infuse some additional capital into the financial system."  ...

Obama acknowledged that it "wasn't an easy vote" for many senators "because of the frustration so many of us share" over how the Bush administration managed the first half of the rescue fund, known as the Troubled Asset Relief Program, or TARP.

"Restoring the economy requires that we maintain the flow of credit to families and businesses," Obama said in a statement. "So I'm gratified that a majority of the U.S. Senate, both Democrats and Republicans, voted today to give me the authority to implement the rest of the financial rescue plan in a new and responsible way."  ...

-- Senate Votes To Release Bailout Funds To Obama -- http://www.washingtonpost.com/...

note -- To HIM, and give HIM the authority.

[ Parent ]
A TARP failure (4.00 / 1)
Circuit City is closing all 567 stores. The Washington Post reports that 31,000 employees will lose their jobs.  Circuit City had two buyers who would keep the chain open.  Neither could get credit.

Wasn't the TARP money supposed to prevent this scenario from unfolding?

As for the first $350 billion: Do we have a list of every company that received TARP money?  If not, looking for TARP money would be a difficult search as there are still a huge number of banks operating in this country.  Not all of these are publicly traded companies.  Thus, even if there was a list, only partial results would be available.  The reports cited are quarterly or yearly reports.  Again, not all reports would be available.
In some cases, thanks to the intervention of past Republican congresses, these reports are not available without paying substanbtial fees.  In a past professional life I once racked up over $1,000 in fees in a single night.  Often fees were in the hundreds.

The Federal Reserve, of course, has refused to disclose which companies received its $1.2 trillion in largesse telling Congressman Allan Grayson it was none of his business (Barney Frank inexcusably came to the rescue of the FEd, too).

TARP does not equal guaranteed credit (4.00 / 1)
The creditworthiness of a business is still important TARP or no TARP.

If you were a bank, would you invest money into an organization like Circuit City in this economic climate and with the competitive nature of their business?

I certainly would not.

[ Parent ]
The Best Way To Leverage TARP (0.00 / 0)
As I said in my diary on the subject, there is roughly $178 billion in outstanding student loans, owed to the same Wall Street banks that TARP loan money has already been set aside for.

The Obama administration whould re-classify $178 billion in TARP funds from "loan" to "student loan repayment". This would 1)provide a cash infusion to the banks and 2)dramatically boost the economy when the 10.1 million student loan payees are free to spend on big ticket items, and 3)do all of this without costing one red cent.

Trust or Expediency? (0.00 / 0)
Do these politicos actually trust Mr. O, or are they just trying to hedge their bets?

By letting Obama do as Obama will, they are in a position to benefit if he enjoys success, and to jump ship should he prove other than successful.  

"It sounds wrong...
     ...but its right."

Im rediculously excited that Chris Bowers has some connections. (0.00 / 0)
From meeting with Obama to pressuring senate staffers to divulge info, i for one am extremely proud to have Chris garner so much respect in DC.

this particular news sucks of course, but that fact that you got it is fantastic.

Sen. Dorgan has introduced a TARP oversight bill (4.00 / 2)
called the Taxpayer Protection Act:

http://www.opencongress.org/bi...

Like Frank's bill, it includes the executive pay limit rules from the auto bailout bill, stricter reporting requirements etc., but it doesn't have any of the language relating to housing and foreclosure prevention.  

It would also create a Taxpayer Protection Prosecution Task Force to "investigate and prosecute financial fraud cases or any other violation of law that contributed to the collapse of our financial markets," and "seek to claw back any ill-gotten gains, particularly by those who received billions of dollars in compensation creating the real estate and financial bubble."

"Pelosi: House Will Take Up TARP Reforms Next Week" (0.00 / 0)
-- http://washingtonindependent.c...

("take up" after the fact -- when they purposely didn't fix it this 2nd time. we're supposed to be reassured by this? sick.)

[ Parent ]
cutting through the denial (4.00 / 1)
Good for you.  Might as well get the facts and thus the pain out there right now.

I tried to tell people, ya know those corporate lobbyists and the financial lobbyists are the worst, are running this show and they have their key people in place, both parties.

Here we are.  

NoSlaves.com  


The Economic Populist

so when does (4.00 / 1)
the rank and file left get tired of these games played by the Dem leadership like Dodd and stop wasting its time with waiting to "see what what they do"?

just curious, cause the left seems to have a lot of pent up trust that it can't seem to shed.

there is a very serious need to stop being reactionary, which plagues the left. i hope the front pagers can get ahead of the curve here and get ready for TARP 2 and 3; please don't act shocked when they happen and upset when passed; some very smart economists are already saying the full TARP 1 is not nearly enough.

