I’ll try to have another version of this wallpaper up in another color – probably blue – in the near future.
Secret Fed Loans Gave Banks Undisclosed $13B
The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.
The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.
Saved by the bailout, bankers lobbied against government regulations, a job made easier by the Fed, which never disclosed the details of the rescue to lawmakers even as Congress doled out more money and debated new rules aimed at preventing the next collapse.
A fresh narrative of the financial crisis of 2007 to 2009 emerges from 29,000 pages of Fed documents obtained under the Freedom of Information Act and central bank records of more than 21,000 transactions. While Fed officials say that almost all of the loans were repaid and there have been no losses, details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger.
We all knew about TARP. That was the official loan made by Republicans and the Bush administration – there is a movie version of how that went down in Too Big to Fail – where almost everyone comes off looking a little too good – poor beleaguered conservatives Henry Paulson and Ben Bernanke saving the banks and thus the nation from financial collapse. They did, yet they could have attached quite a few strings to the federal bail-out and didn’t. Conservatives – the tea baggers in particular didn’t like TARP for reason they never made clear. Much like their later stance on rising the debt-ceiling they would not so concerned about the collapse of the economy as they were about some murky pseudo-populist trouble making. Liberals were angry about TARP because as the banks and the economy were going down the tubes they saw a bail-out for the elite and nothing for the 99%. I’ve mentioned before that TARP was paid back ( technically) but the banks never really repaid the nation for the real costs. Their well documented semi-Ponzi scheme with derivatives and collateralized debt obligations, or CDOs collapsed, they did not take the down side of that scheme. Naked Capitalism gets into the particulars of how Wall Street, after engaging in deeply immoral behavior, not only got TARP, these newly revealed secret loans, but made scores of money with government or tax payer funds, Quelle Surprise! Banks Lied About Bailout Funds and Got $13 Billion in Profit from Them
So what if the banks paid back loans when the central bank has goosed asset prices vis super low interest rates? That’s a massive tax on savers. And we have the hidden subsidy of underpriced bank rescue insurance. Ed Kane estimates that’s worth $300 billion a year for US banks; Andrew Haldane of the Bank of England has pencilled the annual cost as exceeding the market cap of big banks (and that was in 2010, when their stock prices were higher than now).
The Fed is most assuredly going to have losses. It hoovered up a ton of Treasuries and MBS to shore up asset prices at time when interest rates were already low. The central bank intends to sell them when interest rates rise, to soak up liquidity. Buying when interest rates are low and selling when rates are high guarantees losses. As an old Wall Street saying goes, it’s easy to manipulate markets, but hard to make money from it.
Not my best analogy, but imagine someone deep in credit card debt. By way of considerable sacrifice you loan them what they need to stay solvent. They use that free money to make tons more money and pay you back about 95 cents on the dollar – Wall Street Traders Have Profited More Under Obama Than In Eight Years Under Bush. These same arrogant swindlers, who by the way are now even bigger then before being too big to fail, are now pissed at Democrats and Obama in particular for passing Dodd-Frank financial reform, Schwarzman Backs Romney as Wall Street Turns Away From Obama
Stephen Schwarzman, chairman of the world’s largest private-equity firm, will host a fundraiser for Mitt Romney at his Park Avenue apartment next month, a sign that Romney is closing the sale with Wall Street’s wealthiest donors.
[ ]…Schwarzman, who gave $4,600 to McCain once the Arizona senator had secured his party’s presidential nomination four years ago, has been critical of President Barack Obama’s stance toward Wall Street. In August 2010, he compared the administration’s efforts to double taxes on the income of private-equity firms such as his to “when Hitler invaded Poland in 1939,” according to a New York Post account of a private meeting. He later apologized for the comparison while maintaining his criticism of the tax proposal.Romney and Schwarzman both made their fortunes in private equity, and they came of age during the leveraged buyout movement in the 1980s. As head of the private equity firm Bain Capital LLC, Romney was the lead deal-maker, buying and selling companies to make money for investors. He spent most of his career at Bain and in 2007 estimated his wealth at as much as $250 million.
These leveraged buy-outs were an outrage at the time. Their defenders will sharks like Romney and Schwarzman saved some companies, but they gutted others, leaving many long-term employees, including executives scrambling to find work. This is in the same Wall Street turning to Romney piece. Another reminder of the high level cognitive dissonance of the conservative mind. We all know the government cannot create jobs. Its like reruns of Seinfeld, some conservative is rerunning that jobs-government narrative everyday.
“To the extent anyone is supporting Mitt Romney over President Obama it is because of the state of the economy and the president’s failure to create jobs,” Andrea Saul, a (Romney) campaign spokeswoman, said in an e-mail.
Every time Democrats try to create jobs conservatives stop them and some even cheer for high unemployment.
