tagged w/ Bailout
Uploaded by TruthSquadTV on Aug 8, 2011
On June 22nd Xander and I decided to hold a last minute End The Fed rally on Wall St. When we got there about 40 police were waiting for us.
If you would like to make a donation to help us purchase 10,000 "bernanke bucks" flyers to be distributed in NYC in the months leading up to the End The Fed Rally in November please click here! http://10kendthefedflyers.chipin.com/10k-end-the-fed-flyers
you can also purchase high quality glossy "Bernanke Bucks" or download them and print them yourself @
http://www.TheEconomicCrisisWasAnInsideJob.comUploaded by TruthSquadTV on Aug 8, 2011 http://truthsquad.tv/?p=731 On June 22nd... more
It's often hard to define with precision when the beginning of an end is reached. In many instances, and certainly in the case of the Euro and its zone, it's really inconsequential. The only thing that truly counts is that after yesterday's contortionist €159 billion Greek bail-out 2.0, there is no way back to a healthy currency, or an economically viable region to use it in, for that matter.
But the markets are up, you say! Yes, of course they are, because they were just handed access, in the form of a "reformed" European Financial Stability Facility (EFSF) to potentially trillions of euros worth of European taxpayers' money. And even though they're well aware that it's all just temporary, for today - and maybe tomorrow- their profits are guaranteed. So of course they're up. For now.
There's no serious investor, however, who’ll dive in for the long, or even the medium, term. The message that emanates from the hastily broken vows and neglected solemn pledges by the major players in Europe does nothing to restore confidence in either Greece, Ireland or Portugal. In fact, it does the exact opposite. If there had been any chance at all that Greece could have paid off its debts, the terms of the present deal would not be what they are. What it all spells, going forward, is increasing volatility. Which suits the most savvy players just fine, thank you.
Europe is, of -financial- necessity, sliding towards a fiscal and subsequent political union (and yesterday was a big step). A union that has zero chance of being accepted by its members. That is how we recognize that this is the beginning of the end. Without the extended powers of the EFSF, an outright Greek default would have been unavoidable. With the revamped facility, there can be a few more months (or is it even just weeks?) of pretending. And then, German, Dutch and/or Finnish voters will hammer it down.
It's still nothing but the same old same old: a severe bout of insolvency that is being treated as if it were as simple case of illiquidity. All bail-outs on both sides of the Atlantic carry this signature. And for good reason: they deal with bankrupt entities, banks in the one instance, countries in the other. Whatever the differences may be, that common feature trumps them all.
The markets -represented where the PIIGS are concerned by the bond vigilantes- are kept satisfied for a vanishingly fleeting moment, and everyone prays the quiet will last. But then it never does. The PIIGS are bankrupt. They will never be able to pay back their debts, and it makes little difference whether these are public or private. There's so much blood in the -Mediterranean- waters (and the Irish Sea) that the sharks are certain to remain where they are, restlessly swimming. There's simply too much money to be made.
The changes to the EFSF are presented by the big kahunas as tokens of strength and solidarity. But they're just a charade. Everybody knows the truth; at least everybody who plays at the big kahuna table, while the ones who don't know are forced to pick up the bill. After all, as Simon Jenkins writes in the Guardian: "Power always wins, so long as it can get someone else to pay".
The US has its own contorted compromise. Bernie Saunders, Senator for Vermont, writes: The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression. Not even the EFSF will get that far anytime soon. we may presume.
It's somewhat funny that both sides of Congress and the Senate, as well as the White House, have now spent months rolling over the floors, jockeying for election position in the debate over the debt ceiling. Which, though incomprehensibly large as it already is supposed to become, is nevertheless still smaller than just the secret loans the Federal Reserve has handed out over the past few years alone.
Contorted, convoluted, con artists. They're gutting our futures, and those of our children. We elected -most of- these fine folk. And it's up to us to get rid of them.
http://theautomaticearth.blogspot.com/2011/07/july-22-2011-contortionist-compromises.htmlIt's often hard to define with precision when the beginning of an end is reached.... more
sound familiar? 80,000 take to the streets to protest the corruption and fraud of corporations, banks, and the sell out of both political parties to bank and corporate interests. Why do people have to suffer for the fraud and criminality of the banks and corporations?
http://www.youtube.com/watch?v=8DMXCvVCi44sound familiar? 80,000 take to the streets to protest the corruption and fraud of... more
What is fair market value for the services that states and counties provide to banks to foreclose on us?
Amid reports of record profits and record bonuses in the billions for Wall Street bankers, middle class citizens mourn the loss of 8 million jobs, millions of foreclosures and the looming bankruptcy of our counties and states.
As Wall Street bankers toast to their "success" and great fortune acquired by our loss; as they "celebrate", one might wonder how we might possibly get that money back.
Let’s see... what do we control that Wall Street bankers want – in fact need?......
Through state taxes we finance the court systems that Wall Street banks use to collect our properties (foreclose); and through property taxes, local property owners finance county sheriff departments that enforce collection (evictions). These appear to be essential services for Wall Street banks and a possible untapped revenue source for states and counties. What would national mortgage servicers do without these services?