~* the * Will * to go on *~

"We still won't know how that money is being spent." (0.00 / 0)
while i also want to know which firms have received the money, this idea that you can know how the particular funds were spent defies all logic. this is a silly question.

banks are in business to make money from lending money. TARP money goes onto their balance sheet to shore up their current assets. the problem they face is that other assets have been falling in value - like mortgage payments due. thus they had trouble covering their liabilities - mostly cash on deposit. in other words the banks we're over leveraged. so the govt throws money at them to put on their balance sheet, thus giving them enough money to cover their liabilities. once they have enough money to cover liabilities (average recurring cash deposit withdrawals) then they will have excess cash which they can lend. banks being in the business of lending then offer loans to people, businesses, whatever. people apply for loans and banks assess the risk involved of lending those individuals. maybe they lend the money for a home purchase, maybe to fix a home, maybe to open a shoe store, or in the form of a credit card. they lend out money to whatever until they are at the threshold of their deposit coverage requirements (they may supplement this with an adjustment for additional risks in the current economy - e.g. they may anticipate higher defaults and so not lend as much to keep even more cash on hand). what they don't do is have magic relationships between a source of funds (deposits, TARP, bond sales) and usage (mortgage loans, credit card loans, a new branch location). If you specified that TARP money could only be used for mortgage loans then banks would (under this crazy idea that they separate money) stop using all other money for mortgages and use it for whatever else they need to fund - cash available for withdrawal, business loans, a new branch, whatever. so the question is silly, and the answer will be meaningless.

Or in other words you can already see how they are spending the money every quarter - of their total cash flow TARP is some proportion, thus that much (proportion) of each cash outlay they expend each quarter is TARP.  

~* the * Will * to go on *~

It gets very frustrating that people don't get the point you are making, (0.00 / 0)
as though the 20s coming out of the ATM should have "TARP" imprinted upon them.

Looking at the bank's balance sheets, it looks like most of the capital injection just replaced short term funding that didn't want to roll over given the asset writedowns.

New lending?  Gotta survive the old lending first.

[ Parent ]
there is a serious lack of basic financial knowledge on the left (0.00 / 0)
at least among the majority of publishers. IMHO. they get caught up in battles for "their fair share" of spending (e.g. banks vs unions), they don't seem to understand debt or leverage, or concepts like pulling production forward, or basic financial accounting. I could go on, I'm rattling these off in no particular order. I'm admittedly a newb to financial accounting and other various financial concepts, but some of this stuff is just obvious, and I also just bothered to take a week long intensive in financial accounting. I find the financial blogs (analyst blogs and things like calculated risk) are having far more substantive discussions of the policy debate; and when you read them and then come back to the left political blogs the left political bloggers just seem at sea on this whole thing.  

~* the * Will * to go on *~
[ Parent ]
but shouldn't they have to prove they're doing that? (0.00 / 0)
instead of using it to acquire weaker banks, and/or using it simply as a cushion?

what are their liabilities?

they didn't have to submit detailed accounting records that showed they couldn't meet their liabilities, did they?

and what about the fact that they've shut down lines of credit and/or reduced them for even good, solid business customers?

why is it that big businesses with too many liabilities and not enough income go bankrupt -- and that's appropriate -- but these businesses get our money without strings?

we're simply rewarding these businesses -- regardless of liabilities. and they already have benefited for years from laws and lack of regulations and oversight on them to begin with.

[ Parent ]
granularity (0.00 / 0)
Their financial docs reveal a certain amount of info about what their liabilities are - the greatest is likely to be deposits and long term debt. If people want more details they need congress to require more.

As for lending to solid businesses I'm very confident they do. Plenty of people right now are refinancing their mortgages. It would be ignorant to think banks are not lending to some businesses. But you have to keep in mind we are in a massive deflation spiral anfd frugality is the new zeitguist - this means most businesses will be contracting, and the bond markewt iirc is betting that 20% will default on their debt - that banks raise their lending standards in this climate is both not a surprise and it is wise - they are already over exposed - so they are rightfully being cautious. That congress doesn't get this is truely mind boggling. You can solve a solvency crisis with more lending.

I've been opposed to every bailout because I think the lending terms we required sucked.

~* the * Will * to go on *~

[ Parent ]
some reality checks (4.00 / 1)
Folks.  Do you realize for about $15 billion dollars the United States could have bought, outright Citigroup?  Their total stock was that low.  The United States could have literally purchased, in an open market many of these companies and spent way less money.

What does that tell you?  People seriously need to scale, to realize just how much money $700 billion dollars is.  

These financial companies are getting more taxpayer money than the entire companies, including their assets are worth!

NoSlaves.com  


The Economic Populist

Dodd Will Not Mirror Frank's Bailout Bill | 48 comments
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