Have You Heard About The 16 Trillion Dollar Bailout The Federal Reserve Handed To The Too Big To Fail Banks?

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What you are about to read should absolutely astound you. During the last financial crisis, the Federal Reserve secretly conducted the biggest bailout in the history of the world, and the Fed fought in court for several years to keep it a secret.

Do you remember the TARP bailout? The American people were absolutely outraged that the federal government spent 700 billion dollars bailing out the "too big to fail" banks. Well, that bailout was pocket change compared to what the Federal Reserve did. As you will see documented below, the Federal Reserve actually handed more than 16 trillion dollars in nearly interest-free money to the "too big to fail" banks between 2007 and 2010. So have you heard about this on the nightly news? Probably not. Lately Bloomberg has been reporting on some of this, but even they are not giving people the whole picture. The American people need to be told about this 16 trillion dollar bailout, because it is a perfect example of why the Federal Reserve needs to be shut down. The Federal Reserve has been actively picking "winners" and "losers" in the financial system, and it turns out that the "friends" of the Fed always get bailed out and always end up among the "winners". This is not how a free market system is supposed to work.

According to the limited GAO audit of the Federal Reserve that was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the grand total of all the secret bailouts conducted by the Federal Reserve during the last financial crisis comes to a whopping $16.1 trillion.

That is an astonishing amount of money.

Keep in mind that the GDP of the United States for the entire year of 2010 was only 14.58 trillion dollars.

The total U.S. national debt is only a bit above 15 trillion dollars right now.

So 16 trillion dollars is an almost inconceivable amount of money.

But some other dollar figures have been thrown around lately regarding these secret Federal Reserve bailouts. Let's take a look at them and see what they mean.

$1.2 Trillion

A recent Bloomberg article made the following statement....

The $1.2 trillion peak on Dec. 5, 2008 -- the combined outstanding balance under the seven programs tallied by Bloomberg -- was almost three times the size of the U.S. federal budget deficit that year and more than the total earnings of all federally insured banks in the U.S. for the decade through 2010, according to data compiled by Bloomberg.

The $1.2 trillion figure represents the peak outstanding balance on these loans, not the total amount of all the loans. On December 5, 2008 the "too big to fail" banks owed this much money to the Federal Reserve. Many of them could not pay these short-term loans back right away and had to keep rolling them over time after time. Each time a short-term loan got rolled over that represented a new loan.

$7.7 Trillion

Bloomberg is reporting that the Federal Reserve had made a total of $7.77 trillion in financial commitments to the big banks by the end of March 2009....

Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year.

But as mentioned above, a one-time limited GAO audit of the Federal Reserve that was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act covered an even broader time period and revealed even more bailout loans.

According to the GAO audit, $16.1 trillion in secret loans were made by the Federal Reserve between December 1, 2007 and July 21, 2010. The following list of firms and the amount of money that they received was taken directly from page 131 of the GAO audit report....

Citigroup - $2.513 trillion
Morgan Stanley - $2.041 trillion
Merrill Lynch - $1.949 trillion
Bank of America - $1.344 trillion
Barclays PLC - $868 billion
Bear Sterns - $853 billion
Goldman Sachs - $814 billion
Royal Bank of Scotland - $541 billion
JP Morgan Chase - $391 billion
Deutsche Bank - $354 billion
UBS - $287 billion
Credit Suisse - $262 billion
Lehman Brothers - $183 billion
Bank of Scotland - $181 billion
BNP Paribas - $175 billion
Wells Fargo - $159 billion
Dexia - $159 billion
Wachovia - $142 billion
Dresdner Bank - $135 billion
Societe Generale - $124 billion
"All Other Borrowers" - $2.639 trillion

This report was made available to all the members of Congress, but most of them have been totally silent about it. One of the only members of Congress that has said something has been U.S. Senator Bernie Sanders.

The following is an excerpt from a statement about this audit that was taken from the official website of Senator Sanders....

"As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world"

So where is everyone else?

Why aren't leading Republicans and leading Democrats crying bloody murder over this report?

This scandal should have been front page news for months when it was revealed.

But it wasn't.

And Guess what?

Not only did the Federal Reserve give 16.1 trillion dollars in nearly interest-free loans to the "too big to fail" banks, the Fed also paid them over 600 million dollars to help run the emergency lending program. According to the GAO, the Federal Reserve shelled out an astounding $659.4 million in "fees" to the very financial institutions which caused the financial crisis in the first place.

In addition, it turns out that trillions of dollars of this bailout money actually went overseas. According to the GAO audit, approximately $3.08 trillion went to foreign banks in Europe and in Asia.

So why were our dollars being used to bail out foreign banks while tens of millions of American families were deeply suffering?

That is a very good question.

Also, it is important to remember that many of these bailout loans were made at below market interest rates, and this enabled many of these financial institutions to rake in huge profits.

According to a recent Bloomberg article, the big banks brought in an estimated $13 billion by taking advantage of the Fed’s below-market rates....

While the Fed’s last-resort lending programs generally charge above-market interest rates to deter routine borrowing, that practice sometimes flipped during the crisis. On Oct. 20, 2008, for example, the central bank agreed to make $113.3 billion of 28-day loans through its Term Auction Facility at a rate of 1.1 percent, according to a press release at the time.

The rate was less than a third of the 3.8 percent that banks were charging each other to make one-month loans on that day. Bank of America and Wachovia Corp. each got $15 billion of the 1.1 percent TAF loans, followed by Royal Bank of Scotland’s RBS Citizens NA unit with $10 billion, Fed data show.

So once the financial crisis was over, were adjustments made to the financial system to make sure that this type of thing would never happen again?

Of course not.

Today, the "too big to fail" banks are larger than ever. The total assets of the six largest U.S. banks increased by 39 percent between September 30, 2006 and September 30, 2011.

So now they are more "too big to fail" than ever.

But this is what happens when we allow unelected central bank bureaucrats to run our financial system.