What is fair market value for these services?
Perhaps if we asked nicely they would offer to contribute more? No?
#1 Privatizing Municipal Court Overhead – $25,000 Foreclosure Filing State Surcharge Proposed
Based on their obscene glut of profits and bonuses and our states and communities facing bankruptcy, clearly we’re not charging enough. Of course they could choose to not pay the $25,000, which would stop foreclosures dead in their tracks. Nice. But Citibank, BofA, Wells Fargo, etc., shareholders might prefer to use that bonus money to recover shareholders’ assets instead.
This new revenue could be used to subsidize community banks to make well collateralized loans for citizens to buy back foreclosed homes (based on the appraised value after foreclosure) at affordable monthly rates, sticking Wall Street with the 20-40% equity loss they created, as well as the $25,000 fee, and slowly but surely states would regain control of their own land and property again. In addition to saving citizens’ homes and balancing budgets, perhaps this could also build a firewall of protection from what appears to be an increasingly unregulated, predatory national investment banking system.
#2 Privatizing Sheriff Department Overhead – $5,000 Eviction County Surcharge Proposed
Sheriff Departments act as collection enforcement agencies for Wall Street bankers by conducting foreclosure evictions and Sheriff sales of properties. Financed through property taxes, we pay for our own evictions. Why? While laying-off Deputies in counties facing bankruptcy, how can County DA’s, Sheriffs and our state legislature justify appropriating any resources to service the collection of "assets" on behalf of out of state Wall Street Banks free of charge – or anything short of "fair market value"?
What This Strategy Could Mean For Oregon and Other States
In 2009 Oregon reported about 34,000 foreclosure filings. If half of them result from Wall Street Banks that would be $425 million per year coming back into Oregon community banks and $85 million/year for our counties, all of which would barely put a dent in Wall Street bonuses (3%?), however, multiplied by 50 states it could cost Wall Street banks $25 billion, or more. Sound familiar? How much were their 2010 bonuses again? Pooof. Are we getting a warm fuzzy yet?
We will likely need exemptions for local income property/lien-holders, ie., these fees only apply to entities that conduct more than "x" number of foreclosures per year. Or perhaps the distinction between a holding bank and a holding/investment bank could be where to draw the line; or perhaps geographic location of headquarters could be where to draw the line. Certainly their would have to be regulations including no passing this cost through and if you fail to keep lending, you lose your license.
This could be accomplished should we enact Political Finance Reform.
Recent reports reveal that Wall Street Banks make more money by foreclosing on loans rather than by servicing them! That would explain nefarious robo-foreclosure assembly lines ensnaring homeowners who can’t get a straight answer from lenders while desperately trying to refinance, even homeowners who are current on their payments. At any time anyone could be forced to defend themselves from wrongful foreclosure practices, a time consuming and expensive proposition where, reportedly, you’re guilty until you prove your innocence. Perhaps this strategy could also help stop that crap too.
If it’s possible for Wall Street Banks to unethically game the system to steal from us and hold us hostage, then it must be possible to get ethical legislation that will protect us from overly aggressive, apparently insufficiently regulated foreclosure practices and to, at the very least, equitably share in the expense of our own demise.
"Free Market Capitalism" should work both ways, don't you think?
______________________What is fair market value for the services that states and counties provide to banks... more
Contrary to all the rosy reports about the car companies paying back all of the money, the Obama administration reveals that the taxpayer will lose about $14B on the auto bailouts.
http://news.yahoo.com/s/ap/20110601/ap_on_re_us/us_obama_autos_2Contrary to all the rosy reports about the car companies paying back all of the money,... more
"Pull down your pants folks, the worst has just begun!!!"
...A plummeting dollar is hitting Americans squarely in the wallet and gas tank, and economist think it could drive prices as high as $6 a gallon or more by summertime. We are already paying much more for groceries and other consumer goods than we did a few years ago.
Can FED policy be DISRUPTED (before it bankrupts everyone?)
Inflation is a direct result of the actions the Federal Reserve has taken to pump liquidity into the market. The Fed has lowered their target lending rate, known as the Federal funds rate, to near zero....
READ MORE HERE-
http://generalstrikeusa.wordpress.com/2011/05/13/how-to-end-the-fed-for-dummies-pt-3-of-3/...A plummeting dollar is hitting Americans squarely in the wallet and gas tank, and... more
WASHINGTON -- A set of confidential federal audits accuse the nation’s five largest mortgage companies of defrauding taxpayers in their handling of foreclosures on homes purchased with government-backed loans, four officials briefed on the findings told The Huffington Post.
The five separate investigations were conducted by the Department of Housing and Urban Development’s inspector general and examined Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial, the sources said.
The audits accuse the five major lenders of violating the False Claims Act, a Civil War-era law crafted as a weapon against firms that swindle the government. The audits were completed between February and March, the sources said. The internal watchdog office at HUD referred its findings to the Department of Justice, which must now decide whether to file charges.
