Posts tagged TARP

“The real dysfunction is a federal budget that doubled in 10 years”

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Source: http://www.againstcronycapitalism.org

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“The real dysfunction is a federal budget that doubled in 10 years”

 

Debt-GOP-Dems-cc-565x531

It’s not that the GOP and the Dems can’t get together on anything that is the problem. It’s that they get together on too much.

 

(From Cato.org)
 
Annual federal spending rose by a trillion dollars when Republicans controlled the government from 2001 to 2007. It rose another trillion during the Bush-Obama response to the financial crisis. So spending every year is now twice what it was when Bill Clinton left office a dozen years ago, and the national debt is almost three times as high.
 
Republicans and Democrats alike should be able to find wasteful, extravagant, and unnecessary programs to cut back or eliminate. And yet many voters, especially Tea Partiers, know that both parties have been responsible for the increased spending. Most Republicans, including today’s House leaders, voted for the No Child Left Behind Act, the Iraq war, the prescription drug entitlement, and the TARP bailout during the Bush years. That’s why fiscal conservatives have become very skeptical of bills that promise to cut spending some day—not this year, not next year, but swear to God some time in the next ten years

Click here for the article.

Image credit: http://www.againstcronycapitalism.org

Why Obama Allowed Bailouts Without Indictments by Janet Tavakoli

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Source: http://libertyblitzkrieg.com

By Michael Krieger

Why Obama Allowed Bailouts Without Indictments by Janet Tavakoli

 

The government’s bailout plan destroyed capitalism. In a capitalist system, those who stood to gain–and already made off with large gains—would have to bear the risk. The bailouts represented a corruption of capitalism. Crony capitalism violates the spirit of democracy established by the Founding Fathers of the republic known as the United States. I expressed these sentiments in a letter to the Financial Times on September 29, 2008.

- Janet Tavakoli

 

The following article by Janet Tavakoli is an excellent reminder of the extraordinarily destructive coup pulled off by financial oligarchs in fall of 2008, when the rule of law was suspended and total theft institutionalized. I have written many times about my experience on Wall Street when the bailouts happened. How I ranted and raved on the trading desk about how TARP marked the end of any semblance of free markets and that there was no turning back. How I was told to “take a walk around the block” to cool off.

All of the suffering and hardships the majority of Americans are experiencing today are directly related to the coup pulled off by the crony financial oligarchs in the fall of 2008, and all of the media and political minions that helped them do it. People realize we have become a Banana Republic and they have now lost all hope. That said, there should always be hope and we can certainly restore society to better days, but not until we remove our domestic cancers from their positions in the highest offices of government, finance and corporate America. That is what we must peacefully achieve.  Now here’s Janet Tavakoli:

In November 2008, President Obama was elected, and he was sworn in January 2009. The country was promised change and reform. Recently two democrats close to the top of President Obama’s administration made excuses to me for the lack of financial reform in the United States. Their separately related versions were remarkably similar, so similar they seemed scripted:

The administration made a bargain, and I’m not sure it was the right decision. The world was teetering on the edge of collapse. There was a crisis of confidence. There would have been unimaginable consequences. So bad even your imagination can’t handle the truth?

It was the lesser of two evils to let a lot of people get away scot free than to risk a collapse in confidence.  There were only two choices according to this narrative.

It was better to let a lot of people get away scot free than to have the first African American president take on the establishment while the country was deeply divided and he needed agreement on big things like ending wars, health care, Supreme Court nominees (and LGBT rights). There were lots of battles without taking on the financial establishment.  It seems to me that reforming our financial system is a big thing. As for at least two of the narrative’s big issues: health care costs are zooming up, and it looks as if we’re rattling our swords for another military conflict.

The president was elected in part on his promise to effect change on the really tough issues, and there was no better time than when the crisis was fresh, and he had a groundswell of popular support.

The most amusing thing about all of this is that people wanted President elect Obama to stick it to the financial oligarchs. Instead, he gave them trillions and offered immunity. More from Janet:

Instead of TARP, handing out money to cover banks’ losses, we could have forced creditors to accept a restructuring plan. This is what was done during the Great Depression. Creditors, i.e., debt holders including credit default swap counterparties, would have been compelled to accept a restructuring plan. That required partial forgiveness of debt in many cases and/or a debt for equity swap.