Most Americans do not realize this, but the truth is that the Federal Reserve is not part of the government. In fact, it is about as "federal" as Federal Express is. The Federal Reserve has admitted that they are a privately owned institution in court many times, and you can see video of a Federal Reserve employee admitting that the Federal Reserve is privately owned right here.

The Federal Reserve is an out of control monster that is throwing around trillions of dollars whenever it wants to. Nobody should be allowed to do this. Nobody should be allowed to give bailouts to banks and corporations without the express permission of the U.S. Congress and the president of the United States.

This is a point that I made in my article yesterday. The Federal Reserve decided this week that it is going to provide "liquidity support" to Europe. If the American people do not like this move, that is just too bad. We do not get a say in the matter.

Are you starting to understand why I keep pushing the idea that it is time to shut down the Federal Reserve?

Please share this information about the secret 16 trillion dollar Federal Reserve bailout with your family and your friends.

If we can get enough people to wake up, perhaps there is still time to change the direction that this country is headed.

From the Economic Collapse Blog

Video: The Fed Grants $7.77 Trillion in Secret Bank Loan - Now Do You Understand Occupy Wall Street?

Kucinich bill seeks to end the Federal Reserve:

Kucinich bill seeks to end the Federal Reserve!
http://www.godlikeproductions.com/forum1/message1718844/pg1
Kucinich bill seeks to end the Federal Reserve
http://www.rawstory.com/rs/2011/12/01/kucinich-bill-seeks-to-end-the-federal-reserve/

Related:

WHAT THE HELL? The U.S. Secretly loaned 7.7 TRILLION To Banks Without Interest. Then Borrowed Back WITH Interest
http://www.godlikeproductions.com/forum1/message1718942/pg1

America's Next TARP Model
http://www.thedailyshow.com/watch/thu-december-1-2011/america-s-next-tarp-model

A Bloomberg report reveals that the U.S. government loaned banks $7.7 trillion in secret bailout funds at no interest and then borrowed the money back at interest.
Bloomberg reports 7.7 trillion in loans to big banks and Wall Street
http://reading-sage.blogspot.com/2011/11/bloomberg-reports-77-trillion-in-loans.html?m=1pg1

h/t to Jean Stoner

Don't Let Obama "Devour" Your Wealth!

Obama's Dangerous "Eating Problem." Don't Let it Gobble You Up...

Dear Concerned American,

President Obama keeps lecturing about our “obesity epidemic.” But he’s the one who can’t stop eating (or smoking)!

No, not food. It’s worse! Obama is devouring the entire free-enterprise system.

In his first 100 days as president, Obama gobbled up two major automakers, wolfed down nearly 600 banks, gorged on blue-chip companies, and scarfed down the U.S. credit industry. Now he wants dessert.

President “Obama the Hungry” makes King Henry VIII look like a compulsive dieter!
I know something about overeating. It can kill you. Back when I was governor of Arkansas, I was so overweight I developed Type II diabetes. Doctors told me to lay down the knife and fork -- or else. That scared me. I cut the calories and lost 110 pounds. Only then did I regain my health.

Does bloat scare Obama? Heck no. He’s hungry for more! Fresh from gulping down $800 billion of our money to load up his Washington smorgasbord, he’s planning yet another massive banquet. Obama wants to belly up to the table and swallow the best health care system in the world. And you and I will pay the tab for this gargantuan pig-out!

As sure as heartburn follows a chili-dog, this massive “Obama-binge” will trigger hyperinflation. There’s only one way for the President to pay for this feast and you know what it is. Yes, get those presses rolling and print trillions of inflated dollars.

I’ll bet you’re thinking -- well, what can I do about it? True enough, Obama can pretty much do what he wants -- at least until the 2010 mid-term elections come along and we Americans can send him a “slim-down or else” message.

But right now, you and I need to protect the money we’ve earned and invested over the years -- before Obama’s hyperinflation chews our buying power down by multiple percentage points. This is a serious concern, believe me. It’s so serious I won’t pretend, as a politician and talk-show host, to have the answers for you. But I know someone who does.

I urge you to consider the proven financial guidance of Doug Fabian -- the renowned investing advisor who saw the financial meltdown of 2008 coming and saved a whole lot of people a whole lot of money.

Subscribers to Successful Investing, Doug’s newsletter, knew the meaning of terms like “housing bubble” and “sub-prime” long before they became headline news and the source of financial misery for millions.

This is what Doug wrote in 2006, nearly two years before the crash:

“Pay little heed to the real estate industry’s PR campaign to play down the coming housing price slump. It’s happening. The bottom is falling out for many banks, investors, and homeowners right now.”

This is what Doug is writing today:

“Never mind the endless speculation about inflation and interest rates -- they’re going up.”

Doug ’s not just warning his readers about hyperinflation, he’s steering them to investments that make money during inflationary periods. He reminds us that many fortunes were made in the 1970s when America was ravaged by high inflation and brought to the brink of collapse by Jimmy Carter -- a president eerily similar to Barack Obama.

Look, I’m no investing wizard. But I invest. I have to. So do you. Counting on Social Security while Obama is in office is a little like saying, “The Light Brigade is about to charge? Sign me up!”

But having someone with the proven know-how and track record of Doug Fabian is a comfort. That’s some track record, by the way. Successful Investing has generated double-digit annual returns for ordinary investors for 32 years and counting. Best of all, Doug does all the work for you.

Don’t just take my word. Investor’s Business Daily called Doug “one of the best market timers in the business.” And The Hulbert Financial Digest -- the watchdog of investing newsletters -- rated Doug’s trading services in the Top 10 for 2008 -- out of 186 financial publications over all.

Count on it, the “Obama-binge” will result in hyperinflation. ($800 billion in government spending makes it all but inevitable). You can’t control that. But when the day of reckoning comes, you can be one of the few whose portfolio is already adapted to profit from it. Could you ask for anything better? Well, you can. But you’ll have to wait till 2012 before we elect a new president!

Sincerely,

Mike Huckabee

Biden Acknowledges Administration 'Misread' The Economy

Vice President Biden acknowledged today that the administration underestimated the depth of the economic recession months ago as it prepared a recovery package that is only now beginning to take effect.

