WTF??!?
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Posted on 09/21/2008 7:31:49 AM PDT by Brian S. Fitzgerald
In a change from the original proposal sent to Capitol Hill, foreign-based banks with big U.S. operations could qualify for the Treasury Department’s mortgage bailout, according to the fine print of an administration statement Saturday night.
(Excerpt) Read more at news.yahoo.com ...
Do you have extra room in Peru?
With this extension the banks don't have to do any heavy lifting at all. What a country!!
We’re still doomed financially. This bailout will be sucked into the ayss and more and more will be needed within 6 months. It is a lot of money, but not enough. No amount will be enough, and the amount deemed sufficient will cause hyperinflation and/or a bond crash. We have passed the point of no return.
I believe you. I also think this is doomed to fail. It will only postpone the inevitable.
Ogden Nash's Poem
Bankers Are Just Like Anybody Else, Except Richer
This is a song to celebrate banks,
Because they are full of money and you go into them and all you hear is clinks and clanks,
Or maybe a sound like the wind in the trees on the hills,
Which is the rustling of the thousand dollar bills.
Most bankers dwell in marble halls,
Which they get to dwell in because they encourage deposits and discourage withdrawals,
And particularly because they all observe one rule which woe betides the banker who fails to heed it,
Which is you must never lend any money to anybody unless they don't need it.
I know you, you cautious conservative banks!
If people are worried about their rent it is your duty to deny
them the loan of one nickel, yes, even one copper engraving of the martyred son of the late Nancy Hanks;
Yes, if they request fifty dollars to pay for a baby you must
look at them like Tarzan looking at an uppity ape in the jungle,
And tell them what do they think a bank is, anyhow, they had better go get the money from their wife's aunt or ungle.
But suppose people come in and they have a million and they want another million to pile on top of it,
Why, you brim with the milk of human kindness and you urge them to accept every drop of it,
And you lend them the million so then they have two million and this gives them the idea that they would be better off with four,
So they already have two million as security so you have no hesitation in lending them two more,
And all the vice-presidents nod their heads in rhythm, And the only question asked is do the borrowers want the money sent or do they want to take it withm.
Because I think they deserve our appreciation and thanks, the jackasses who go around saying that health and happi- ness are everything and money isn't essential,
Because as soon as they have to borrow some unimportant money to maintain their health and happiness they starve to death so they can't go around any more sneering at good old money, which is nothing short of providential.
Ogden Nash
There isnothing inherently unjust about this IF one considers the bailout a good idea. These are banks with US branches.
The one thing you could do would be to strong arm China, Japan, the UK, Singapore and the European gov'ts to match the $800bn the U.S. is putting up and make this a global solution since they are going to benefit anyway.
They are REGULATED by the Fed:
Foreign banking institutions, which include foreign bank branches, agencies, and U.S.-chartered bank subsidiaries, hold approximately one-fourth of all commercial banking assets in the United States.
Foreign bank branches and agencies operating in the United States are subject to Federal Reserve regulations, and the Federal Reserve examines most foreign bank branches and agencies annually.
Federal Reserve services and privileges are available to foreign bank branches and agencies, but U.S. deposit insurance is not available to branches established after December 1991. http://www.newyorkfed.org/aboutthefed/fedpoint/fed26.html
...which is why we shouldn't have been running the country the way it has been run for a long time.
Buckle your seat belt. This isn’t over. Monday should be a wild ride, much better than Six Flags.
So let me get this straight. Because we are broke as a nation will we be borrowing the money from the same foreign banks we are bailing out?/s
New slogan: “This is B*ll Sh*t! Let the foreign banks fail.” As well as the American ones who made bad, poor, uncreditworthy and unsecurable loans regardless of a crappy law passed by an elitist Congress. Bad judgment should not be rewarded.
On the other hand, a foreign bank doing business in the US probably should be entitled to the same protection as an American bank. RBS has alarge presence in the Chicago area, Bank of Montreal also has a presence named Harris Bank.
Prime plus 5 and secured 200% by American held assets. OK!
A voice of reason. While the idea of taxpayer money going to 'foreign' banks correctly grates on our sense of fairness, there is not enough sensible reporting of the details of this rescue plan.
First, the problem that many of these financial institutions face is not more liabilities than assets, but short term liquidity. Even Lehman Brothers, in their bankruptcy filing, listed more assets than liabilities. This didn't do them any good, because in the current climate of uncertainty, no one was willing to extend them credit to conduct ordinary business, since the exact valuation of their assets was unknown. The intent of these federal bailouts is to calm the sense of panic in the markets so institutions will extend each other the credit they need in order to do daily business, just as they've been doing for decades.
Next, we are not spending $700B dollars that will never be seen again. Most of the money is buying mortgage assets that have considerable real value. Banks may have been stupid to lend $500,000 on a risky mortgage for an overvalued house, but those houses are probably still worth $400,000. The federal government is planning to buy up some of those mortgages at a discount, and sell them off gradually over the next few years. The Resolution Trust Corporation, which followed a similar strategy to fix the Savings & Loan crisis in the late 1980s, ended up making a small profit for the federal government.
Also, the government is not handing out money on particularly favorable terms to these distressed financial institutions. The loans to AIG are at 11%, which is akin to you or I financing our house through credit cards. They have strong incentive to find better deals on the market, but the fact that they have a lender of last resort means they can keep operating even in the face of short term panic. Similarly, the government may buy up some bad mortgages, but it will buy them at a substantial discount, and will eventually sell them for close to full value or a small profit. The key to the financial markets is that they have ability to sell these mortgages today, rather than 2 or 3 years from now.
Finally, the issue of what are 'foreign' banks versus what are 'domestic' banks is so convoluted that it would be difficult to draw a clear line. Is a bank that is 51% US owned but does 75% of its business overseas more 'American' than a bank that's 49% US-owned, but does 75% of its business here? Lehman Brothers Investment bank was a US institution a week ago, but much of it is being bought by Barclay's (a Brittish bank). Are they US or 'foreign'? Do we tell foreign banks that lent money to US customers that they are now operating under a different set of rules than institutions that can claim U.S. ownership? If so, who will invest money in the US in the future?
I'm as frustrated as anyone by the irresponsibility of our government in encouraging these risky mortgages over the past decade. The federal government is now taking on a great deal of risky debt that it shouldn't have had to. But very little of that $700B will actually be 'lost'. If we let the market solve the problem at this point, we wouldn't much like what happened over the next 4 or 5 years. We're pretty much stuck with this bailout now. We ought put our anger and efforts in preventing this from happening again.
Gold told the truth on all of yas as it shot up 90 on Wednesday and more on Thursday. That was a serious vote of no confidence in the super leveraged, derivative-addicted, Wall St house of cards
Where did anyone get the idea that free markets and libertarianism means irresponsible pigs can pile derivative bets as high as the moon
You all are being called on that
They sure as hell aren't captains of industry. They never made a useful thing in their lives. They just shuffled papers and manipulated markets to reap billions
0. first, not at all, but if that is impossible then,
1. full public disclosure of all financial transactions executed under this authority.
2. a proportional equity position in each bank and financial institution to which "relief" is granted.
3. Full powers of the courts to review any and all actions of the Treasury.
4. Paulson's apology and resignation the moment this passes. Replacement by someone who is not a member of the guilty mob that did this to us.
5. Civil service salaries at all banks and institutions bailed out.
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