Georgia Business Declares New Company Policy: ‘We Are Not Hiring Until Obama Is Gone’
A business owner in western Georgia instituted a new company policy recently: “We are not hiring until Obama is gone.”
Bill Looman, who owns U.S. Cranes, LLC in Waco, Georgia, explained that while “I’ve got people that I want to hire now,” he didn’t think he would be able to foot the expense “unless some things change in D.C.”
[ ]….The notion that President Obama’s economic policies preclude small businesses from hiring new workers isn’t the only ludicrous claim Looman pushes. A cursory glance at Looman’s public Facebook page shows he is prone to anti-Obama conspiracy theories. Earlier this month, he posted a false report that Larry Sinclair – the man who claimed he did drugs and had sex with President Obama – had died and implied foul play, writing “MAKES YOU WONDER HUH?” Looman’s page is also riddled with pro-confederate and anti-Muslim postings.
More importantly, Looman’s assertion that he would be able to hire more workers but for Obama’s economic policies defies reason. In the last few months alone, Obama has proposed giving major tax credits to businesses that hire new workers, including a $4,000 credit for hiring the long-term unemployed. Just this week, Obama signed a law to give additional tax credits to businesses that hire veterans.
Looman, if he is making money enough money to pay federal income taxes is paying the lowest rate since the 1960s and President Obama has lowered small business taxes 17 times. I’ve mentioned before that the creation of the Confederacy was an act of treason. If that is the kind of sick twisted patriotism Looman stands for what decent human would want to work for him anyway.
There has to be all kinds of benefits of having two faces, Saturday’s Jon Kyl vs. Sunday’s Jon Kyl
On Saturday, Senate Minority Whip Jon Kyl (R-Ariz.), along with his five other GOP colleagues from the super-committee, wrote a Washington Post op-ed on the debt-reduction process. Kyl’s point wasn’t subtle: he and other Republicans just can’t accept tax increases, at least for the foreseeable future.
Kyl called tax increases “the wrong medicine for our ailing economy,”…
[ ]…That was Saturday. Just 24 hours later, Kyl told a national television audience he’s comfortable with a payroll tax increase on all American workers on 2012.
The No. 2 Senate Republican, Jon Kyl, expressed concern on Sunday about President Obama’s proposal to continue a reduction in the Social Security payroll tax and questioned whether the tax cut had fostered the creation of jobs, as Democrats say.
I think a good case can be made for letting the payroll tax cuts lapse for the long-term health of Medicare and Social Security. Kyl’s not making that argument. he could care less if taxes of any kind are increased on working class Americans. What really puts a knot in his knickers is the mere possibility people like Mittens or Stephen Schwarzman might pay a few dollars more in taxes. Schwarzman probably makes a good portion of his income off capital gains. That’s the soul grinding hard work where the dealers in the Wall Street casino works up a sweat watching all those colored numbers change on the monitor in the executive offices. Kyl is defending the modern equivalent of 17th century French aristocrats who thought the people should be thankful to be ruled by the elite.
Teen tweeter won’t apologize to Sam Brownback ( former senator and now right-wing governor of Kansas)
The Shawnee Mission East senior was taking part in a Youth in Government program last week in Topeka, Kan., when she sent out a tweet from the back of a crowd of students listening to Brownback’s greeting. From her cellphone, she thumbed: “Just made mean comments at gov. brownback,” and then specified what the comments were.
She actually made no such comment and said she was “just joking with friends.” But Brownback’s office, which monitors social media for postings containing the governor’s name, saw Sullivan’s post and contacted the Youth in Government program.
Yet another lesson in conservative economics. Brownback slashed Kansas art programs, but has someone paid to sit around monitoring social media to see what people are saying about him. Brownback belongs to the perennially wacky American Family Association. Among many of their cherished moments in evaluating various news events the AFA said that Sea World Orlando trainer Dawn Brancheau was killed because Sea World did not follow scripture on how to treat animals that have proven to be dangerous. ‘Compassionate Conservative’ Kansas Gov. Brownback Proposes Ending Funding For State Mental Hospital, another great moment for the man who can’t handle criticism. While in the Senate Brownback was so blinded by his hatred of health care reform he tried to filibuster a military spending bill unless health care reform was stopped. Brownback is also a warrior in the great war to defend the richest 1%. One of his first initiatives as governor was to prose a corporate tax cut while imposing a $50 million cut to education spending. Brownback is among the legion of poster boys for conservatism: he has been morally vulgar, a ridiculous specimen of elitist ass kissing, a mind composed of weird superstitious assumptions that battle daily with actual reality and has all the vision of a Nero in his last days. Maybe everyone should be careful about insulting him, it’s a lot like taunting a chimp at the zoo.
It means that, in fact, it’s – whether fascist is the right word I don’t know – More of a plutocracy than anything resembling a democracy; it has become a nation controlled by a very small, very wealthy elite. – Peter Singer
The Long Goodbye 