 

The government’s bailout plan destroyed capitalism. In a capitalist system, those who stood to gain–and already made off with large gains—would have to bear the risk. The bailouts represented a corruption of capitalism. Crony capitalism violates the spirit of democracy established by the Founding Fathers of the republic known as the United States. I expressed these sentiments in a letter to the Financial Times on September 29, 2008.

Treasury Secretary Henry Paulson Was a Section 8

All of this spells dark times for the future of the republic. On September 20, 2008, at the height of the crisis, Henry Paulson, former CEO of Goldman Sachs, and then the 74th U.S. Secretary of the Treasury, did not merely request immunity for actions he was about to take. In his original draft proposal of the Bailout Plan, he requested imperial powers:

“Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”

Paulson was not an elected official, yet he requested powers that surpassed those granted to any representative of the citizens of the United States.

Section 8 was formerly a type of discharge issued by the U.S. military that meant one was mentally unsuited for service. The spirit of Hank Paulson’s Section 8 continues to dominate the U.S. financial system.

Her full article is here.

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Fiscal Cliff: Middle Class Free Fall, Corporations’ Golden Parachute

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Source: http://newsjunkiepost.com

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Posted Jan 4, 2013

Fiscal Cliff: Middle Class Free Fall, Corporations’ Golden Parachute

Credit: Peter Patau

It seems like everyone who is paying attention to the fiscal cliff debate has an opinion one way or another about the benefits and disadvantages of the Tuesday night passage of the Senate Bill. The compromise that was agreed upon can be described as a barrel filled with pork for both Democrats and Republicans and their corporate sponsors, being that earmarks and tax breaks for corporations are included amongst the illusion of fiscal relief for the middle and lower classes.

Democrats and Republicans and their corporate sponsors, being that earmarks and tax breaks for corporations are included

Credit: Gilbert Mercier

For the left, the tax increases on the super-rich, who make up approximately 0.9 percent of the American population (those individuals earning more than $400,000 or $450,000 per household), was a victory but still managed to fall short of the Obama campaign promise of raising taxes on the top two percent (individuals earning more than $200,000 or $250,000 per household). For the right, the numbers must have added up, seeing as quite a few house Republicans voted in line with the Democrats. This tax increase on rich folks from 35 percent to 39.6 percent will create about $600 billion in revenue over the course of ten years, but with congress’ track record being as shoddy as it is, who knows what programs or misuse it will go to, you know: like the TARP (Troubled Assets Relief Program), where taxpayer money went directly to the banks and CEOs but not to the millions of underwater homeowners that it was designed to assist to avoid foreclosure. But don’t worry, this money will surely not go towards paying down our world-record national debt of $16.4 trillions that was not even addressed by the bill. Economists have predicted that all the expenditure this bill allows will raise the national debt to $20 trillion during the next ten years.

Let us take a look at what else this bill will do to the economy and the American people. For starters, the bill extends for another year Goldman Sachs and Bank of America’s tax break by moving their headquarters to the “Liberty Zone”, a post 9/11 area where the World Trade centers once stood. This tax provision was created to help revitalize Lower Manhattan’s small businesses but instead helped out these two mega-bailed-out banks and helped to subsidize the construction of luxury apartments. Goldman Sachs alone was reported to have received $1.6 billion in tax free financing of its new building.

The Extension of the Active Financing Exception of Sub-part F is a very fancily-worded trade tax loophole; it extends a bill created in 1997 that allows American companies to avoid paying taxes on income from certain transactions called “active financing.” This loophole, a credit of up to $9 billion, basically encourages American companies to move overseas and thus outsource employment from Americans. One of the biggest corporations to abuse this loophole is General Electric (GE).

Goldman Sachs alone was reported to have received $1.6 billion in tax free financing of its new building.

Credit: Peter Patau

FULL STORY

 

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Photographs one and three by Peter Patau. Photograph two by Gilbert Mercier.

