Why Bank’s should Not have taken Gov’t Money

US to put conditions on Tarp repayment

Strong banks will be allowed to repay bail-out funds they received from the US government but only if such a move passes a test to determine whether it is in the national economic interest, a senior administration official has told the Financial Times.
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The official said former Treasury Secretary Hank Paulson was right to treat all the banks the same way in late 2008 at the peak of the crisis but it was now necessary to differentiate more between institutions.
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I hope the banks will learn from this, never trust government, they took the government’s money when some did not want it, now that they want to give it back since they never really did much with it to begin with, the government will not take it back until certain tests are passed.

All Businesses, if you want to be independent, do not take government “loans”. The strings will never be gone and if they want the government will take over your business from you. ( New GM CEO ring a bell.)

Now since the public has gotten more vocal about stopping the insane spending, Congress wants to back out. The government solution is not to let the banks figure it out for themselves. The government will just buy the banks by taking over the bank’s stocks and destroy an individuals common stock value.

U.S. may convert banks’ bailouts to equity share

President Obama’s top economic advisers have determined that they can shore up the nation’s banking system without having to ask Congress for more money any time soon, according to administration officials.

In a significant shift, White House and Treasury Department officials now say they can stretch what is left of the $700 billion financial bailout fund further than they had expected a few months ago, simply by converting the government’s existing loans to the nation’s 19 biggest banks into common stock.

Remember, the government will change the rules whenever it wants to keep control.

Stopping this type of government behavior is the real root of the tea parties last weak. The government needs to get out of the way and stop trying to prevent some failures and preventing all from succeeding.

US Government spending will bankrupt the world

The US federal government is in the process of bankrupting the world as accounting practices that the federal government does not allow private companies to use are used to hide the real government debt. This cuts across party lines and the end of liberty and personnel freedom in the world.

The total economic of the world based on the ponzi scheme known as government spending is close (if not already beyond) the tipping point. Paper currency will be virtually worthless since the governments that print them have no possible way to back their value.

Government spending is the problem and drastic government spending cuts (real cuts not decreasing the rate of increase) of 50 to 90+% in some cases are required.

Federal obligations exceed world GDP, Does $65.5 trillion terrify anyone yet?

As the Obama administration pushes through Congress its $800 billion deficit-spending economic stimulus plan, the American public is largely unaware that the true deficit of the federal government already is measured in trillions of dollars, and in fact its $65.5 trillion in total obligations exceeds the gross domestic product of the world.

The total U.S. obligations, including Social Security and Medicare benefits to be paid in the future, effectively have placed the U.S. government in bankruptcy, even before new continuing social welfare obligation embedded in the massive spending plan are taken into account.

The real 2008 federal budget deficit was $5.1 trillion, not the $455 billion previously reported by the Congressional Budget Office, according to the “2008 Financial Report of the United States Government” as released by the U.S. Department of Treasury
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“The federal government is bankrupt,” Williams told WND. “In a post-Enron world, if the federal government were a corporation such as General Motors, the president and senior Treasury officers would be in federal penitentiary.”

Assuming 330 million Americans, 65.6 trillion debt is equal to $198,484 per American. This is on top of any state, local or personnel debt.

If you want to really understand the what the future holds and the consequences read the A Citizen’s Guide published by the treasury department.
It would be nice if government would live by this motto in the report.

Using the government accounting methods that if any private business used, the CEO, CFO and board of directors would be in jail, here are some tables from the report on future predictions.

These projects do not take into account the money spent since Oct 1, 2008. TARP and the new stimulus plan are on top of this staggering debt.

Americans need to hold our employees the elected government officials responsible. New blood is needed.

Free Markets – Another Midnight Bank of America Bailout

Bank of America to get $20 billion in emergency funds

Glad to see that Bush and Obama are agreed that the government needs to give money to one private bank to buy another private bank and when the purchase of the failing bank does not work out the government will give more money to the original private bank.

Socialism to save the free-markets. What a grand concept.

Michelle Malkin has a great history and commentary on this topic.

