It should come as no surprise that what we have been pointing out all along- that the larger TARP recipients were strong-armed and the process was amateur hourish- is less than just a speculation anymore. *Duh* Not even to mention the imperial asston of arbitrary involved in deciding amounts required to “assure stability.” ($25, no, how about $10 billion to Goldman… we bet Bald does the New York Time crossword puzzle with a pen too. Now that we think of it, we don’t see Lloyd’s initials next to any of these handwritten corrections).
This should entirely change the tenor of discussions, and give the lie to the farce that was demonization of TARP participants by the likes of Barney Frank. Think for a minute how off the wall it is to repeat something like “Don’t like it? Don’t take government money” given the current offer-you-can’t-refuse “revelations.” Again, this should change the tenor of the discussion. But, of course, it probably won’t.
Finance is a convenient scapegoat for the political class. The conspicuous excess with which we have all comported ourselves (shamelessly in some cases) invites scrutiny when the boom times end. Not to mention the fact that the complexity of the business invites simple answers to difficult questions like: “How did you people fuck this up so badly?” In this context it should be unsurprising that the general public and its high school economics education feels qualified to assert that Greenspan’s self-defense arguments are bunk. How is it you expect to be immune from the scrutiny of the financially illiterate? (As an aside, do we think that constituency is concentrated more heavily in the backyard of Barney Frank, Barbara Boxer or Maxine Waters?)
Judicial Watch, the public interest group that investigates and prosecutes government corruption, announced today that it forced the Obama administration to release documents about the October 13, 2008, Treasury Department meeting that coerced major banks to allow the government to take $250 billion equity stakes. Among the other news, the documents confirm former Treasury Secretary Hank Paulson told the CEOs of nine major banks that they had no choice but to allow the government to take equity stakes in their institutions. The documents show Obama Treasury Secretary Tim Geithner, FDIC Chairman Shelia Blair, and Fed Chairman Ben Bernanke co-hosted the meeting with Paulson.
Judicial Watch Forces Release of Bank Bailout Documents [Judicial Watch via Clusterstock]
Maxine Williams? You mean Maxine Waters?
Everyone know Hank put Vik in a headlock when he started asking questions. Heard he even chopped Dimon in the throat for talking out of turn.
Just what I heard.
Love the pic!
“Fuck you say about my momma?”
@1-
You’re right of course. Thanks.
BF, BB, or MW?…all of the above.
And while you’re at it
“qualified to assert Greenspan’s”
-Senior VP of Hall Monitors, Inc.
What would I do without you guys?
Actual transcript from the meeting:
Vik: Lloyd, that man over there is talking to himself. See that scary guy over there?
Lloyd: He’s a very scary guy.
Vik: Well, who is he? What’s his name?
Lloyd: His name is Neel Kashkari — and he helps Paulson out sometimes.
GLad to see we’ve migrated to the imperial scale in terms of asstons.
This is a total non-issue, as I think you’re alluding. The plebs don’t know/care about the implications of these revalations, and the MSM no-doubt will offer little, if any, coverage of the matter.
Either Hank just caught wind of Ken Lewis’ Boones breath or he is constipated.
You decide.
-TGFH
Yes, if they hadn’t been forced to take the money at below market rates, they could have just waited to be told they were in violation of their charters and forced into receivership. That dastardly government forcing banks to maintain minimum capital ratios. How dare they.
Bald: I have enough hair on my ass to weave an Indian blanket and you have the nerve to ask whether or not you have to take this money?!!
OK, so does this mean it turns out that the entire financial system wasn’t on the brink of collapse, after all? It was all a hoax by the Bush administration to give the banks a bunch of money?
I thought the whole problem was that none of the too-big-to-fails wanted to admit they had a problem, so the gov’t came in and said ‘OK, you’ve all got to admit you’ve got a problem at the same time’ Hence the ‘Take it or you’re fucked’ process…
Am I hallucinating?? I could have sworn that an ultimatum like this was ‘baked in’ to the original news that the banks had to take the money ‘or else’… Now DB is telling us that it is a scandal of some sort??
Disclosure: not a banker, just wandered in off the Yahoo boards…
repost
http://www.nytimes.com/2008/10/15/business/economy/15bailout.html
@10
While the poors will not notice or care about this, it is a HUGE deal. Handwritten amounts to be taken? Jesus H. Christ.