"We misread how bad the economy was, but we are now only about 120 days into the recovery package," Biden said on ABC's "This Week." "The truth of the matter was, no one anticipated, no one expected that that recovery package would in fact be in a position at this point of having distributed the bulk of the money."

Figures released last week showed that the national unemployment rate has reached 9.5 percent, and that the economy is still shedding nearly half a million jobs a month. In reality if you factor in all the people who have dropped off the unemployment roles but haven’t found work, the unemployment figure is actually at 16% and then their are two 4 other groups to factor in… people who have lost their jobs but got severance package so either haven’t hit the unemployment rolls yet or won’t qualify, people who lost their jobs over the past 3 to 4 years who gave up looking to replace their employment as the economy started its march downward, students who graduated this past year who have never found employment other than the part-time jobs they had in school, and the group which includes seniors and people who were previously out of the job market that have to go back to work because they’ve lost their investments that they counted on to supplement their incomes.

President Obama pushed through a $787 billion stimulus package within his first month in office to slow the economic slide by replacing retreating private-sector demand, in part, with government spending.

But criticism has been mounting from the left and right, albeit for different reasons, that the plan was misconceived.

Administration officials have argued for weeks that the economic projections made before Obama took office presented an overly optimistic view of the economy, a case Biden reiterated in blunt terms today.

Conservative critics have used the mounting job losses to argue that the stimulus package - a mix of government spending and tax cuts - should have been titled more toward the latter than it was.

Meanwhile, liberal economists such as Paul Krugman have argued for more public spending, just as the stimulus money begins trickling into the economy.

After acknowledging the economic "misreading," Biden said "the second question becomes, did the economic package we put in place, including the Recovery Act, is it the right package given the circumstances we're in?"

"And we believe it is the right package given the circumstances we're in," he said.

Asked if a second stimulus package is needed, Biden said it is "premature to make that judgment."

Instead, he said, the administration will monitor the effect of the government spending in the coming months, as the public-works projects financed by federal funds move from the planning stage to the hiring and construction phase.

"And so this is just starting," Biden said. "The pace of the ball is now going to increase."

By Scott Wilson

Wow… Is anyone surprised. Everyone I know could have told them this and come up with better and less intrusive solutions without all their experts, czars and Ivy League educations. The unemployment situation is much worse the administration’s figures show, the bank bailouts and stimulus plan is a failure with virtually no funds ever trickling down under Joe’s watch, nobody can get a loan and the next crisis is, created by this administrations and their unbridled spending in all areas is the next crisis. Ask Marion~

Yanina Manolova / AP

National Debt Clock... Tick Tock

Posted: Daily Thought Pad

Related Resources:

• President Trump? What If?
• Economists Point to Rising Debt as Next Crisis
• Catastrophe or Catastrophe CD
• Glenn Beck's Common Sense

Frank Buckles: America's Last Living World War I Veteran

By the U.S. Department of Veterans Affairs

Originally Published: February 6, 2008 – Updated July 3, 2009

In 1917 – more than 90-years ago -- the United States entered the Great Conflict in Europe. Sixteen-year-old Frank Buckles decided he wanted in, too. He figured he could fib about his age; say he's 18. But the Army recruiter told him, "No good: you need to be 21." So he kept shopping around until finally, he found a recruiter who believed him when he said his home state of Missouri didn't keep birth records when he was born; it's back home on the farm, an entry in the family Bible.

Frank Buckles

Soon, young Frank was "Over There" in England. His ultimate goal was France where the action was. It took him a while but eventually he made it, thanks to some sage advice.

"An old sergeant said, if you want to get to France in a hurry, then join the ambulance service," Frank recalls. "The French are big for ambulance service."

Of the two surviving World War Oneveterans in North America today, Frank Buckles is the only remaining World War I veteran who actually saw the war in Europe.

"I had many different assignments," Frank says, "and I was doing things that I thought were important... no, I didn't either: I didn't think they were important. But I found out afterwards when I read up on my history that some of the things that I did were quite important."

Being an ambulance driver, Frank didn't see combat but he saw plenty of casualties. And after the armistice, he delivered German POWs back to the Fatherland, a foreshadowing of his own fate 20 years later.

After two years in the Army, Frank went out to see the world and worked for the White Star Line of Titanic fame. For the next 20-years, he lived the life of a merchant seaman.

By 1941, the shipping business had taken Frank to the Philippines. On December 8th, he and millions of Filipinos experienced their own horrific version of Pearl Harbor when the Japanese invaded the islands. Ironically, although Frank served in only one world war, he suffered in two.

For the next three and a half years, Frank was a prisoner of war. It was a harsh, brutal experience. Frank ended up at Los Baños, a former university campus that had been converted into an internment camp for more than 2,000 civilians. He kept himself and his fellow prisoners mentally sharp by focusing on the physical: every day, he led the group in rigorous calisthenics. Finally, in 1945, the Los Baños prisoners were rescued in a daring raid by paratroopers from the 11th Airborne Division. When Frank emerged from Los Baños, he was 100 pounds lighter than when he entered.

At war's end, Frank returned to the States. He fell in love with a California girl and she agreed to settle down with him in the beautiful northwest corner of West Virginia: the Buckles' ancestral homeland. Frank and Audrey bought and restored a charming 18th century stone farmhouse. Fifty-three years later, he's still there. Although Audrey passed away in 1999, their daughter Susannah and her husband now spend much of their time running the farm – with Frank. Frank was still out working the tractor at the age of 103.

Today, Frank surrounds himself with family and friends, books and mementos from a life filled with journeys and adventure. In his private study is home to dozens of books about World Wars One and Two. His larger library contains more than a thousand volumes. Even now, Frank continues his life-long passion of reading. But not the reading of just anything; Frank is an unabashed student of history. He has no time for fiction.

Frank says, "Why should I read something someone made up when real events are so interesting?"

When asked his secret to a long life, Frank has a quick answer at the ready: "Be prepared," he jokes. But the longer answer may lie in the independent way he's always led his life. Frank Buckles neatly fits the profile that gerontologists point to as ideal: he's had a life-long passion for reading and learning; an ongoing interest in foreign languages and culture; and has been physically fit his entire life.