Middle of the night bailout for Bank of America; TARP investigation of BoA and Citigroup/Jesse Jackson event requested

TARP = Socialism

Government to Pick Winners and Losers

I would like someone to point to the area of the constitution which allows the US government to pick which businesses succeed and fail in the American Economy.

Treasury Opens Door to Aid for Broad Array of Firms, Industries

‘Constructively Ambiguous’

Treasury officials “much prefer discretion, and so they would view the statement as being constructively ambiguous,” Reinhart said. “It’s appropriate that they end the year the way they spent most of it — that is, adding uncertainty into an environment in which there’s a lot of uncertainty.”

The guidelines don’t bind the government, so the lack of specifics gives President-elect Barack Obama plenty of leeway to decide who succeeds and fails when he takes office in three weeks. The bailout was originally designed to buy assets from banks and has instead become a fund for Treasury to prop up lenders, insurers, carmakers, auto-finance companies and, now, any firm that may be important to those industries.

Slippery Slope

“The further you go, the slipperier the slope becomes, the more you open the door to anyone who says, ‘Look, my firm is in trouble, I need help too,’” said Lyle Gramley, a former Fed governor and now a Washington-based senior economic adviser for Stanford Group Co. “We don’t want to go any further down that road than we absolutely have to.”

In America we do not elect gods or omnipotent beings. These appointed bureaucrats of the elected officials are a joke. I love how things things are always announced on a Sunday night or a holiday night when the media and most people are not paying attention.

Where is the openness and direct communication, where is the honesty. The founders who fought against a strong central government were 100% correct, centralized power will destroy freedom and liberty.

America has now voted itself into socialism just like Venezuela, I hope the power outages, oil refinery problems, food shortages and coffee shortages.

This is the result of government officials picking and choosing winners and losers in business.

We all need to take a page from Ronald Reagan.
From his 1st Inaugural address

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You and I, as individuals, can, by borrowing, live beyond our means, but for only a limited period of time. Why, then, should we think that collectively, as a nation, we’re not bound by that same limitation?
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In this present crisis, government is not the solution to our problem; government is the problem. From time to time we’ve been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people. Well, if no one among us is capable of governing himself, then who among us has the capacity to govern someone else? All of us together, in and out of government, must bear the burden. The solutions we seek must be equitable, with no one group singled out to pay a higher price.
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Another great Reagan Quote

The nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help.’
Ronald Reagan

GMAC Bailout – borrow, spend, repeat until debt free

Nice to know that a private company can convert to a bank holding company under its own rules and get taxpayer money.
GMAC gets help

GMAC has been trying to raise capital after the Federal Reserve said last week that it would approve GMAC’s conversion to a bank holding company. The Fed usually requires banks to have $30 billion of capital on hand, but it made a special exception for GMAC, as the government considers the company critical to the recovery of the U.S. auto industry.

The company is trying to recover from $7.9 billion of losses in the previous five quarters, most of which came from risky subprime mortgage bets made by ResCap. It got some help Monday night when the Treasury Department invested $6 billion in the company through the Troubled Asset Relief Program.

Partially owned by Chrysler parent Cerberus and also by General Motors (GM, Fortune 500), GMAC did not release details of how much capital it has raised to date. It previously said it would need 75% of bond holders to change their stakes to equity holdings to reach the $30 billion plateau.

I guess rules are only rules as long as they are convenient, as soon as they are not convenient the rules can be changed to whatever King Paulson says is OK.

Of course, GMAC will pay the “loan” back to the taxpayer with interest. GMAC is going to loan the money out and I am sure that the interest GMAC will charge will cover the interest owned on the loan to the taxpayer. HAHA. As noted in this article.
GMAC loosens credit to make vehicles easier to buy

Detroit-based GM said it was offering zero-percent or low-interest financing on some slower-selling 2008 and 2009 models over the next week — a promotion made possible by the billions provided to GMAC.

The economic solution to people not paying off loans, loan more money to higher risk people at 0%, that will make a bank financially viable.

Someone wake me up when the sanity starts

Recession, yes or no?

Reading today’s local paper I am not sure if we are in a recession or not.