Bank of America returns to the scene of the crime

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Source: http://www.southernstudies.org

Bank of America returns to the scene of the crime

Has Bank of America truly changed its ways?

By Phil Mattera, Dirt Diggers Digest

Home buyers beware: Bank of America is returning to the home loan market. According to the Wall Street Journal, BofA is “girding for a new run at the U.S. mortgage business.”

It apparently wants to reclaim a share of the fat profits that rivals such as Wells Fargo have been enjoying from a mortgage refinancing boom sparked by low interest rates. Those profits are particularly tantalizing given the other recent news about BofA: it reported a 63 percent decline in fourth-quarter net income.

Ironically, that plunge in earnings was caused by BofA’s previous screw-ups in none other than the mortgage market, specifically the billions of dollars it has had to pay Fannie Mae to settle charges that it sold the housing finance agency large quantities of faulty mortgage loans it had originated.

In the most recent settlement with Fannie earlier this month, BofA agreed to pay $10.3 billion while also agreeing to sell off about 20 percent of its loan servicing business. The New York Times front page article on the settlement was headlined: “Big Bank Extends Retreat from Mortgages.”

If two major newspapers are to be believed, in the course of just one week BofA went from retreat to advance. By all rights, BofA should not be allowed to perform this about-face.

BofA, including two companies it acquired in 2008, has done so much harm in both the mortgage market and the mortgage-backed securities market that banishment would be the most appropriate punishment.

Let’s look back at the record. In July 2008 BofA completed the acquisition of the giant mortgage lender Countrywide Financial, which was becoming notorious for pushing borrowers, especially minority customers, into predatory loans and was growing weaker from the large number of those loans that were going into default. Later that year, amid the financial meltdown, BofA was pressured to take over the teetering investment house Merrill Lynch.

Merrill came with a checkered history. In 1998 it had to pay $400 million to settle charges that it helped push Orange County, California into bankruptcy four years earlier with reckless investment advice. In 2002 it agreed to pay $100 million to settle charges that its analysts skewed their advice to promote the firm’s investment banking business. In 2003 it paid $80 million to settle allegations relating to dealings with Enron. In an early indicator of the problem of toxic assets, Merrill announced an $8 billion write-down in 2007. Its mortgage-related losses would climb to more than $45 billion.

BofA participated in the federal government’s Troubled Assets Relief Program (TARP), initially receiving $25 billion and then another $20 billion in assistance to help it absorb Merrill, which reported a loss of more than $15 billion in the fourth quarter of 2008. In 2009 BofA agreed to pay $33 million to settle SEC charges that it misled investors about more than $5 billion in bonuses that were being paid to Merrill employees at the time of the firm’s acquisition. In 2010 the SEC announced a new $150 million settlement with BofA concerning the bank’s failure to disclose Merrill’s “extraordinary losses.”

In 2011 BofA agreed to pay $315 million to settle a class-action suit alleging that Merrill had deceived investors when selling mortgage-backed securities. The following year, court filings in a shareholder lawsuit against BofA provided more documentation that bank executives knew in 2008 that the Merrill acquisition would depress BofA earnings for years to come but failed to provide that information to shareholders. In 2012 BofA announced that it would pay $2.43 billion to settle the litigation.

The Countrywide acquisition also came back to haunt BofA. In 2010 it agreed to pay $108 million to settle federal charges that Countrywide’s loan-servicing operations had deceived homeowners who were behind on their payments into paying wildly inflated fees. Four months later, Countrywide founder Angelo Mozilo reached a $67.5 million settlement of civil fraud charges brought by the SEC. As part of an indemnification agreement Mozilo had with Countrywide, BofA paid $20 million of the settlement amount.

In May 2011 BofA reached a $20 million settlement of Justice Department charges that Countrywide had wrongfully foreclosed on active duty members of the armed forces without first obtaining required court orders. And in December 2011 BofA agreed to pay $335 million to settle charges that Countrywide had discriminated against minority customers by charging them higher fees and interest rates during the housing boom. In mid-2012 the Wall Street Journal reported that “people close to the bank” estimated that Countrywide had cost BofA more than $40 billion in real estate losses, legal expenses and settlements with state and federal agencies.

