S.B. "Its Stated Purpose" ... (4.00 / 1)

n.t.

I am in earnest -- I will not equivocate -- I will not excuse -- I will not retreat a single inch -- AND I WILL BE HEARD.  

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by: lambert @ Wed Feb 18, 2009 at 14:47:08 PM UTC

Hey! (0.00 / 0)

I was just going to post that.  Although I try to curb my grammar/punctuation police ways, a headline by a frontpager should be free from silly errors, I think ...

Republicans can't fix our country; they're too busy saddlebacking.

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by: Ms Bluezone @ Wed Feb 18, 2009 at 15:34:17 PM UTC

[ Parent ]

Me too (4.00 / 1)

I don't usually do "me too" posts. But yeah, one does want folks who write for a living to get their headlines right.

Karl in Drexel Hill, PA

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by: KB @ Wed Feb 18, 2009 at 16:18:49 PM UTC

[ Parent ]

What they are using it for (4.00 / 2)

The Banks are, however, using TARP funds to engage in anti-consumer lobbying:

http://overruledblog.com/2009/...

Among the bills which the banking industry lobbied on after it began receiving TARP funds are bills to prohibit abusive arbitration practices, such as the Arbitration Fairness Act, the Fairness in Nursing Home Arbitration Act and the Fair Contracts for Growers Act; bills to help foreclosure victims and prevent irresponsible mortgage lending, such as the Mortgage Reform and Anti-Predatory Lending Act and the Helping Families Save Their Homes in Bankruptcy Act; bills to prevent the exploitation of credit card holders, such as the Credit Card Holders Bill of Rights and the Stop Unfair Practices in Credit Cards Act, and even bills to hold TARP recipients accountable for how they spend taxpayer funds, such as the TARP Reform and Accountability Act.

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by: Ian @ Wed Feb 18, 2009 at 15:08:14 PM UTC

Probably impossible (0.00 / 0)

Is if at all legally feasible to prohibit banks who receive bailout monies from engaging in any lobbying activities for a period of time?

Republicans can't fix our country; they're too busy saddlebacking.

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by: Ms Bluezone @ Wed Feb 18, 2009 at 15:37:13 PM UTC

[ Parent ]

That you, Congress, Treasury or Main Street thought that the TARP (4.00 / 1)

money was for INCREASING lending is a shame on you moment.

A cursory examination of bank balance sheets in November made it absolutely clear that the TARP money was needed solely to replenish capital that had been lost on EXISTING loans, and to prepare for future write-sowns on EXISTING loans.

There was ZERO chance that the TARP money would be used for NEW lending, it had to be used to repair the holes on the banks' balance sheets first.  And it has barely done that.

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by: steviez314 @ Wed Feb 18, 2009 at 15:34:47 PM UTC

Carrot and Stick (4.00 / 2)

Senators and Congress members were threatened that
the pipeline for state and local government lending would be killed and hundreds of thousands would be laid off (see babrara Boxer's statement at the time).  that was the stick.

The carrot was the continual promise that the lending spigot would be turned on.  

Balance sheets are a trailing indicator.  What was probably available when the TARP came out was some balance sheets from June and some from September.  (Besides which, I much prefer funds flow statements).

I would have voted against the TARP bill because there were no oversight provisions and no provisions that ensured that the $700 billion was not just a further taxpayer's gift to incompetent rich people.

The shame, as you call it, is entirely on the banks, the major media (bought and sold) and the Bush Administration. Don;t blame the victim (or mark), Steviez.

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by: David Kowalski @ Wed Feb 18, 2009 at 15:51:18 PM UTC

[ Parent ]

Mmm.... (0.00 / 0)

I don't disagree that propping up the banks is a silly idea -- it only delays the collapse, and in the meantime, the usual rats gnaw a hole in the corner of our largesse and scurry away with whatever they can carry. Which may have been the idea, or maybe not -- it's hard to tell what was going on in Obama's mind, if not in Larry Summers'.

Still, I wonder if we can really expect to kick-start lending as long as there are grave doubts remaining about who has a reliable income and who doesn't, who can pay a loan back and who can't. Can we solve the liquidity crisis without solving the income crisis, especially as it still seems to be getting steadily worse? Frankly, I can't see how. That's why the small size of the stimulus in relation to the TARP funding and Fed bank guarantees seems to me to be a recipe for disaster.

Then again, I'm not an economist. (God help those who are.)

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by: William Timberman @ Wed Feb 18, 2009 at 16:32:06 PM UTC

[ Parent ]

There will be no return (0.00 / 0)

to the lending practices that existed before this crisis.  The sheer corruption that existed in the mortgage industry, and the loans that that corruption enabled, will never be repeated.

Irregardless of whether you nationalize these banks, subsidize them or just hand them a pot full of money, credit is going to be harder to get.

And it SHOULD be harder to get.  There was too much leverage floating around before this crisis.  

