Posted on 05/01/2010 3:13:00 PM PDT by thewoodwardreport.com
Now that Senate Republicans have produced their own proposal, this much is known for certain: after Congress finishes doing whatever it is going to do regarding financial market reform, the country will still have financial institutions policymakers regard as too big to fail. And when the financial system is again under stress, there will be more bailouts.
The narrative driving financial market reform is this: Large financial institutions took too many risks and were overleveraged. They were all so interconnected that failure of one would be a contagion that might collapse the entire U.S. financial system. So, the federal government had no choice but to step in and bail them out.
I believe that this narrative is false. I believe that policymakers could have and should have allowed the financial markets to sort themselves out through write downs and bankruptcies. I believe policymakers panicked and overreacted.
That, however, is very much a minority view, and a very small minority at that. So, accepting the narrative for purposes of discussion, what should be done to keep taxpayers from being on the hook to bail out large financial institutions when they get in trouble?
The most obvious way is to make sure they don't exist. Pass laws limiting the size, scope and activities of financial institutions so that there are none so large, leveraged and interconnected that policymakers are unwilling to let them fail.
That might not make for the most efficient and effective capital markets. But the U.S. has made do with small banks with limited activities before. We could do it again.
(Excerpt) Read more at realclearpolitics.com ...
WE were bankrupted by the VNam war, and went off the gold standard in 1971 to cover it up and establish a debt-based capitalist system, which is to say, no capitalist system at all. We have since borrowed past the ability of the entire world to loan us money, and must now conjure up all manner of infinite sized designs to keep the world and reality at bay. “Too Big to Fail”, morphing to “Too Big for Jail”....is only the beginning. When reality is kept at bay, straight jackets and no-so-padded cells always reappear in time.
Al Gore once famously stated that “There is no controlling authority” in regard to another matter. The quote has relevance to many arenas today.
Although reason is awakening, the stock of the masters of chaos is rising, explosively.
Quote: “That might not make for the most efficient and effective capital markets. But the U.S. has made do with small banks with limited activities before. We could do it again.” No such thought is in evidence in the executive branch or the Congress...nothing could be further from their minds, and, all capital today, in a debt-based capitalist society is...AND, MUST BE, BORROWED!
That may be running out, too. We'll see if the economy is really recovering when it does.
Meaning there is little incentive to work for the revenue when you can be bailed out. Like welfare
Who's kidding who? This is another Ohaha slush fund for desperate Dems slobbering over their diminshed reelection chances.
CASE IN POINT GM received $50 billion in TARP funds (never mind that TARP was only supposed to cover financial institutions). So how did GM---a bankrupt company still hemorrhaging money---pay back five years early, a multi-billion dollar government loan? Where did GM get the money?
Could it be that the mountain of government bailout cash was overkill-----much more than necessary? That the repayment is nothing other than a political and marketing ploy whereby the government gets repaid with the very same money they handed out?
WE BETTER CALL THE COPS Over-lending on a loan to achieve quick initial repayment (and thus inflate the loan's perceived value), in the private sector, is called fraud.
DID YOU KNOW? TARP was not designed to be a pool of money available for bailout of just anything that didn't move, like a couple of bankrupt unionized companies in the automobile industry. It was very specific in its purpose to provide liquidity to frozen banking and financial system and stave off the run on the banks (attack on the financial system, by proxy) and allow the 'netting' of the [frozen] assets on the books of financial institutions, in the aftermath of fall of Lehman Bros and run on trillions of dollars in the money market funds in the consequent "breaking the buck" by private Reserve Primary Fund managed by Bruce Bent.
The $700B TARP Bailout is now being called, "A MASTERFUL DECEIT." Paulson, et al, may not have pulled a fast one when he testified in favor of the TARP before Congress----but Congress' phony outrage is a puzzlement. If HR 1424 was a 'MASTERFUL DECEIT' then CONGRESS didn't do its job.
TITLE I—TROUBLED ASSETS RELIEF PROGRAM (required 'Congressional Oversight' sections listed)
Sec. 101. Purchases of troubled assets.
Sec. 102. Insurance of troubled assets.
Sec. 103. Considerations.
Sec. 104. Financial Stability Oversight Board.
Sec. 105. Reports.
Sec. 107. Contracting procedures.
Sec. 108. Conflicts of interest.
Sec. 111. Executive compensation and corporate governance.
Sec. 116. Oversight and audits.
Sec. 118. Funding.
Sec. 119. Judicial review and related matters.
Sec. 121. Special Inspector General for the Troubled Asset Relief Program.
Sec. 125. Congressional Oversight Panel.
Sec. 127. Cooperation with the FBI.
Sec. 129. Disclosures on exercise of loan authority.
In HR 1424, there are enough rules, regs and CONGRESSIONAL OVERSIGHT REQUIRED that not one Thin Dime should have been 'misspent.' So if anything crooked did go on Congress should look in a mirror. They dropped the ball -- again. And the same Gangster Government will run our healthcare.
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Sen Grassley works to establish facts behind claim that GM repaid its TARP loan
Press Office of Sen Chuck Grassley
FR Posted on Wednesday, April 28, 2010 6:34:35 PM by quesney
EXCERPT --- Senator Chuck Grassley today continued to peel back the layers of taxpayer obligations behind last week’s claim and fanfare about General Motors repaying its multi-billion dollar loan from the Troubled Asset Relief Program, the $700 billion taxpayer-funded bailout. --SNIP-- Long Read
Money quote: Sen Grassley: "The Congressional Budget Office estimates that taxpayers will lose around $30 billion on GM. In addition, the payment that occurred last week did not come from revenue GM earned by selling cars, despite what was claimed. Instead, Treasury allowed GM to use funds in a separate escrow account to pay its TARP debt."
” Money quote: Sen Grassley: “The Congressional Budget Office estimates that taxpayers will lose around $30 billion on GM. In addition, the payment that occurred last week did not come from revenue GM earned by selling cars, despite what was claimed. Instead, Treasury allowed GM to use funds in a separate escrow account to pay its TARP debt.”
I figured as much. Crooks.
I wonder if we paid for that stupid commercial, too!
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