The federal audits mark the latest fallout from the national foreclosure crisis that followed the end of a long-running housing bubble. Amid reports last year that many large lenders improperly accelerated foreclosure proceedings by failing to amass required paperwork, the federal agencies launched their own probes.
The resulting reports read like veritable indictments of major lenders, the sources said. State officials are now wielding the documents as leverage in their ongoing talks with mortgage companies aimed at forcing the firms to agree to pay fines to resolve allegations of routine violations in their handling of foreclosures.
The audits conclude that the banks effectively cheated taxpayers by presenting the Federal Housing Administration with false claims: They filed for federal reimbursement on foreclosed homes that sold for less than the outstanding loan balance using defective and faulty documents.
Two of the firms, including Bank of America, refused to cooperate with the investigations, according to the sources. The audit on Bank of America finds that the company -- the nation’s largest handler of home loans -- failed to correct faulty foreclosure practices even after imposing a moratorium that lifted last October. Back then, the bank said it was resuming foreclosures, having satisfied itself that prior problems had been solved.
According to the sources, the Wells Fargo investigation concludes that senior managers at the firm, the fourth-largest American bank by assets, broke civil laws. HUD’s inspector general interviewed a pair of South Carolina public notaries who improperly signed off on foreclosure filings for Wells, the sources said.
The investigations dovetail with separate probes by state and federal agencies, who also have examined foreclosure filings and flawed mortgage practices amid widespread reports that major mortgage firms improperly initiated foreclosure proceedings on an unknown number of American homeowners.
The FHA, whose defaulted loans the inspector general probed, last May began scrutinizing whether mortgage firms properly treated troubled borrowers who fell behind on payments or whose homes were seized on loans insured by the agency.
A unit of the Justice Department is examining faulty court filings in bankruptcy proceedings. Several states, including Illinois, are combing through foreclosure filings to gauge the extent of so-called “robo-signing” and other defective practices, including illegal home repossessions.
Representatives of HUD and its inspector general declined to comment.
http://www.huffingtonpost.com/2011/05/16/foreclosure-fraud-audit-false-claims-act_n_862686.htmlWASHINGTON -- A set of confidential federal audits accuse the nation’s five... more
Matt Taibbi and Elliott Spitzer discuss how hundreds of millions of bailout dollars was given by wealthy bankers to their wives in non-recourse loans to start what amounts to a phony financial transaction business, yielding massive profits at no risk.
The bankers' and their wives' taxpayer-financed lifestyles "of the rich and famous" is more specifically described here, along with where some of the money likely went:
http://www.businessinsider.com/the-real-housewives-of-wall-street-christy-mack-and-susan-karches-took-talf-loans-2011-4Matt Taibbi and Elliott Spitzer discuss how hundreds of millions of bailout dollars... more
Yves Smith-It seems more than a bit peculiar that, per American Banker, financial services industry participants have paid for three academics to issue a lengthy paper attacking a leaked draft settlement between state attorneys general and mortgage servicers. We have pointed out in multiple posts that the state AGs bargaining position is weak due to the lack of investigations. If the banks don’t like the terms, they can tell the AGs to see them in court.
But far more interesting is how embarrassingly bad this paper, “The Economics of the Proposed Mortgage Servicer Settlement,” by Charles Calomiris, Eric Higgins, and Joe Mason, is, yet how the economics discipline continues to tolerate special-interest-group- favoring PR masquerading as research.
In real academic disciplines, investigators and professors who serve big corporate funders have their output viewed with appropriate skepticism, and if they do so often enough, their reputation takes a permanent hit. Scientists who went into the employ of tobacco companies could anticipate they’d never leave that backwater. Even the great unwashed public knows that drug company funded research isn’t what it is cracked up to be.
But in the never-never realm of reality denial within the Beltway, as long as you can get a PhD or better to grace the latest offering from the Ministry of Truth, it gives useful cover to Congresscritters and other message amplifiers who will spout whatever big donor nonsense they are being asked to endorse this week.
The Academy Award winning documentary Inside Job depicted how the fish has rotted from the head in the economics academy, using former Harvard dean Larry Summers, former Fed vice chairman Frederic Mishkin and Columbia Business School dean Glenn Hubbard as object lessons.
Despite our publication of Academic Choice theory, which provides more formal support for the Inside Job observations, we’ve seen perilous little in the way of a change in attitudes from within the academy. So to make a wee additional contribution on this front, we are inaugurating the Frederic Mishkin Iceland Prize and making Calomiris, Higgins, and Mason its initial recipients based on their remarkable work as exemplified in this paper.
First and foremost is that this article goes well beyond the normal boundaries of shilldom, which is generally confined to cherry picking of data and artful framing. There are multiple, gross distortions, which call into question either the writers’ honesty or their knowledge of the basics in the mortgage servicing arena. But that level of inaccuracy is necessary to create the simulacrum their patrons desire, that of a parallel universe in which servicers are virtuous, borrowers are scheming, and the rule of law operates only for the benefit of corporate interests.
Another one of its distinctive contributions is the multiple layering of what mere mortals would call “stupid”. For instance, this paper cites earlier work on strategic default and mortgage mods that is analytically dubious. So it creates a steaming edifice of garbage but via its extensive citations, it hews to the form of normal academic output, making it look legitimate to those who don’t know the terrain.
