Monday, October 27, 2008
The bailout is the biggest overt theft in history. Only healthy banks get funding –so why do they get a bailout? The ‘bailout’ is yet another monumental instance in which ‘wealth is spread around’ to those who do not need it, did not create it, did not earn it, and did not do anything productive to create it! Why doesn’t Bush and his ‘base’ just load up a convoy of armored trucks at Ft. Knox –then drive like hell to the border?
Most big recipients of ‘bailout monies’ are using the ‘bailout’ to gobble up smaller, less favored banks. In simpler times, we might have called them the “Savings and Loan”. In “It’s a Wonderful Life” with Jimmy Stewart, it was called the “Building and Loan”. If you’ve seen this classic film, you will recall that when the Great Depression came, it was the “Building and Loan” that was faced with collapse –not Potter, the richest man in town who sought to own it all.
Several major U.S. banks are leaning toward spending a portion of their federal rescue money on acquiring other financial firms rather than for issuing new loans, the primary purpose of the government’s $250 billion initiative to invest in banks.
About 10 financial institutions belonging to the Financial Services Roundtable, which represents 100 of the nation’s largest financial services firms, are also considering making acquisitions with the money, said Scott Talbott, the group’s senior vice president.
There is a growing consensus among Treasury and other federal officials that allowing healthy banks to use the money to acquire banks in jeopardy of failing could stabilize the economy and bolster confidence in banks. This could also save money for the Federal Deposit Insurance Corp.
Treasury Secretary Henry M. Paulson Jr. confirmed yesterday that some banks may use the capital they receive through the Treasury program to buy weaker banks and that this could benefit the financial system.
Secondly, bailouts are supposed to restore confidence. This ‘bailout’ has had the opposite effect. Bush responses to the ‘crisis’ vary from day to day. As a result, the crisis now feeds upon itself, driven primarily by Bush’s rhetoric and the market’s negative response to it.
Other ‘Presidents’ in other times sought to restore the nation’s confidence. The GOP did the opposite. It subverted ‘confidence’ and tried to exploit the crisis. The ‘healthy’ banks and those already among the nation’s very richest elite are making out like bandits while most Americans face the real prospect of losing their jobs, their homes and, perhaps, even their lives. The GOP doesn’t have a bailout for them. The GOP has a bailout for its base, the richest one percent which owns 90 percent or more of the nation’s total wealth. [See: The L-Curve]
One could start with Paulson himself, whose former bank stands to benefit handsomely from the bailout which he has authored. While at Goldman Sachs, Paulson amassed a personal fortune of $700 million.The list continues:
According to Forbes magazine, Ken Lewis last year brought in a salary of $20.13 million, and his holdings of Bank of America stock are worth an estimated $112 million.
Jamie Dimon received a 2007 Christmas bonus of $14.5 million and holds $190 million in JPMorgan stock.
Lloyd Blankfein received a Christmas bonus of $68 million and his holdings of Goldman Sachs stock were worth $414.5 million last year.
Vikram Pandit received a $165 million signing bonus from Citigroup last year, together with a $2.7 million salary for a few months of work and $48 million in stock options.
John Mack received $41.8 million in compensation last year, and his 2007 holdings in Morgan Stanley stock were worth $220 million.
These firms’ stock, and particularly that of Goldman Sachs and Morgan Stanley, rose rapidly on news of the meeting with Paulson. Goldman stock rose 25 percent to $111 a share, and Morgan Stanley stock rose 87 percent to $18.10 per share.–Global Research, Banks dictate conditions of US Financial Bailout
The very origins of the crash may be found –not on Wall Street but K-street. K Street is best compared to older portions of LA’s Santa Monica boulevard, a less glamorous section of the nation’s movie capital where various ‘talents’ are marketed, bid on and sold. On K-Street, the government whores itself out to major lobbyists by way of its pimps –think tanks, lobbyists, and advocacy groups. The difference is this: on Santa Monica Boulevard, ‘John’ has to pay his own way if he wishes to ‘play’. On K-street, a good time is had by all, but it’s you who gets the bill. When the bill is not paid, the crash ensues.
Am I being unfair to the ‘exiting’ (hopefully) administration? Impossible! It is not possible to express the depths of pure evil this administration has indulged in your name!
First, the $700 billion rescue for the economy was about buying devalued mortgage-backed securities from tottering banks to unclog frozen credit markets.
Then it was about using $250 billion of it to buy stakes in banks. The idea was that banks would use the money to start making loans again.
But reports surfaced that bankers might instead use the money to buy other banks, pay dividends, give employees a raise and executives a bonus, or just sit on it. Insurance companies now want a piece; maybe automakers, too, even though Congress has approved $25 billion in low-interest loans for them.
—Uses for $700 billion bailout money ever shifting
The best evidence that the bailout is a cover for a yet another huge transfer, a ‘spreading around of wealth, to Bush’s ‘base’ may be found in the following letter by the CEO of a so-called ‘healthy’ bank.
There is no panic on Main Street and in sound financial institutions. The problems are in high-risk financial institutions and on Wall Street. …The primary beneficiaries of the proposed rescue are Goldman Sachs and Morgan Stanley. … Treasury is totally dominated by Wall St. investment bankers. They do not have knowledge of the commercial banking industry. Therefore they cannot be relied on to objectively assess all the implications of government policy on all financial intermediaries. The decision to protect the money funds is a clear example of a material lack of insight into the risk to the entire financial system. –John A. Allison of BB&T, A healthy bank’s CEO rejects the bailout: An open letter to Congress
A financial 911? Perhaps! By any name, the Bush crime family in cooperation with the GOP, the MIC, K-street, and Wall Street have just sold out the future every American but those among the very, very, very, very rich.