bank bailout

Everything you need to know about the bailouts

Originally posted 2009-03-22 20:41:56 -0500. Bumped by carol.

in 2 short paragraphs. A relatively long post for Atrios. Wheeeeeeeeeeeeee!

What's The Goal?

Others have made this point in various ways, but if the goal is to bail out the banksters and keep the existing too big to fail financial order in place with the same cast of characters in charge, then all of this sounds like a cunning plan.

If the goal was really to get banks lending again they'd be funneling large sums of money to healthy (mostly smaller) financial institutions who actually made sensible choices over the last few years.

Meanwhile a fire sale is going on:

This why I still believe...

that they knew about this "crisis" coming down the pike at least as far back as 2003 when they were using that obscure civil war era banking law to block the state lawsuits against the banking institutions. They knew this was all coming and they needed to get legislation in place that would protect the lifestyles of their rich and blameless allies.

"It turns out that one of the features of the 2005 Bankruptcy bill was to put derivative counter parties [like CDS holders] at the front of the line ahead of other creditors in bankruptcy proceedings. Actually, from what I can tell, they don't just go to the head of the line. They got to skip the line entirely. As the Financial Times noted last fall, "the 2005 changes made clear that certain derivatives and financial transactions were exempt from provisions in the bankruptcy code that freeze a failed company's assets until a court decides how to apportion them among creditors."" - Josh Marshall

Legislation like that doesn't just come out of nowhere.

It takes time for them to figure out what they want to achieve and how they want to achieve it. And then there is the need to find the right time and the right place to slip the junk in.

They could have solved many of these problems years ago and mitigated some of the disastrous results but, instead, they purposefully let it build while protecting themselves and waited for just the right time to unleash the "crisis" on the nation, knowing it would tie the hands of the next administration financially.

IOW: They did manage to drown the government in a Katrina sized bath tub.

Also, I think they were hoping the GOP could capitalize on it politically during the elections. What they didn't count on was John McCain's doe in the headlights reaction looking as stupid as it did, nor the fact that some would figure out how it all really happened so fast that a huge backlash would ensue coupled with the reality that Americans just don't trust republicans with their money anymore and in any way. The GOP is a walking and talking financial zombie.

This was all nothing more than a well orchestrated game of CYA and collusion between politicians and their financial owners. Real, honest "Disaster Capitalism" in an ufetterred free-market-run-amok at its worst.

 [So I was wrong. Clearly edited to reflect less "DUH".]

Pissing away $700 billion

Half of the bank bailout is being paid out as dividends ! These bastards are shameless!

U.S. banks getting more than $163 billion from the Treasury Department for new lending are on pace to pay more than half of that sum to their shareholders, with government permission, over the next three years.

And in case you missed it two weeks ago: one of every ten dollars of the "bailout" is being used to pay bonuses! That's right - the bastards are getting $70 billion in bonuses for destroying the financial system and wrecking the economy.

Paulson heads bailout: What is wrong with this financial picture?

[Update: with minor edits towards clarity - luaptifer]

This is incredible.

The Day the S.E.C. Changed the Game steps backward to the date, April 28, 2004, on which SEC gave the OK for the five banks that have precipitated the current spiral of the global financial crisis to begin their own financial risk monitoring programs rather than continuing to use the objective models then restraining all other banks from 'overdoing it'.