Years ago, Frank made a sentimental journey to his father's farm in Missouri, the place of his birth. There he spotted the old bell that his father rang the day he was born in 1901. He made the current farmer an offer and bought it on the spot. Today on his farm in West Virginia –107 years later – that same bell rings loud and clear for Frank Woodruff Buckles: a National Treasure.

Frank Buckles is now 108 and still going great guns, motivated by his goal to honor his fellow WWI brothers. He was interviewed for the 4th of July 2009 by Fox News. He humbly said he didn’t do much while he was serving in Europe, but those that served with him did and deserve a Memorial in Washington D.C. on par with those for the other great American Wars!! The U.S. government finally agrees and is upgrading the WWI Memorial in Washington D.C. with TARP Stimulus money.

Related Links:

• 1 Known WWI Veteran Left After Bay Area Man Dies
• Veterans Call for Flags to Fly Upside Down

Posted: Daily Thought Pad

The Letter – Sent to Glenn Beck

The American Dream Is Over Unless Average Americans Stand-Up… Starting Today!!

GLENN: I got a letter from a man in Arizona. He writes an open letter to our nation's leadership: I'm a home grown American citizen, 53, registered Democrat all my life. Before the last presidential election I registered as a Republican because I no longer felt the Democratic Party represents my views or works to pursue issues important to me. Now I no longer feel the Republican Party represents my views or works to pursue issues important to me. The fact is I no longer feel any political party or representative in Washington represents my views or works to pursue the issues important to me. There must be someone. Please tell me who you are. Please stand up and tell me that you are there and that you're willing to fight for our Constitution as it was written. Please stand up now. You might ask yourself what my views and issues are that I would horribly feel so disenfranchised by both major political parties. What kind of nut job am I? Will you please tell me?

Well, these are briefly my views and issues for which I seek representation:

One, illegal immigration. I want you to stop coddling illegal immigrants and secure our borders. Close the underground tunnels. Stop the violence and the trafficking in drugs and people. No amnesty, not again. Been there, done that, no resolution. P.S., I'm not a racist. This isn't to be confused with legal immigration.

Two, the TARP bill, I want it repealed and I want no further funding supplied to it. We told you no, but you did it anyway. I want the remaining unfunded 95% repealed. Freeze, repeal.

Three: Czars, I want the circumvention of our checks and balances stopped immediately. Fire the czars. No more czars. Government officials answer to the process, not to the president. Stop trampling on our Constitution and honor it.

Four, cap and trade. The debate on global warming is not over. There is more to say.

Five, universal healthcare. I will not be rushed into another expensive decision. Don't you dare try to pass this in the middle of the night and then go on break. Slow down!

Six, growing government control. I want states rights and sovereignty fully restored. I want less government in my life, not more. Shrink it down. Mind your own business. You have enough to take care of with your real obligations. Why don't you start there.

Seven, ACORN. I do not want ACORN and its affiliates in charge of our 2010 census. I want them investigated. I also do not want mandatory escrow fees contributed to them every time on every real estate deal that closes. Stop the funding to ACORN and its affiliates pending impartial audits and investigations. I do not trust them with taking the census over with our taxpayer money. I don't trust them with our taxpayer money. Face up to the allegations against them and get it resolved before taxpayers get any more involved with them. If it walks like a duck and talks like a duck, hello. Stop protecting your political buddies. You work for us, the people. Investigate.

Eight, redistribution of wealth. No, no, no. I work for my money. It is mine. I have always worked for people with more money than I have because they gave me jobs. That is the only redistribution of wealth that I will support. I never got a job from a poor person. Why do you want me to hate my employers? Why ‑‑ what do you have against shareholders making a profit?

Nine, charitable contributions. Although I never got a job from a poor person, I have helped many in need. Charity belongs in our local communities, where we know our needs best and can use our local talent and our local resources. Butt out, please. We want to do it ourselves.

Ten, corporate bailouts. Knock it off. Sink or swim like the rest of us. If there are hard times ahead, we'll be better off just getting into it and letting the strong survive. Quick and painful. Have you ever ripped off a Band‑Aid? We will pull together. Great things happen in America under great hardship. Give us the chance to innovate. We cannot disappoint you more than you have disappointed us.

Eleven, transparency and accountability. How about it? No, really, how about it? Let's have it. Let's say we give the buzzwords a rest and have some straight honest talk. Please try ‑‑ please stop manipulating and trying to appease me with clever wording. I am not the idiot you obviously take me for. Stop sneaking around and meeting in back rooms making deals with your friends. It will only be a prelude to your criminal investigation. Stop hiding things from me.

Twelve, unprecedented quick spending. Stop it now.

Take a breath. Listen to the people. Let's just slow down and get some input from some nonpoliticians on the subject. Stop making everything an emergency. Stop speed reading our bills into law. I am not an activist. I am not a community organizer. Nor am I a terrorist, a militant or a violent person. I am a parent and a grandparent. I work. I'm busy. I'm busy. I am busy, and I am tired. I thought we elected competent people to take care of the business of government so that we could work, raise our families, pay our bills, have a little recreation, complain about taxes, endure our hardships, pursue our personal goals, cut our lawn, wash our cars on the weekends and be responsible contributing members of society and teach our children to be the same all while living in the home of the free and land of the brave.

I entrusted you with upholding the Constitution. I believed in the checks and balances to keep from getting far off course. What happened? You are very far off course. Do you really think I find humor in the hiring of a speed reader to unintelligently ramble all through a bill that you signed into law without knowing what it contained? I do not. It is a mockery of the responsibility I have entrusted to you. It is a slap in the face. I am not laughing at your arrogance. Why is it that I feel as if you would not trust me to make a single decision about my own life and how I would live it but you should expect that I should trust you with the debt that you have laid on all of us and our children. We did not want the TARP bill. We said no. We would repeal it if we could. I am sure that we still cannot. There is such urgency and recklessness in all of the recent spending.