On one hand there is an article on the paper about how poor sales are and retailers are hurting.
Last few days before holiday ‘make or break time’ for some retailers

The National Retail Federation reported on Monday that more than 41 million people had not started holiday shopping, and those that had were further from being finished than they usually are by the third week of December. In New York, 60 percent of merchants surveyed by the Retail Council of New York State said their sales in the past two weeks were below their sales last year for the same period.

On the other hand there was a traffic jam leaving a local mall yesterday. I was at this mall area about noon on Saturday and the traffic was heavy and there very few empty parking spots and there was a line of cars waiting to enter the mall.

Traffic crawls at Victor mall

Traffic jams plagued Eastview Mall in Victor on Saturday night, with delays of up to three hours reported, according to the Ontario County Sheriff’s Office.
The cause: an unusually large influx of last-minute shoppers.
“It’s just volume-related,” said sheriff’s Sgt. George Killian. “(The traffic) is the worst that I’ve ever seen it up there, and I’ve been on the job 25 years.”
The 911 dispatch center was overloaded with calls reporting the backup.
Eight to 10 deputies controlled traffic at Route 96 and High Street and at Route 96 and Turk Hill Road.
Mall security officers patrolled the parking lot, where no serious incidents were reported, Killian said.
Delays were down to less than an hour as of 7 p.m.

Which is it, terrible sales or huge traffic jams at the mall because so many people are shopping?

Since I can see the huge lines at the store checkouts and the people waiting to enter and exit the parking lots I will go with the latter that the sales are not as bad as the whining that is occurring.

Maybe the retailers are setting themselves up to ask for a bailout from the Obama administration, retailers are an important cog in the US economy. Having them close would be catastrophic to the economy just like the mortgage brokers, banks, insurance companies, auto companies, etc… they need a government loan to get them through the lean times.

Bush the Socialist bails out auto giants – sort of

Michelle Malkin has it right.
George Bailout Bush drives the final nail in his coffin

This is a punt into the Obama administration.

This is better than just giving money away, let the giving of the money be left to the democrats who have all the power and answers in 2009 but it is not as good as saying it is time for tough love.

If the time for touch love is only when times are good then it is not tough love is is spinless wishy-washiness without any convictions or principles.

saving, paying your bills on time, fed says you are a fool

Fed Cuts Rates, Punishing Thrift, and Impoverishing Savers

The Fed’s rate cut will also have the effect of reducing already very low interest rates on savings accounts, costing savers money. Not only is your bank interest rate less than the inflation rate, eroding the value of your savings, but to add insult to injury, you have to pay income tax on the insultingly-low interest, too.

The Fed’s action misdiagnoses the cause of the financial crisis. Banks aren’t refusing to lend money because interest rates are too high — they’re refusing to lend because they are afraid they won’t be paid back. The Fed’s irresponsible actions lend weight to such fears.

The Fed’s action, which is partly intended to prop up overextended borrowers by reducing their interest payments, sends the message that the government will protect such borrowers from the consequences of their own overspending and recklessness, regardless of the cost to others.

For those of us who live within our means and try to be honest are being destroyed by our socialist government.

Fed slashes key rate to near zero

But the Fed said in a statement that it is looking at different steps it can take to stimulate the economy and keep market rates low, including the purchases of long-term U.S. Treasury notes. The Fed also said it will consider other, yet to be disclosed moves as well.

Someone needs to explain this to me, I must be to stupid to understand.

Is this really what Bernanke (the Fed) is saying, if needed in the future we are going to simulate the economy by having the fed (which prints money backed by U.S. taxpayers) by buying U.S. treasury notes which are backed by the U.S. taxpayer.

Am I the only one who thinks this is would be a bigger Ponzi scheme than Madoff pulled off with his hedge fund.

more Bailout Fallout – America is in deep trouble

Bush defends government rescue of Citigroup

Let’s see what the bailout has gotten America.

The financial commitments of the taxpayers:
Current lawful debt ceiling is $10 trillion (not counting money “borrowed” from social security), outside of the lawful debt the FED has committed to backing up to $7.4 trillion in additional securities.

The US GDP in 2007 was ~ $11.5 Trillion dollars.