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by: fladem @ Wed Feb 18, 2009 at 16:39:13 PM UTC

[ Parent ]

Other people's money (0.00 / 0)

is the mother's milk of any modern economy. Creditworthiness is basically voodoo, especially when the borrower relies on future income which can appear stable when it's not. So long as there's a healthy level of economic activity, there are prudential ways to manage debt, both for individuals and institutions. Fuck with people's incomes over an extended period, though, such as the Republicans and their satraps have been hell bent on doing for the past forty years, then top that with criminal leveraging in the financial sector -- a far worse form of voodoo than the prudential estimation of creditworthiness ever was -- and you get what we've got now.

It ain't that we want too much -- I don't think that morality and economics have ever been successfully emulsified -- it's that we've convinced ourselves that we can have whatever we want if we can make the payments, without at the same time asking ourselves honestly what external factors might impinge on that ability.

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by: William Timberman @ Wed Feb 18, 2009 at 16:58:56 PM UTC

[ Parent ]

Dead right (0.00 / 0)

These banks are by any reasonable definition bankrupt.

They do not have the required risk capital to sustain additional loans.  

The Tarp money was about avoiding the bankrupcy of the largest financial institutions in the world.  You can debate whether that was right, but there was zero chance that these banks would be able to increase lending.  

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by: fladem @ Wed Feb 18, 2009 at 16:36:10 PM UTC

[ Parent ]

CNN? (4.00 / 2)

I turned on the TV this morning and there was a report about the "surprising" anti-business sentiment among people.  The question asked was have businesses gotten too much.  The answer was a resounding yes.

What makes this especially galling is that the TARP money (and bailout money) are being used as a means to badly wound Social Security and prevent health care reform for the foreseeable future.

I changed the words of an old Union song from the Civil War around a bit.  Now I'm singing about "We'll hang Jim Cooper from a sour apple tree (the original is Jeff Davis)."

Businesses and Blue Dogs, two allied leaches.

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by: David Kowalski @ Wed Feb 18, 2009 at 15:38:42 PM UTC

I was watching Godfather III last night (4.00 / 1)

best line in the movie from Michael Corelone: "Crime and Politics, two words for the same thing."

He was almost right.  Sometimes criminals go to jail.

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by: zot2323 @ Wed Feb 18, 2009 at 16:29:16 PM UTC

[ Parent ]

What are you gonna do about it, Punk? (4.00 / 1)

And just like mobsters, it is easy to imagine Obama's base-the bankers, white shoe lawyers, and CEOs who financed his campaign-and who are walking away with what remains in the U.S. treasury-reading this blog and snickering "So, what are you gonna do about it, Punk?".

Well, what are we gonna do about it?

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by: John Halle @ Wed Feb 18, 2009 at 16:38:20 PM UTC

[ Parent ]

hello, this makes PERFECT sense. the masters (0.00 / 0)

of the universe robber barons view us peeee-ons as:

1. shitheads to take rip off in 'business' dealings,
2. shitheads who'll elect sell out leaders who'll legalize the rip offs,
3. shitheads who'll bail out the 'private' sector robber barons,
4. shitheads who'll put up with robber baron pay and robber baron perks for robber barons

WHY SHOULD THEY DO ANYTHING WITH OUR MONEY BUT STEAL IT?

rmm.  

It is too full o' the milk of human kindness To catch the nearest way

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by: seabos84 @ Wed Feb 18, 2009 at 16:56:42 PM UTC

You mean to pay for offices and secretaries for retired CEOs? (4.00 / 1)

It had been my understanding that if we allowed these retired CEOs to operate without them the economy would be doomed...

Looking for Charles O. "Chuck" Prince, ousted 15 months ago as Citigroup Inc.'s chief executive officer? Just call his extension at the bank, which still pays for his office and secretary in Midtown Manhattan.

Former Citigroup investment-banking head Michael Klein also has a free office and secretary after receiving a $34.3 million exit package when he quit in July 2008. John Reed, 70, who hasn't worked at the bank since he resigned as co-CEO in 2000 with a $5 million parting bonus, is entitled to an office and secretary for as long as he wants.

It's impossible to determine the cost of the free offices, said Alexander Cwirko-Godycki, research manager at pay consultant Equilar Inc. in Redwood Shores, California. Companies must list perks awarded to former executives when they depart, without estimating the value. Then the benefits don't appear in annual proxy filings that detail current executives' pay and benefits.

Merrill Lynch & Co., which had to sell itself last year to Bank of America Corp., provides an office and assistant to former CEO Stan O'Neal for the three years from his October 2007 resignation, according to a Securities and Exchange Commission filing. Merrill still maintains offices for ex-CEOs David Komansky, Daniel Tully and William Schreyer, two people familiar with the matter said.

When JPMorgan Chase & Co. Chairman William Harrison retired in December 2006, the New York-based bank agreed to give him office space and administrative support until he turns 70 in 2013, according to a filing. The cost was estimated at $267,000 a year. That's more than five times the U.S. Census Bureau's estimate of the nationwide median household income in 2007. JPMorgan spokesman Tom Kelly declined to comment.

 

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by: counterspin @ Wed Feb 18, 2009 at 18:23:23 PM UTC