BofA faced its own charges as well. In 2010 it agreed to pay a total of $137.3 million in restitution to federal and state agencies for the participation of its securities unit in a conspiracy to rig bids in the municipal bond derivatives market. In 2011 BofA agreed to pay $2.8 billion to Fannie Mae and Freddie Mac to settle charges that it sold faulty loans to the housing finance agencies.

BofA was one of five large mortgage servicers that in early 2012 consented to a $25 billion settlement with the federal government and state attorneys general to resolve allegations of loan servicing and foreclosure abuses. Six months later, an independent monitor set up to oversee the settlement reported that BofA had not yet completed any modifications of first-lien mortgages or any refinancings.

Earlier this month, BofA was one of ten major lenders that agreed to pay a total of $8.5 billion to resolve claims of foreclosure abuses. Finally, as noted above, BofA agreed to pay $10.3 billion in a new settlement with Fannie Mae.

BofA claims that it has cleaned up its act, but it is difficult to believe that a bank so closely identified with predatory lending and investor deception has truly changed its ways.

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Note: This piece draws from my new Corporate Rap Sheet on Bank of America, which can be found here.

Ron Paul Delegates Speak OUT! RE: RNC/GOP Corruption 2012

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Published on Sep 2, 2012 by

While we were in Tampa, Florida on August 26, 2012 we ran across several Ron Paul delegates who offered to share their experience with the GOP corruption that has been ongoing this year.

 

Gerald Celente on Eurozone Reckoning Day and how Goldman escapes charges!

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Welcome to Capital Account. After its yearlong investigation, the Justice Department said that it will not bring charges against Goldman Sachs or any of its employees for financial fraud related to the mortgage crisis. Is this justice or, as Gerald Celente often says, is this “just us” big bankers getting away with whatever we want?

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Four Horsemen of the Apocalypse: Fossil Fuel, Nuclear Fission, Central Banking, War

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Source: http://www.activistpost.com

By Rand Clifford

Four Horsemen of the Apocalypse: Fossil Fuel, Nuclear Fission, Central Banking, War

Dees Illustration http://ddees.com/

Sense those hooves pounding around the world?

Little surprise that these four bedfellows have in their reins the fate of humanity, even life on Earth. Profit and conquest are all that matter; there is no such thing as enough, only, more.

King Coal’s aerosols leave hardly a place on Earth free from coal-fired power plant mercury pollution. Even fish in the most “pristine” waters are all tagged by coal. The majestic bluefin tuna, world’s most valuable fish—high in the food chain guarantees high mercury. Pacific bluefin tuna…an ultimate posterfish for the biosphere? Fished to the brink of oblivion, survivors radioactive.

Fukushima is a volcano of radioactivity in the most seismic region on Earth; fresh tremors promise eruptions setting new standards for the term, “cataclysmic”. We really are pushing into new frontiers, where numbers quantifying the menace at Fukushima seem more suited for cosmology.

Latest word from corporate mouthpieces of the elite: “Ssshhhhh. Don’t worry, be happy.”

Mix in the perpetual debt machine of Rothschild-controlled central banking (Bankula), and if the biosphere functions long enough, inevitably, Bankula will own everything from the ionosphere to the Mariana trench. The whole planet. It’s all been set up that way, plans laid long ago, executed over centuries.

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Still Voting Romney or Obama? Not After This Video! RONY 2012!

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Source: http://jana-murray.com

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My gift to the Dare County Republicans, North Carolina. Hopefully the simplicity of this blog post my reach your apathetic and dangerous view point of the world in which you have played your role flawlessly. Watch if you “DARE” to WAKE UP!

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You’ve heard about Kony 2012…Well This is a REAL MOVEMENT!
It’s a shame that “the presidential nominee with the most money” is the one who has the best chance to win….This movement is to shatter that….

THIS IS TO RAISE A MASSIVE AWARENESS ABOUT RON PAUL WORLDWIDE!

ALSO LIKE ON FACEBOOK http://www.facebook.com/pages/RONY-2012-Movement/435181543172621

JOIN THE EVENT ON FACEBOOK AT http://www.facebook.com/events/239961552783547/

INVITE ALL OF YOUR FRIENDS!!