Think about this, the US has committed to repay of 150% of one years GDP and these are our financial leaders who know how to make things better. No sane person would be allowed to carry 150% of a years salary as debt. Well I guess that is what got the banks into this mess, thinking there was sane people in control and not loading money to people which has no chance of being paid back.

So the great plan of Bernake, Paulson, Bush to be continued by the Obama administration as he states in his press conference.

President-elect Barack Obama pledged Monday to honor the commitments the outgoing Bush administration has made to rescue financial markets and urged the new, incoming Congress to pass a major stimulus package “right away” to restore growth and create jobs. ….
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President-elect Barack Obama tapped New York Federal Reserve President Tim Geithner as his treasury secretary on Monday
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Tim Geithner is part of the FED which has committed the US taxpayer to bail out everyone under the sun that needs money due to their bad business practices and stupidity.

The Obama solution to the US financial problems

He declined to say how big a spending package he wants to revive the economy, but he said, “It’s going to be costly.” Some Democratic lawmakers are speculating about a two-year measure as large as $700 billion.

Just another 3/4 trillion dollars. I guess when you are so far in debt that there is no hope to ever pay off your bills, keep borrowing (printing money that will turn out to be worthless) as long as people are stupid enough to loan it to you.

Currently
17.4 trillion dollars in commitments, 300 million people = $58000 per person.
Average US salary in 2008 = $44900
Every US person that is alive owes more money that they earn by 30% of a years salary.

If Obama and the democrats have a $700 billion stimulus, the per person average goes to $60333. I am sure everyone salary will go up enough to cover this increase.

One of the best lines I have read to date is from (Bloomberg news)

Requiring the Fed to disclose loan recipients might set off panic, said David Tobin, principal of New York-based loan-sale consultants and investment bank Mission Capital Advisors LLC.
‘Mark to Market’
“If you mark to market today, the banking system is bankrupt,” Tobin said. “So what do you do? You try to keep it going as best you can.”

Translation, the America People are to stupid to be told the truth since we (government and bankers that caused the problem) know better than them what to do with their money.

The American people will be paying for this stupid spending spree for a long time or the country will go so far down that there will be no America left.

Someone in government stop the insanity,one can’t spend or borrow your way out of debt.

Continuing the Bailout – Bad for America

1) American Express wants a bailout to write off delinquent credit card debt. (I have an idea do not give credit cards to people who can’t pay the bill.) The Government should tell AMEX, NO. Please someone stop the insanity. Does this mean the people who have not paid their bill do not have to? Where is the responsibility, why do the taxpayers have to cover a businesses losses for loaning people money who will not pay the loan back.

2) Barney Franks want to give the auto companies $25 Billion but only is the government can take ownership of preferred stock. I guess I was wrong, I thought the democrats would be more subtle than just basically saying, OK we will buy your failing business and run it ourselves. Can anyone stop the government from taking over the auto companies? I hope someone rescues America from itself.

3) http://blogs.abcnews.com/theworldnewser/2008/11/want-some-gover.html
Hank Paulson now admits the bank bailout (TARP) has not worked and he is changing tactics. He says he knew before the law was passed and signed that everything he told congress was no longer true and that the bank bailout would not work but he took 4 to 5 weeks and about 1/2 the money gone to make this public, nice. Since this man knowing did not correct the now false statements he made to congress before they voted to hand him a check for $700 Billion dollars with no rules or oversight can he be prosecuted for misleading congress and the American people. I guess this is more of the ends justifying the means.

4) http://www.bloomberg.com/apps/news?pid=20601087&sid=axpH4Qil0NT8&refer=worldwide
The Fed has given $2 Trillion dollars of American taxpayer money to who knows for no know real assets. This is on top of the $700 Billion congressional approved bailout. What do you expect when you give 2 men the ability to write check with no oversight due to needing to do things fast.
Bernanke and Paulson make the most dishonest used car salesman and ambulance chasing lawyers look like honorable and honest citizens.

FEDERAL GOVERNMENT PLEASE STOP LYING TO YOUR EMPLOYER (ME THE VOTER).

I do not care if Paulson will be gone after Jan 20th, he should be asked to resign now and Bush and congress should demand Bernanke resign. They have both knowingly lied to the American people and should no longer be trusted with our money.