From my perspective, it seems that all of you have gone insane. I also know that I am far from alone in these feelings. Do you honestly feel that your current pursuits have merit to patriotic Americans? We want it to stop. We want to put the brakes on everything that is being rushed by us and forced upon us. We want our voice back. You have forced us to put our lives on hold to straighten out the mess that you are making. We will have to give up our vacations, our time spent with our children, any relaxation time we may have had and money we cannot afford to spend on you to bring our concerns to Washington. Our president often knows all the right buzzword is unsustainable. Well, no kidding. How many tens of thousands of dollars did the focus group cost to come up with that word? We don't want your overpriced words. Stop treating us like we're morons.

We want all of you to stop focusing on your reelection and do the job we want done, not the job you want done or the job your party wants done. You work for us and at this rate I guarantee you not for long because we are coming. We will be heard and we will be represented. You think we're so busy with our lives that we will never come for you? We are the formerly silent majority, all of us who quietly work , pay taxes, obey the law, vote, save money, keep our noses to the grindstone and we are now looking up at you. You have awakened us, the patriotic spirit so strong and so powerful that it had been sleeping too long. You have pushed us too far. Our numbers are great. They may surprise you. For every one of us who will be there, there will be hundreds more that could not come. Unlike you, we have their trust. We will represent them honestly, rest assured. They will be at the polls on voting day to usher you out of office. We have cancelled vacations. We will use our last few dollars saved. We will find the representation among us and a grassroots campaign will flourish. We didn't ask for this fight. But the gloves are coming off. We do not come in violence, but we are angry. You will represent us or you will be replaced with someone who will. There are candidates among us when he will rise like a Phoenix from the ashes that you have made of our constitution.

Democrat, Republican, independent, libertarian. Understand this. We don't care. Political parties are meaningless to us. Patriotic Americans are willing to do right by us and our Constitution and that is all that matters to us now. We are going to fire all of you who abuse power and seek more. It is not your power. It is ours and we want it back. We entrusted you with it and you abused it. You are dishonorable. You are dishonest. As Americans we are ashamed of you. You have brought shame to us. If you are not representing the wants and needs of your constituency loudly and consistently, in spite of the objections of your party, you will be fired. Did you hear? We no longer care about your political parties. You need to be loyal to us, not to them. Because we will get you fired and they will not save you. If you do or can represent me, my issues, my views, please stand up. Make your identity known. You need to make some noise about it. Speak up. I need to know who you are. If you do not speak up, you will be herded out with the rest of the sheep and we will replace the whole damn congress if need be one by one. We are coming. Are we coming for you? Who do you represent? What do you represent? Listen. Because we are coming. We the people are coming.

Glenn Beck's Common Sense

Source: GlennBeck.com

Posted: Daily Thought Pad

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• Catastrophe
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Banks to return $68 billion in bailout money

New York buildings are reflected in the window of a Capital One bank office window. The Treasury Department said Tuesday it will allow 10 of the nation's largest banks to repay $68 billion in government bailout money. (AP File)

Ten of the nation’s biggest financial companies got a green light Tuesday to return $68 billion in federal bailout money — freeing the banks from limits on executive pay and leaving the government with a small gain on the rescue cash.

While the paybacks could be a signal that the banking industry is stabilizing, analysts say it is far from a clean bill of health, and some said it was too soon to let the banks give back the money.

Presidential spokesman Robert Gibbs said the returned money would go “back into general revenue” and could even be used to bail out banks again. (And this seems to be the plan… Many banks have wanted to repay stimulus money before but were not allowed because they weren’t ready… per the administration. But now that people are starting to get fed up and money sources are drying up, they need the money, they will take the pay back and do it all again.

Still, the government has collected $1.8 billion from dividends on shares of preferred stock it received in exchange for bailout money, he said. And the government still holds warrants to buy shares of bank stock at cut-rate prices in the future.

The $68 billion in paybacks would be the largest since the $700 billion Troubled Asset Relief Program took effect eight months ago at the peak of the financial crisis. Specifically, the money comes from a $250 billion slice of the $700 billion bailout package.

Other chunks of the $700 billion will be harder, if not impossible, to recover. Some of it, such as $70 billion funneled to failed insurer American International Group Inc., ended up in the pockets of healthier banks that did deals with AIG.

And even the banks getting out from under the TARP still rely on government support, including debt guarantees from the Federal Deposit Insurance Corp. and credit lines from the Federal Reserve.

The banks chafed under restrictions on executive pay imposed by the government for banks that took bailout cash, arguing they were losing top talent to other firms. The administration is expected to roll out new executive pay rules Wednesday that would apply to banks that still have TARP money.

“It’s our obvious hope that additional money is not going to have to be used to stabilize banks,” Gibbs said. “I certainly wouldn’t rule it out.”

Indeed, banking experts stressed that the payments do not signal an end to the financial crisis. In fact, they say, most banks approved to pay the money back never needed it in the first place.

And three major banks that have not been approved by the government to pay the money back — Citigroup Inc., Bank of America Corp. and Wells Fargo & Co. — could need federal help for years to come.

“When a troubled bank is capable of repaying, that would be significant,” said Barry Ritholtz, head of the financial research firm FusionIQ. “But we’re not going to see that anytime soon because they can’t afford it.”

Among the banks approved to pay back their bailout cash are eight that passed the government “stress test” earlier this year: JPMorgan Chase & Co., American Express Co., Goldman Sachs Group Inc., U.S. Bancorp, Capital One Financial Corp., Bank of New York Mellon Corp., State Street Corp. and BB&T Corp.

Those banks had to show they could raise private capital without federal guarantees before getting permission to pay back TARP money.

Morgan Stanley did not pass the test, but got approval to return its bailout money after quickly raising enough capital. And Northern Trust Corp. did not undergo the “stress test” but said it also had received permission to repay its bailout money.

President Barack Obama welcomed the news but said: “This is not a sign that our troubles are over — far from it.”

Indeed, the repayments carry risk. Some say it could create a banking system of winners and losers, with weaker banks stuck with federal restrictions and finding it harder to compete for customers and talent against rivals that operate more freely.

