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November 16, 2008

Doing The Conga

Filed under: TARP — baseball91 @ 2:59 AM
Tags: , , , ,



“With stocks tied to bonds, bonds tied to housing, housing tied to the credit crisis, and everyone hitched to the government, this was all like the conga line to the poor house.” -Craig Rappaport, wealth manager at Janney Montgomery Scott


Newspapers: where there used to be where the discussion of issues took place. The Tribune Company is on life support. The Minneapolis newspaper will not survive over the next 3 months. And Wall Street and its 41,000 lobbyists continue to make policy without serious discussion of issue. In the last few years, from the Patriot Act to the TARP legislation, there was any real consideration given to legislation enacted by Congress, asked for by George Bush, the worst president in United States history.  Now if I was in a branch of the government asked to approve his initiated legislation, I would be asking some serious questions, especially after seeing all of the serial mistakes, with the reign of Alberto Gonzales and White House Counsel John Yoo. So where was the challenge to the eroding of the ideals of American liberty?


Money was paper. Money was the paper I held in money funds, in savings. Could it all be worthless? The Treasury Department’s attempt to take hold of, to attempt to fool the market was to put the value of currency at risk. There had always been an invisible trust in currency. It was how society had worked in my lifetime. Was currency as a medium of exchange now going to be challenged?


“Naomi Klein, author of The Shock Doctrine: The Rise of Disaster Capitalism, exposed this insanity in a recent Rolling Stone article, ‘The New Trough: The Wall Street bailout looks a lot like Iraq, a ‘”free-fraud zone” where private contractors cash in on the mess they helped create.’ Paulson’s privatization, outsourcing and management of the $700 billion bailout has the exact same Reaganomics ideological, strategic and deceptive footprints that President George W. Bush and former Defense Secretary Donald Rumsfeld used to privatize, outsource and mismanage the costly Iraq War blunder. Yes, Paulson is America‘s new Rumsfeld!


The American taxpayer is being royally screwed by the Wall Street bailout giveaway. According to Klein, they’re adding insult to injury, rubbing salt in our wounds:

  • “Many of the banks appear to have no intention of wasting the money on loans.”
  • Merrill CEO John Thain said “it’s just going to be a cushion.”
  • Citigroup CFO Gary Crittenden “hinted that his company would use its share of the cash, $25 billion, to buy up competitors and swell even bigger,” giving them the “possibility of taking advantage of opportunities that might otherwise be closed to us.”
  • And my old colleagues at Morgan Stanley are “planning to pay themselves $10.7 billion this year, much of it in bonuses.” So screw the taxpayers and Main Street homeowners.

According to Klein, the comparison of the British bailout negotiated just five days before Paulson “negotiated” our historic $125 billion American bailout with nine Wall Street banks includes:

  • United Kingdom. Prime Minister Gordon Brown negotiated “meaningful guarantees for taxpayers — voting rights at the banks, seats on their boards, 12% in annual dividend payments to the government, a suspension of dividend payments to shareholders, restrictions on executive bonuses, and a legal requirement that the banks lend money to homeowners and small businesses.” Brown took advantage of his negotiation position of strength.
  • United States.  The American taxpayers instead got a bad deal negotiated by a former Wall Street CEO loaded with conflicts of interest: We got “no controlling interest, no voting rights, no seats on the bank boards and just 5% in dividend payouts to the government, while [bank] shareholders continue to collect billions in dividends every quarter. What’s more, golden parachutes and bonuses already promised by the banks will still be paid out to executives — all before taxpayers are paid back. No wonder it took just one hour for Paulson to convince all nine CEOs to accept his offer, less than seven minutes per bank for one of the sweetest taxpayer giveaways in history.”




    It gets even worse: The day after Paulson’s nine-bank deal, he announced his selection of Bank of New York Mellon as the “master custodian” coordinating all phases of the Wall Street bank bailout. The role of Bank of New York Mellon as “the contractor of contractors” is to the $700 billion bailout what Vice President Dick Cheney’s old firm Halliburton was to all the mercenary and private contractor operations in Iraq. Plus the new president’s locked into a three-year contract.  BNYM’s boss can outsource to friendly Wall Street “subcontractors,” handing out billions of taxpayer money with little oversight much as Halliburton did in Iraq. They will “purchase toxic debts from Wall Street, service them and auction them off in the future.” BNYM’s boss called this plum “the ultimate outsourcing.” An opportunity for his bank because, there’s “a lot of new business that’s going on even in this chaotic marketplace.”  Paul B. Farrell, MarketWatch  November 9, 2008 

  • “I suspect the conduct of Goldman Sachs and other bankers in the rescue will be a background theme, if not a highlighted theme, as Congress decides how much regulation, how much control and frankly, how punitive to be with respect to the financial services industry,” said Donald Langevoort, a law professor at Georgetown. “The settling up is going to come in Congress next spring.”  NY Times

    ”…you just know 
    those ‘financial WMDs’ that Paulson’s leaving behind in the bailout funds ‘sleeper cell’ will ultimately trigger an even bigger financial meltdown soon, by 2011.” –Paul B. Farrell November 9, 2008 MarketWatch 


Newspapers once were where issues used to be discussed before the local paper was owned by an asset management group here, or by a real estate magnet in Chicago.  


Where was my representative in the House of Representatives, Betty McCollum, during all of this?  


1 Comment »

  1. Comment by baseball91 — May 31, 2015 @ 3:56 PM | Reply

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