Let’s look at the paper in some detail. It is so wrongheaded in so many places that a detailed shred would tax the patience of readers. So for the most part, I’ll stick to broader issues.
Attack on principal mods based on inaccurate and misleading reporting of history. The main reason for this paper being issued is most likely to be to demonize the notion of principal mods generally rather than the 50 state AG settlement proposal since any deal would be negotiated and completely voluntary (note that the paper’s depicting them as “government mandated” is one of its many distortions).
First, it charges that principal mods don’t work. Any honest appraisal can’t possibly conclude that, since in every local/regional market housing downturn prior to 1995, mortgage mods to borrowers with viable income was standard practice by banks. (so much more at link and sources and your brain will explode like mine!!! have fun and enjoy!)-FiggYves Smith-It seems more than a bit peculiar that, per American Banker, financial... more
Manhattan DA Investigates Bear Stearns Mortgage Traders
By Daniel Indiviglio
Apr 12 2011, 5:53 PM ET
Could some Wall Street bankers finally end up behind bars for fraud in connection with the financial crisis? Up to now, we haven't seen any high profile criminal prosecutions of bank execs, but that may soon change. The Manhattan District Attorney is going after several key former Bear Stearns mortgage bond traders for allegedly misrepresenting securities and for an alleged double-dipping scheme, reported here in January by Teri Buhl. She writes a follow-up today breaking this news in the Distressed Debt Report. How hard will it be to throw these former Bear execs -- all of whom now hold prominent positions at other financial firms -- in jail?
Tragically, Buhl's article is behind a pay wall. But it reports that the Manhattan DA hasn't determined if they will ultimately charge the former Bear traders with a misdemeanor or a felony -- it depends on whether they can prove intent to defraud.
The article further says that New York State Assemblyman Joseph Morelle, who also serves as the chairman of the Assembly Insurance Committee, is leading a campaign to look into possible charges of insurance fraud as well. Those charges depend on if the former Bear execs "knowingly made materially false representations that insurers had justifiably relied on, and that caused damage to the insurers." Morelle has also been working to persuade the New York Attorney General to investigate, according to Buhl. She details some of these allegations in a blog entry today, which thankfully you can read for free.
As I stated before, these fraud allegations should actually be fairly easy to prove or disprove -- unless evidence has been destroyed. If a double-dipping scheme took place or if securities provided were different than indicated, the process either did or did not violate deal covenants. There's not a great deal of gray area allowed when actual money changes hands. We aren't merely talking about insurers claiming they didn't have all the information they needed; we're talking about insurers claiming that deal documents specified that funds should have been provided to them that these Bear execs kept for their bank, or that the securities sold did not adhere to the criteria deal documents specified.
Keep your eye on this case. If criminal charges are brought against these former Bear traders, then that would be pretty huge news. Even if they aren't convicted, criminal charges could be enough to tarnish their reputations, which by the look of their current jobs, still appear to be well intact. (Daniel Indiviglio - Daniel Indiviglio is an associate editor at The Atlantic, where he writes about credit markets, regulation, monetary & fiscal policy, taxes, banking, trade, emerging markets and technology. Prior to joining The Atlantic, he wrote for Forbes. He also worked as an investment banker and a consultant (not exactly payback but its a good start and even better its one of their own reporting it lol)figgManhattan DA Investigates Bear Stearns Mortgage Traders By Daniel Indiviglio Apr... more
Why is the Federal Reserve forking over $220 million in bailout money to the wives of two Morgan Stanley bigwigs?America has two national budgets, one official, one unofficial. The official budget is public record and hotly debated: Money comes in as taxes and goes out as jet fighters, DEA agents, wheat subsidies and Medicare, plus pensions and bennies for that great untamed socialist menace called a unionized public-sector workforce that Republicans are always complaining about. According to popular legend, we're broke and in so much debt that 40 years from now our granddaughters will still be hooking on weekends to pay the medical bills of this year's retirees from the IRS, the SEC and the Department of Energy.
Why Isn't Wall Street in Jail?
Most Americans know about that budget. What they don't know is that there is another budget of roughly equal heft, traditionally maintained in complete secrecy. After the financial crash of 2008, it grew to monstrous dimensions, as the government attempted to unfreeze the credit markets by handing out trillions to banks and hedge funds. And thanks to a whole galaxy of obscure, acronym-laden bailout programs, it eventually rivaled the "official" budget in size — a huge roaring river of cash flowing out of the Federal Reserve to destinations neither chosen by the president nor reviewed by Congress, but instead handed out by fiat by unelected Fed officials using a seemingly nonsensical and apparently unknowable methodology.
This article appears in the April 28, 2011 issue of Rolling Stone. The issue will be available on newsstands and in the online archive April 15.