Others say the repayments could conceal problems in the banking industry. Smaller banks are still saddled with billions in risky commercial real estate loans. And large banks still hold the toxic mortgage-backed assets at the heart of the financial crisis.

Paying the government back leaves banks with less protection against future losses, said Christopher Whalen, managing director of the consulting firm Institutional Risk Analytics. And with less capital on hand, they may have to scale back lending.

Other critics said it was dangerous to allow the money to be paid back before the administration overhauls the regulatory framework that governs banks.

“The credit crisis made it clear that the banks acted in irrational and greedy ways. I don’t believe that enough changes have really happened yet,” said Donald Thomas, an independent research analyst.

Adding to the concerns, a report released Tuesday by the congressional panel overseeing the bailout said the hypothetical scenarios used in the “stress tests” might have been too rosy.

That raises the troubling possibility that even raising enough capital to satisfy the government won’t guarantee banks can withstand a deeper recession. And that means the banks might have to seek more federal aid.

Citi and Bank of America, two of the most troubled financial institutions, have taken $45 billion each in bailout money. Wells Fargo said it has not asked for permission to pay back $25 billion in TARP money.

Banking analyst Bert Ely said it could be years before those banks disentangle themselves from the government.

More than 600 banks have received a total of almost $200 billion from the TARP, and 22 smaller banks have already paid the money back. The $1.8 billion in dividend money includes stock the government owned in these smaller banks.

Besides the preferred-stock dividends, the banks that took bailout money issued warrants that give the government the right to buy bank stock at a fixed price later. Bank stocks have been battered but are expected to rise as the economy recovers, so the warrants could deliver substantial profits to taxpayers.

Or the government could sell the warrants back to the banks “at fair market value,” the Treasury Department said — presumably also locking in profits for the taxpayers.

Testifying before a Senate panel, Treasury Secretary Timothy Geithner said the value of the warrants for banks permitted to repay TARP funds are in the “several billion dollar range.”

But it sounds like Secretary Geithner’s understanding might not always be right on…~ Geithner said, after his visit to China that “the Chinese have justifiable confidence in our economy”. Yet other reports, including from Illinois Congressman Kirk, say that China is very uneasy and concerned about the U.S. economy. A telling moment was when a round of laughter broke out as Tim Geithner was speaking in China and said “your investments are secure”; the rudeness of laughing at someone virtually never happens in China. M~

By: Stevenson Jacobs and Daniel Wagner - Associated Press
06/09/09 7:44 PM EDT

This week we will be selling treasury bonds (T-bills). The question is who will buy them… Who wants to luck up their money our future for 30-years? Who buys those bills could make a huge difference in all our lives!

Posted: Daily Thought Pad

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White House Set to Appoint a ‘Pay’ Czar

WASHINGTON -- The Obama administration plans to appoint a "Special Master for Compensation" to ensure that companies receiving federal bailout funds are abiding by executive-pay guidelines, according to people familiar with the matter.

The administration is expected to name Kenneth Feinberg, who oversaw the federal government's compensation fund for victims of the Sept. 11, 2001, terrorist attacks, to act as a pay czar for the Treasury Department, these people said.

Kenneth Feinberg, who oversaw payouts to 9/11 victims, will keep tabs on executive pay at companies in bailout.

Mr. Feinberg's appointment could be announced as early as next week, when the administration is expected to release executive-compensation guidelines for firms receiving aid from the $700 billion Troubled Asset Relief Program. Those companies, which include banks, insurers and auto makers, are subject to a host of compensation restrictions imposed by the Bush and Obama administrations and by Congress.

Wall Street has been anxiously awaiting more details on how the rules will be applied. "The law is confusing and a bit ambiguous, and so we're looking for certainty as to how to structure pay incentives," said Scott Talbott, senior vice president of government affairs for the Financial Services Roundtable, a trade association.

The move comes amid a series of sometimes-overlapping efforts to curb pay at financial firms following perceived industry excesses that led to the lending boom and bust.

The Obama administration earlier this year issued guidelines that include limiting salary for top executives at some firms receiving TARP funds and requiring that additional pay be in the form of restricted stock, vesting only after the company repays its debt, with interest, to the government. Congress then chimed in with even tougher rules curbing bonuses for top earners at firms receiving TARP money. As part of that effort, lawmakers barred those firms from paying top earners bonuses that equal more than a third of their total compensation.

The White House has been wrestling with how to marry those two efforts, which in combination are more punitive than administration officials had intended.

The government is also pursuing a separate revamping of financial-sector rules that could change industry compensation practices more broadly. For instance, the Federal Reserve is considering rules that would curb banks' ability to pay employees in a way that would threaten the "safety and soundness" of the bank.

Mr. Feinberg is expected to focus on pay restrictions related to firms receiving TARP bailout funds, helping companies to interpret the rules and ensure that they are being followed.

For instance, companies have been confused about whether to pay 2008 bonuses, since restrictions on incentive pay didn't go into effect until early 2009. Some firms have made the payments while others have held off. Many firms are also unsure whether the "top earners" targeted by Congress include rank-and-file employees or just executives.

Comments - “Obama is establishing a new cabinet of officials who are accountable only to him. This is an unprecedented power grab.” — Kathryn Reagan

Mr. Feinberg will report to Treasury Secretary Timothy Geithner, but he is expected to have wide discretion on how the rules should be interpreted. Firms likely won't be able to appeal decisions that Mr. Feinberg makes to Mr. Geithner, according to people familiar with the matter.

Mr. Feinberg, founder and managing partner of the law firm Feinberg Rozen LLP, spent several years overseeing payouts totaling more than $7 billion to victims of the 9/11 attacks. He personally reviewed every claim, approving or denying awards and allocating sums to be paid out of the Treasury.

By Deborah Solomon - contact at deborah.solomon@wsj.com

Printed in The Wall Street Journal, page A2

Source: Knowledge Creates Power

Posted: Marion’s Place

How Obama’s Socialism Works

President Obama's vision of the future is, apparently, an economy guided, steered and -- when the occasion demands -- commanded by the federal government. Some of the companies will remain private. Washington will take others over. But all will look to the White House, as to an orchestra conductor, for signals as to how and when and where to proceed. (Sounds like a blend of socialism and fascism).