THOSE ON TWITTER FOLLOW AT https://twitter.com/#!/ronywins2012

MAKE TREND #RONY2012 #RONPAUL2012 #WHATISRONY #RONYWINS2012 #TEAMRONY

IMPORTANT! We must get this out before the next states Vote!
The Voting schedule is this…

May 29, 2012 Texas For 155 Delegates

June 5, 2012 California For 172 Delegates
Montana For 26 Delegates
New Jersey For 50 Delegates
New Mexico For 23 Delegates
South Dakota For 28 Delegates

June 26, 2012 Utah For 26 Delegates

 

Romney Obama the Same?

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Published on Apr 23, 2012 by

Comparing side by side the words and political stances of Republican and Democratic presidential candidates Mitt Romney and President Barack Obama. Includes topics like universal health care, gun rights, energy, NDAA, the Patriot Act, Iran, sanctions, economic stimulus. bank and auto bailouts, civil rights, TARP, the Federal Reserve, Ben Bernanke, campaign donations, and more. Thanks for watching & please share! Compiled with videos from news, interviews, rally footage, and more, IN COMPLIANCE WITH THE FAIR USE ACT.

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[CIM]

Hmmm, so do we even have a “choice”?

The time is NOW to take back our personal liberties and freedoms!
Ron Paul 2012: Restore America Now

http://www.ronpaul2012.com

Please visit Ron Paul’s official campaign site by following the link below and donate today!

 

The 16 Trillion Dollar Bailout The Federal Reserve Handed To The Too Big To Fail Banks

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Source: http://theeconomiccollapseblog.com

Have You Heard About The 16 Trillion Dollar Bailout The Federal Reserve Handed To The Too Big To Fail Banks?

Federal Reserve photoWhat you are about to read should absolutely astound you.  During the last financial crisis, the Federal Reserve secretly conducted the biggest bailout in the history of the world, and the Fed fought in court for several years to keep it a secret.  Do you remember the TARP bailout?  The American people were absolutely outraged that the federal government spent 700 billion dollars bailing out the “too big to fail” banks.  Well, that bailout was pocket change compared to what the Federal Reserve did.  As you will see documented below, the Federal Reserve actually handed more than 16 trillion dollars in nearly interest-free money to the “too big to fail” banks between 2007 and 2010.  So have you heard about this on the nightly news?  Probably not.  Lately Bloomberg has been reporting on some of this, but even they are not giving people the whole picture.  The American people need to be told about this 16 trillion dollar bailout, because it is a perfect example of why the Federal Reserve needs to be shut down.  The Federal Reserve has been actively picking “winners” and “losers” in the financial system, and it turns out that the “friends” of the Fed always get bailed out and always end up among the “winners”.  This is not how a free market system is supposed to work.

According to the limited GAO audit of the Federal Reserve that was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the grand total of all the secret bailouts conducted by the Federal Reserve during the last financial crisis comes to a whopping $16.1 trillion.

That is an astonishing amount of money.

Keep in mind that the GDP of the United States for the entire year of 2010 was only 14.58 trillion dollars.

The total U.S. national debt is only a bit above 15 trillion dollars right now.

So 16 trillion dollars is an almost inconceivable amount of money.

But some other dollar figures have been thrown around lately regarding these secret Federal Reserve bailouts.  Let’s take a look at them and see what they mean.

$1.2 Trillion

A recent Bloomberg article made the following statement….

The $1.2 trillion peak on Dec. 5, 2008 — the combined outstanding balance under the seven programs tallied by Bloomberg — was almost three times the size of the U.S. federal budget deficit that year and more than the total earnings of all federally insured banks in the U.S. for the decade through 2010, according to data compiled by Bloomberg.

The $1.2 trillion figure represents the peak outstanding balance on these loans, not the total amount of all the loans.  On December 5, 2008 the “too big to fail” banks owed this much money to the Federal Reserve.  Many of them could not pay these short-term loans back right away and had to keep rolling them over time after time.  Each time a short-term loan got rolled over that represented a new loan.

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