Now, following an act of Congress that has forced the Fed to open its books from the bailout era, this unofficial budget is for the first time becoming at least partially a matter of public record. Staffers in the Senate and the House, whose queries about Fed spending have been rebuffed for nearly a century, are now poring over 21,000 transactions and discovering a host of outrages and lunacies in the "other" budget. It is as though someone sat down and made a list of every individual on earth who actually did not need emergency financial assistance from the United States government, and then handed them the keys to the public treasure. The Fed sent billions in bailout aid to banks in places like Mexico, Bahrain and Bavaria, billions more to a spate of Japanese car companies, more than $2 trillion in loans each to Citigroup and Morgan Stanley, and billions more to a string of lesser millionaires and billionaires with Cayman Islands addresses. "Our jaws are literally dropping as we're reading this," says Warren Gunnels, an aide to Sen. Bernie Sanders of Vermont. "Every one of these transactions is outrageous."
Wall Street's Big Win
But if you want to get a true sense of what the "shadow budget" is all about, all you have to do is look closely at the taxpayer money handed over to a single company that goes by a seemingly innocuous name: Waterfall TALF Opportunity. At first glance, Waterfall's haul doesn't seem all that huge — just nine loans totaling some $220 million, made through a Fed bailout program. That doesn't seem like a whole lot, considering that Goldman Sachs alone received roughly $800 billion in loans from the Fed. But upon closer inspection, Waterfall TALF Opportunity boasts a couple of interesting names among its chief investors: Christy Mack and Susan Karches.
Christy is the wife of John Mack, the chairman of Morgan Stanley. Susan is the widow of Peter Karches, a close friend of the Macks who served as president of Morgan Stanley's investment-banking division. Neither woman appears to have any serious history in business, apart from a few philanthropic experiences. Yet the Federal Reserve handed them both low-interest loans of nearly a quarter of a billion dollars through a complicated bailout program that virtually guaranteed them millions in risk-free income.
RS Politics Daily: Political news and commentary from Rolling Stone writers and editors
The technical name of the program that Mack and Karches took advantage of is TALF, short for Term Asset-Backed Securities Loan Facility. But the federal aid they received actually falls under a broader category of bailout initiatives, designed and perfected by Federal Reserve chief Ben Bernanke and Treasury Secretary Timothy Geithner, called "giving already stinking rich people gobs of money for no fucking reason at all." If you want to learn how the shadow budget works, follow along. This is what welfare for the rich looks like.
In August 2009, John Mack, at the time still the CEO of Morgan Stanley, made an interesting life decision. Despite the fact that he was earning the comparatively low salary of just $800,000, and had refused to give himself a bonus in the midst of the financial crisis, Mack decided to buy himself a gorgeous piece of property — a 107-year-old limestone carriage house on the Upper East Side of New York, complete with an indoor 12-car garage, that had just been sold by the prestigious Mellon family for $13.5 million. Either Mack had plenty of cash on hand to close the deal, or he got some help from his wife, Christy, who apparently bought the house with him.
The Macks make for an interesting couple. John, a Lebanese-American nicknamed "Mack the Knife" for his legendary passion for firing people, has one of the most recognizable faces on Wall Street, physically resembling a crumpled, half-burned baked potato with a pair of overturned furry horseshoes for eyebrows. Christy is thin, blond and rich — a sort of still-awake Sunny von Bulow with hobbies. Her major philanthropic passion is endowments for alternative medicine, and she has attained the level of master at Reiki, the Japanese practice of "palm healing." The only other notable fact on her public résumé is that her sister was married to Charlie Rose.
It's hard to imagine a pair of people you would less want to hand a giant welfare check to — yet that's exactly what the Fed did. Just two months before the Macks bought their fancy carriage house in Manhattan, Christy and her pal Susan launched their investment initiative called Waterfall TALF. Neither seems to have any experience whatsoever in finance, beyond Susan's penchant for dabbling in thoroughbred racehorses. But with an upfront investment of $15 million, they quickly received $220 million in cash from the Fed, most of which they used to purchase student loans and commercial mortgages. The loans were set up so that Christy and Susan would keep 100 percent of any gains on the deals, while the Fed and the Treasury (read: the taxpayer) would eat 90 percent of the losses. Given out as part of a bailout program ostensibly designed to help ordinary people by kick-starting consumer lending, the deals were a classic heads-I-win, tails-you-lose investment.
So how did the government come to address a financial crisis caused by the collapse of a residential-mortgage bubble by giving the wives of a couple of Morgan Stanley bigwigs free money to make essentially risk-free investments in student loans and commercial real estate? The answer is: by degrees. The history of the bailout era reads like one of those awful stories about what happens when a long-dormant criminal compulsion goes unchecked. The Peeping Tom next door stares through a few bathroom windows, doesn't get caught, and decides to break in and steal a pair of panties. Next thing you know, he's upgraded to homemade dungeons, tri-state serial rampages and throwing cheerleaders into a panel truck.
more at http://www.rollingstone.com/politics/news/the-real-housewives-of-wall-street-look-whos-cashing-in-on-the-bailout-20110411?page=2America has two national budgets, one official, one unofficial. The official budget is... more
US giant General Motors will invest $540 million to produce two low-emission motors in central Mexico, the company announced here Thursday, accompanied by President Felipe Calderon.