This summary is the vision that emerges from the Chrysler bailout.

Whether or not one believes the claims of attorney Thomas Lauria (I do) that the investment bank Perella Weinberg Partners was strong-armed by the administration, the fact remains that the four firms that accepted the piddling offer of 29 cents on the dollar are all awash in Troubled Asset Relief Program (TARP) money.

Citigroup, Morgan Stanley, Goldman Sachs, and JPMorgan Chase all dutifully approved the offer from Washington, while Perella Weinberg reportedly held out for 50 cents. Did the combined $90 billion the four compliant firms owed Washington in TARP funds make a difference in their passive acquiescence? You bet it did.

They shouldn't have said yes. Clearly, Obama was not about to pull the trigger, which would have sent tens of thousands of autoworkers straight into unemployment. Politically, he would have had no choice but to cough up the $4.5 billion loan the feds just gave Chrysler with or without a debt settlement. The political pressures that have always operated on this Democratic president are still there and still in play.

Knowing the ultimate vulnerability of the administration position, any investment bank that was looking out for its clients would have demanded more than 29 cents. But Citigroup, Morgan Stanley, Goldman Sachs, and JPMorgan Chase all had a higher calling -- they had to appease King Barack I. To its credit, Perella Weinberg put its investors first.

But this little vignette shows exactly what the new rules of the game will be under this administration. It won't be Soviet-style socialism or Reaganesque capitalism. The system will more resemble the Japanese arrangement where MITI, the Ministry of Trade and Industry, informally guided companies and told them what to do. In Japan, a nod usually suffices to command. In the United States, one has to use a hammer. But the result will be the same: compliant capitalism.

Companies will not look out for their shareholders or their employees or even their customers so much as watch the smoke signals from Washington to decide what to do. The markets won't control decisions. Washington will.

The same balance of government control and nominal private ownership is evident in the mortgage rescue plan and the efforts to rekindle consumer lending. It will be manifest in the cap-and-trade legislation and in the priority that the administration will accord to green lending and job creation.

The strong-arming that obviously led up to the Chrysler deal will also be typical of the Obama industrial policy. When the chips are down, JFK's pressure on U.S. Steel to lower its prices in 1962 will be the model for the Obama years. While terrorists need not fear any violation of their constitutional rights, CEOs of Fortune 500 companies will not be so fortunate.
At the core of the new policy will be the simple assumption that Washington knows best.

But it doesn't. The stagnation of the Japanese economy in the past 20 years is eloquent testimony to the fact that government usually gets it wrong. Sometimes it makes the wrong decision because it fails to anticipate the market (as Japan did when it downplayed laptop computers and stressed mainframes). More often (as is normal in Japan), it is so in the thrall of special interests that it ends up articulating a consensus of those who would divide up the pie among them.

One way or another, the government usually runs the economy into the ground, as it will under King Barack I.

By DICK MORRIS
Published on TheHill.com on May 5, 2009

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Posted: Daily Thought Pad

Hoover and FDR

It seems as though history continues to repeat itself. During the first 'great depression,' Herbert Hoover was President at the outset. He instigated the things FDR would later enlarge upon, none of which worked. Now we are in the beginning of the second 'great depression,' and it's almost exactly the same scenario. George Bush started the plunge downhill with his $720 billion TARP nonsense, which most of the Republicans voted for, including John McCain, but not of course, Ron Paul. Now, with Obama as President, he is enlarging the things Bush started, just as FDR enlarged the things Hoover began, and history is repeating itself. Now, instead of $720 billion, it's said that it will be $10 trillion before it's over, and I hope being "over" doesn't mean the entire US economy, but it might well be. As in the days of Hoover and FDR, none of the 'stimulus' worked, as it still won't. Henry Morgenthau, FDR's Secretary of the Treasury, said that all the spending "hasn't worked," and he was correct. It took WW II to get us out of the first great depression, and we can pray that it won't take the same to get us out of the second great depression.

One big difference, as I have written before, is that during the Hoover-FDR first great depression, there was absolutely no inflation. None. Why? Because the dollar was backed by gold! It was illegal to print trillions of paper dollars during the first great depression. That's why FDR tried to get everyone to turn in their gold. He could then spend more gold-backed dollars. Also, there were no credit cards, no interstate roads, and virtually no air travel. Stocks were being sold with little or no down payment, just as homes were being sold for the same requirements during the second great depression. During the first great depression, there were no trillion-dollar credit card debts. During the first great depression, stocks plunged as they have done now, but perhaps a little bit further. Then, there was no PPT or plunge protection team to keep the stock market artificially high; and you can bet your bottom dollar that the PPT has been busy of late.

Speaking of stocks, can anyone give me a reason why they have gone up a thousand points, other than the PPT? 650,000 or more each week are getting laid off, businesses by the thousands go bankrupt or close each week, prompting even more layoffs, and the chain reaction continues. One of my clients says that stocks are going up because during a hyperinflation, everything goes up, and that is a good point, but there are no profits anywhere, so I think that argument my not be totally true. I honestly do believe that gold and the Dow will cross eventually, with the Dow on its way down and gold on its way up. Gold and silver will NEVER go to zero like paper assets (sic) can and have done and will continue to do. With hyper inflation, gold and silver will be made to go up even further than other prices, I believe, because more and more people are seeing the beauty of tangible beautiful, historic money, in the form of gold and silver, and there is only so much of it out there. As it becomes more and more difficult to get, due to increased demand, prices of metals will have to go sky high in dollars.