@15, thanks, I guess I had seen this before
@16&10 OK I’m poor and clueless… and the thread is getting old, but why on earth does it matter if the numbers were arbitrary?? the whole thing was theater anyway, right? The markets were saying ‘these guys are going down’ and the gov’t had to come in and say ‘not so fast’… Where were the numbers going to come from if not someone’s ass?
@17
The fact that the government has a controlling interest in our largest financial corporations is a very serious problem. The first 50 years of our history were characterized by duels between those who wanted to establish a federal bank and those who did not. That such a controlling stake in these banks was made in a strong armed manner is worrying. The fact that they have not been allowed out is also frightening.
The government has focused its actions on propping up these institutions to perpetuate false prosperity. This is a serious issue. Government funds would have been better used dealing with the failures of the institutions, cleaning up their assets and reselling them to private investors. Creative minds could have thought of significantly better solutions to deal with the “shadow banking” system in the aftermath of these institutions falling. Allowing these banks to fail would have facilitated the creation of a more sound financial system and would have allowed real recovery to precipitate. Alas, this was not done (much as was done with GM and others over the last 50 years).
That would have been the logical, apolitical solution to this crisis. Rather, we have quite the opposite occurring. Therein lies the problem.
You know, whatever, fuck it, drink beer and chase pussy. None of us are in a position to do anything and those in a who are in a position to implement real change favor the system as is (they derive power from it).
some of us have been saying this all along–about the fact that poor wording misleads people and that most of these banks did not need the money and certainly, most certainly, a bank with a 135 billion dollar cash reserve did not need to be “bailed out” with 10 billion dollars. but oh didn’t it feel good on the part of the dim-wits to be slinging mud and hatin’ a company that somehow always has the intellectual capital to do well? and who listened? or cared? when the faint voices of reason tried to point of all of this out as early as november and throughout?
Thanks, at least i’ve got the drinking beer and chasing pussy part figured out… I always wondered if I’d made the wrong decision.
To big to fail. Systemic risk. Collapse of the financial system. Martial law.
We don’t need your money yet we cant afford to not take it because if the truth actually got out we’d be just as fucked as the rest.
If the god honest truth was that they didn’t need it then they would have been in a position to refuse it and speak the truth. They where not.
We’d all be better off if we had just got it over with and allowed the businesses that had gotten themselves intertwined with this mess to face the consequences of their actions. Then we would have a much better idea of the true position of these banks by now and the taxpayer would be trillions better off. The people who would have lost out would have one way or another deserve what they got. The market would have dealt with this in a much fairer way then the government under the advice of bankers.
Now we have just added another layer of obfuscation and started blowing up the next bubble. The fatally flawed bubble which allows eye watering amounts of wealth to flow from the productive parts of the economy to the unproductive parts. Not only unproductive but which simply consume wealth. A welfare state where your welfare recipients are rich and the people paying their way are poor.
Anyone who thinks that we are on the road to anything but financial Armageddon in the US clearly does not understand the very fundamentals of economics. If you produce nothing eventually you will have nothing to consume. You can only cook the books for so long. The basic laws of physics don’t change no matter how much you try and pretend they don’t exist or produce rationalizations to explain why they don’t.
We now have a level of debt we can never repay. Is anyone actually capable of understanding this. We can never repay. Particularly as all we have left is an economic system that rewards those who produce nothing of value yet consume so much expecting the few left that produce to cover the costs. Have you notice the number left that produce is reducing at a dramatic rate. Soon we’ll be nothing but a nation of entitled welfare queens all the way from top to bottom.
We missed the chance to set thing back on track when we decided some businesses where too big to fail. Rather then realise the obvious insanity of this belief a few people who think they know better then the people they represent and who don’t seem to realise their job is to represent the people – gave the taxpayers credit card away to an industry the acts like a bunch of pubescent teenagers in almost every respect.
If you ever gave this a try I’m sure you’ll find eventually your card maxed out and you have nothing to show for it. Nothing even to sell and pay that cash back. Certainly nothing that might count as an investment and allow you to increase earning in future the future. You’ll just be drowning in interest payments.
This is the position the US will without a doubt find itself in. Your virtual credit card maxed out and no one left willing to lend. Their will be nothing to show for it. And the interest on your debt will consume our entire GDP.
We’ll then be forced to face up to reality.
Finance, an industry that has turned the most powerful nation on earth into a third world country. Left to its own devices simply lays waste to anything worthwhile whist like some princess arrogantly trots along saying, its all those plebs faults – of course it is – I’m a financial genius of course I am.
@21 — what’s turning usa into a 3rd world country is lack of basic literacy. learn to spell, for the love of god!