The latest project for GM in Mexico would create 500 direct and another 500 indirect jobs in its plant in Toluca, Calderon said.
GM has four plants in Mexico, and has invested some $5 billion here since 2006, Calderon said.
GM was left reeling by an industry slump when the global economic crisis hit. It received 49.5 billion dollars from the US Treasury and emerged from a bankruptcy restructuring in 2009.
It successfully returned to public trading last November by raising 23.1 billion dollars in an initial stock offering — the largest in history.
http://redwhitebluenews.com/?p=14524US giant General Motors will invest $540 million to produce two low-emission motors in... more
WASHINGTON (CNNMoney) -- House Republicans calling for smaller government and less spending have a big new target: the Consumer Financial Protection Bureau.
The bureau was the most popular part of the Wall Street reforms passed into law last year. But it was also the most politically controversial, barely emerging after more than a year's worth of legislative wrangling.
The bureau is an independent agency, funded by fees that banks pay to the Federal Reserve. Beginning on July 21, it will be charged with regulating credit cards, mortgages and other financial products like payday loans.
But Republican lawmakers, who've already made good on promises to pass bills to roll back health care reform and undo environmental initiatives, want to take a bite out of the consumer bureau and bring it under their control.
"Politicizing the funding of bank supervision would be a dangerous precedent," Warren said in a speech to the Consumer's Union last week. "It would deprive the CFPB of the predictable funding it will need to examine large and powerful banks consistently and to provide a level playing field with their nonbank competitors."
More at link.
http://money.cnn.com/2011/02/24/news/economy/republicans_target_consumer_bureau/index.htm?cnn=yesWASHINGTON (CNNMoney) -- House Republicans calling for smaller government and less... more
There was a time when everyone thought CDOs are perfectly safe. That ended up being a tad incorrect. It resulted in AIG blowing up, recording hundreds of billions in losses and almost taking the rest of the financial world with it, leading ultimately to the first iteration of quantitative easing.
A few years thereafter, several blogs and fringe elements suggested that munis are the next major cataclysm and will likely require Fed bail outs (some time before Meredith Whitney came on the public scene with her apocalyptic call). It would be only fitting that the same AIG that blew up the world the first time around, end up being the same company that does so in 2011, and with an instrument that just like back then only an occasional voice warned is a weapon of mass destruction: municipal bonds.
AIG dropped over 6% today following some very unpleasasnt disclosures about its muni outlook, and corporate liquidity implications arising therefrom:
"American International Group Inc., the bailed-out insurer, said it faces increased risk of losses on its $46.6 billion municipal bond portfolio and that defaults could pressure the company’s liquidity."
So how long before we discover that Goldman has been lifting every AIG CDS for the past quarter? And how much longer after that until someone leaks a document that the company's muni strategy was orchestrated by one Joe Cassano?
Continue on at:
http://www.zerohedge.com/article/will-aig-implosion-20-lead-qe-30-0There was a time when everyone thought CDOs are perfectly safe. That ended up being a... more
" Of all forms of tyranny the least attractive and the most vulgar is the tyranny of mere wealth, the tyranny of plutocracy " - John Pierpont Morgan
"Everything predicted by the enemies of banks, in the beginning, is now coming to pass. We are to be ruined now by the deluge of bank paper. It is cruel that such revolutions in private fortunes should be at the mercy of avaricious adventurers, who, instead of employing their capital, if any they have, in manufactures, commerce, and other useful pursuits, make it an instrument to burden all the interchanges of property with their swindling profits, profits which are the price of no useful industry of theirs." --Thomas Jefferson to Thomas Cooper, 1814
"Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with a flick of the pen they will create enough money to buy it back again. However, take away from them the power to create money, and all the great fortunes like mine will disappear and they ought to disappear, for a better world to live in. But, if you wish to remain the slaves of bankers and pay the cost for your own slavery, let them continue to create money." - Sir Jostah Stamp, President of the Bank of England in the 1920's, the second richest man in Britain
''This great and powerful force-the accumulated wealth of the United States-has taken over all the functions of Government, Congress, the issue of money, and banking and the army and navy in order to have a band of mercenaries to do their bidding and protect their stolen property.'' - Senator Richard Pettigrew - Triumphant Plutocracy - Published, January 1, 1922
"A banker is a man who loans you umbrellas when the sun is shining and demands it back the moment it looks like rain." - Mark Twain" Of all forms of tyranny the least attractive and the most vulgar is the tyranny... more
Goldman Sachs collected $2.9 billion from the American International Group as payout on a speculative trade it placed for the benefit of its own account, receiving the bulk of those funds after AIG received an enormous taxpayer rescue, according to the final report of an investigative panel appointed by Congress.
The fact that a significant slice of the proceeds secured by Goldman through the AIG bailout landed in its own account--as opposed to those of its clients or business partners-- has not been previously disclosed. These details about the workings of the controversial AIG bailout, which eventually swelled to $182 billion, are among the more eye-catching revelations in the report to be released Thursday by the bipartisan Financial Crisis Inquiry Commission.
The details underscore the degree to which Goldman--the most profitable securities firm in Wall Street history--benefited directly from the massive emergency bailout of the nation's financial system, a deal crafted on the watch of then-Treasury Secretary Henry Paulson, who had previously headed the bank.
"If these allegations are correct, it appears to have been a direct transfer of wealth from the Treasury to Goldman's shareholders," said Joshua Rosner, a bond analyst and managing director at independent research consultancy Graham Fisher & Co., after he was read the relevant section of the report. "The AIG counterparty bailout, which was spun as necessary to protect the public, seems to have protected the institution at the expense of the public."
Goldman and AIG both declined to comment.
When news first broke in 2009 that Goldman had been an indirect beneficiary of the AIG bailout, collecting the full value of some $14 billion in outstanding insurance polices it held with the firm, the officials who brokered the deal justified these terms as a necessary stabilizer for the broader financial system. As the world's largest insurance company, AIG's inability to cover its outstanding obligations could have threatened the solvency of the institutions holding its policies, asserted the Federal Reserve Bank of New York, which oversaw the deal.
Goldman fended off claims that the arrangement amounted to a backdoor bailout by asserting that none of the money from the AIG rescue landed in its own coffers. Rather, those funds went to compensate clients or institutions on the other side of its trades, Goldman said.
But the report from the financial crisis commission, obtained by The Huffington Post in advance of its release, appears to challenge that assertion: The report reveals another pot of money conveyed to Goldman--the $2.9 billion to cover trades the Wall Street investment house made for itself. That money went straight to the bank's bottom line, according to the report.
Over the last two years, Goldman has reported nearly $22 billion in profits, according to its official earnings statements. During those years, it has paid out $31.6 billion in compensation to its employees.
According to the report, the financial crisis commission first learned that the $2.9 billion in AIG funds landed in Goldman's account through an e-mail the bank sent to the panel on July 15, 2010 in response to questions.
Previously, Goldman executives had testified that the AIG bailout funds the bank collected went to compensate its clients and institutions that held the other side of its trades.
At a hearing on July 1, 2010--two weeks before Goldman sent the e-mail acknowledging how $2.9 billion in AIG funds wound up in its own account--the crisis panel questioned Goldman's chief financial officer, David A. Viniar and managing director David Lehman. Both said they knew nothing about AIG funds landing in the bank's private coffers, according to a transcript of the hearing.
The report concludes that Goldman collected the $2.9 billion as payment for so-called proprietary trades made for its own account--essentially successful bets on large pools of financial instruments.
"The total was for proprietary trades," the report asserts. "Unlike the $14 billion received from AIG on trades in which Goldman owed the money to its own counterparties, this $2.9 billion was retained by Goldman."
A spokesman for for the crisis commission said it would be premature to discuss the panel's findings.
"I have no comment on the commission's report until it is released on Thursday," said crisis commission spokesman Tucker Warren.
Goldman collected at least half the money at issue after AIG received the first round of a public bailout whose tab eventually swelled to $182 billion, according to the commission's report.
The winning bets that Goldman collected on through the AIG bailout are known as credit default swaps--essentially, a type of insurance, albeit one that operates in the shadows, beyond purview of regulators. The insurance giant wrote trillions of dollars worth of these policies during the real estate boom without setting aside sufficient cash to cover losing bets, positioning itself for potential catastrophic losses.
According to the crisis commission report, Goldman bought credit default swaps from AIG as a form of insurance on investments known as Abacus, which were pools of mortgage-linked securities. One such pool put Goldman cross-wise with federal regulators: Last year, Goldman agreed to pay $550 million in fines to settle securities fraud charges filed by the Securities and Exchange Commission.
According to the lawsuit, Goldman allegedly concealed the fact that it designed the basket of mortgage-linked securities to fail at the behest of another client who netted about $1 billion by betting against them. Goldman sold the same investments to other clients--mostly European banks--without disclosing their provenance, according to the SEC's lawsuit.
The crisis panel did not disclose whether this Abacus deal was among those on which Goldman collected a portion of the AIG bailout funds.
The AIG bailout, which paid holders of its insurance policies 100 cents on the dollar, was aggressively defended by federal regulators as a critical immunization against a potential financial pandemic as the insurance company teetered on the verge of collapse in the fall of 2008.
Treasury Secretary Timothy F. Geithner, who led the New York Fed at the time the AIG rescue was crafted, later told Congress that a collapse risked "large and unpredictable global losses with systemic consequences--destabilizing already weakened financial markets, further undermining confidence in the economy, and constricting the flow of credit." Both the New York Fed and Treasury declined to comment.
Analysts say such fears caused the officials who crafted the bailout to lean heavily toward speed and size, while failing to factor in fairness.
"At the time, the idea was the sucker could go down because there wasn't enough liquidity in the system, money wasn't moving, and you could see a domino effect,"
said Ann Rutledge, a principal at R&R Consulting in New York, which specializes in structured finance.
In reality, she contends, those fears were overblown: There was ample money in the financial system. Rather, individual institutions did not have enough cash on hand to survive their losses, she asserts. But the fear of a broader liquidity crisis was used as justification for what now appears to have been a backdoor means of bailing out Goldman, said Rutledge.
The details in the commission's report leave Goldman "naked," she added. "It doesn't have the fig leaf of a systemic risk argument. Normally what happens when you have a sophisticated institution that's doing stupid credit stuff is you let them eat it, but that didn't happen in the bailout."
http://www.huffingtonpost.com/2011/01/26/goldman-sachs-aig-backdoor-bailout_n_814589.htmlGoldman Sachs collected $2.9 billion from the American International Group as payout... more
Published date: January 4, 2011
Category: Money and Economics
Tags: Money, Money and Economics
Comments: 9 (Comment on this post)Published date: January 4, 2011 Category: Money and Economics Tags: Money, Money and... more
A higher stock market is of little comfort to the millions who don't have jobs, are facing foreclosure, fraudulent or otherwise, or have no health coverage.
January 3, 2011 |
There are two potential ways to measure the economic performance of a political leader. One is by the profitability, stock prices and executive bonuses of a nation’s corporations. The other is by the financial condition of the majority of its population. Since he came to power, President Obama and his economic team have propped up the former and failed miserably to aid the latter. (For the record, ever since the first paragraph of Obama’s pre-primary website economics plan put free markets before people, this is where we were going, but it still hurts to get there.)
The S&P 500 index is up 50% since Obama took office. But unemployment remains higher than it was when he entered the White House, home foreclosures continue to mount to the detriment of borrowers and entire neighborhoods, health insurance companies responded to his health care “reform” bill by raising premiums, and the financial system’s largest banks continue to prosper in the wake of a multi-trillion dollar bailout with no strings attached to share their subsidizations with the rest of American citizens. To top it all off, as he approaches the midpoint of his first, and likely last, term, Obama bowed to the pressure of the Republican Party and extended tax cuts for the richest Americans in order to be able to also extend them for everyone else more sorely in need. There’s only so long you can blame another administration for your actions.
Obama’s economic policies have either been continuations of his predecessor’s, as in the case of taxes and bank bailouts, or bills so watered down to appease corporations, notably banks and insurance companies, that they are ineffective. In the process, he continues to alienate his supporters—individual voters, not the companies that funded his candidacy—leaving their economy in shambles. Here’s the recap.
Just in time for Christmas, we got Obama’s big tax-cut compromise. Obama’s reverse Robin Hood deal with the Republicans disproportionally takes from the poor to give to the rich. The plan adds another $1 trillion to the record United States deficit, $700 billion of which would be the cost of extending tax breaks to the wealthiest 2 percent of the country, the rest going toward jobless benefits—necessary to help those victims of the wider economic problems, but not complemented with a job-creation program.
According to the Center on Budget and Policy Priorities, American millionaires would get 22 percent (or $200 billion over two years) of the benefits of the deal, while the bottom 20 percent of American workers would get less than one-half of one percent. According to David Cay Johnston, the 45 million households that make less than $20,000 a year will be slapped with a tax increase of $150 to $200.
Even though the majority of his own Democratic Party supported extending cuts only to Americans making less than $250,000 a year (on TV anyway, apparently not at their seats once the compromise was inked, notables with balls like Sen. Bernie Sanders aside), Republican “all-or-nothing” pressure was met by Obama’s capitulation. He could have bargained harder—say by suggesting that tax cuts not be extended for people making more than a million dollars, rather than punting the tax cut issue into the 2012 presidential election period.
What Obama effectively did was adopt George W. Bush’s tax policy in total rather than come up with a better deal, even though the Bush tax cuts increased the net worth of the wealthiest Americans while the wages of the rest of Americans (the ones that had jobs) stagnated or decreased per hour worked. The Republicans obviously considered the deal a victory, to hell with any Republican voters in the bottom 98 percent of the country. Wall Street thought it was better than expected. Jamie Dimon was all but salivating. Even though the majority of Americans wanted to end tax breaks for the wealthiest, plus extend unemployment benefits, Obama couldn’t pull it off.
To go to the next page:
http://www.alternet.org/news/149394/obama's_economic_report_card:_a%2B_for_helping_the_wealthy_--_failing_the_rest_of_us/A higher stock market is of little comfort to the millions who don't have jobs,... more
The $700-billion bank bailout, launched in the final months of the Bush administration, was meant to save US financial institutions from a systemic collapse. But an analysis of banks' earnings statements concludes that nearly 100 bailed-out banks are at risk of collapsing all the same.
Despite receiving a total of $4.2 billion in bailout cash, 98 US banks are at risk of failing, the Wall Street Journal reports.
The banks are suffering from “eroding capital levels, a pileup of bad loans and warnings from regulators,” the Journal reports, and the nature of the problem indicates that these banks were in trouble before the 2008 crisis hit -- a sign that the US's regulatory structure for banks may have been insufficient for years or decades before the collapse.
So far, seven bailed-out banks have already collapsed, costing taxpayers $2.7 billion.The $700-billion bank bailout, launched in the final months of the Bush... more