We drove over 3200 miles the week before last, mostly in Texas, and going to and from there. The Blue Bonnets are out and beautiful, but even in Texas, the economy isn't good at all. While Texas houses haven't plunged like Las Vegas, California, and Florida, it's because they never got that high in the first place. Still, layoffs are plentiful, and tourism, motels, and other non-essentials are hurting...even in Texas. Closed auto dealerships are plentiful, and in one wonderful German restaurant, which used to have people waiting around the block on a Friday evening, we were seated instantly. The second great depression is going to leave an unemployment rate of close to 20% before it's over and all the spending and bailouts are merely postponing the inevitable, and making it worse with hyperinflation. The term "trillion" was unheard of a couple of years ago, as far as deficits are concerned, and now that term is thrown around like penny candy at a fair 50 years ago.

I don't believe in fixes and I've said so repeatedly. Sometimes the piper has to be paid. Whiskey credo number three: Sometimes there is no forgiveness, only punishment.

The megalopolis and its populations are going to melt back into town and country. The ravages of private and public debt won't be avoided...especially not by more private and public debt.
I wouldn't do a damned thing to "fix" this. I'd let it play out because tampering would only make the outcome worse in the end. Alas, most of the world and all those in power believe that there is a way to wiggle out of this mess...so tamper they will.

Prepare yourselves as best you can It's going to get more and more interesting...

Regards,
Gary Gibson
Managing Editor, Whiskey & Gunpowder

And BTW… It really is time to stop blaming Bush…  The difference between $720 Billion and almost $11 Trillion is staggering, and when Obama came to office only half the TARP money was spent.  Obama and the present Democratic Congress own this present problem!!

The U.S. Government needs to stop this crazy spending…  And remember, those that do not know and understand history are destined to repeat it… and repeat it… and repeat it!!

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Source:  KnowledgeCreatesPower

Stop Spending Our Future... STOP!!!

Quote: "We are committing Generational Theft!", John McCain

Talking about YouTube - Stop Spending Our Future - STOP

A Crisis That Obama Won't Waste

This economic crisis is too useful for Obama to want it to end. When Rahm Emanuel -- and later Hillary Clinton -- spoke of "never letting a good crisis go to waste," many people were shocked. But now Obama seems to embody the corollary: that the crisis should continue until he has thoroughly milked it to reshape American politics, society and the economy.

As with Faust, it seems that this "given moment ... he wishes to endure forever." Unlike Faust, however, he will not lose his "life and soul" to such a wish. He'll sacrifice ours, instead.

First came the "stimulus package." With only about $185 billion of its $800 billion in spending to be disbursed in 2009, Obama clearly never intended the money to be about stimulus but wanted the need for a stimulus to trigger the spending he wanted anyway.

Then came the TARP funding, often forced down banks' throats. Now comes word that even as banks want to return the money, the Treasury is making them keep it. One source at a TARP bank reports that Geithner is insisting that banks go through their "stress test" before refunding the TARP money. As Stuart Varney speculates in The Wall Street Journal, Obama wants the banks to keep the money so he can enforce his regulations on them.

Now comes Geithner's plea for extra regulatory powers and Obama's concession to global economic regulation at the G-20 summit. Both moves are game changers for any major American business. Geithner wants the power to take over any business -- presumably in any field -- whose failure would imperil the national economy. Today it's banks, brokerage houses, car companies and insurance firms. Tomorrow? Who knows?

And Obama agreed to agree on international "high standards" for the regulation of all "systemically important" companies to be promulgated by the new global Financial Stability Board (FSB). The United States, occupying one of 20 chairs on the FSB board (21 if we count the European Union), will come to a consensus with other central bankers from the G-20 nations on what these regulations should say. Then the Securities and Exchange Commission, the Federal Reserve and the other regulatory arms of the U.S. government will impose them on our economy.

Some have objected that Congress needs to be consulted -- but as long as the agreements are "voluntary" and the U.S. agencies are merely "asked" to impose the regulations, no further grant of congressional authority is needed. But, of course, there will be nothing voluntary about the administration's demand that the agencies implement the coming FSB directives, no matter how intrusive they may be.)

And, finally, there is Obama's delegation of a total overhaul of the tax code to a commission headed by Paul Volker with a mandate to report back in December of this year.

So with the tax code totally changing, Europe about to formulate regulations for our economy, the U.S. government empowered to take over any large company, the deficit and spending reaching unbelievable levels and the feds insisting on continued control of banks, what businessman in his right mind is going to invest in anything? How could even the most foolish optimist pull the trigger on a business investment without knowing the tax consequences, the regulatory framework and the policy of the banks on lending?

But Obama knows all this. He knows that his steps will delay economic recovery. But he wants these changes not as means to an end, but as the end itself. And he is determined to get them passed and set in stone while the rubric of "crisis" justifies his doing so.

He is not unlike a leader who takes his country into war, knowing that by "wagging the dog" he can reinforce his power.

But ultimately, does Obama care if he is re-elected? Doesn't he know that he needs a good economy to extend his mandate to eight years? Yes, of course he does. But he probably figures that he can turn the economy around as Election Day 2012 draws nearer and reap all the credit then. In the meantime, no good crisis should ever go to waste.

By Dick Morris & Eileen McGann - Morris is a former political adviser to Sen. Trent Lott (R-Miss.) and President Bill Clinton, is the author of Condi vs. Hillary: The Next Great Presidential Race.

Forrest Gump Explains The Banking Mess

Mortgage Backed Securities are like boxes of chocolates. Criminals on Wall Street stole a few chocolates from the boxes and replaced them with turds. Their criminal buddies at Standard & Poor rated these boxes AAA Investment Grade chocolates. These boxes were then sold all over the world to investors. Eventually somebody bites into a turd and discovers the crime. Suddenly nobody trusts American chocolates anymore worldwide.

Hank Paulson now wants the American taxpayers to buy up and hold all these boxes of turd-infested chocolates for $700 billion dollars until the market for turds returns to normal. Meanwhile, Hank’s buddies, the Wall Street criminals who stole all the good chocolates are not being investigated, arrested, or indicted.

Mama always said: ‘Sniff the chocolates first, Forrest’.

Quote of the day from a fund manager:

“This is worse than a divorce… I’ve lost half of my net worth and I still have my wife…”

The bailout–a different perspective:

Back in 1990, the Government seized the Mustang Ranch brothel in Nevada for tax evasion and, as required by law, tried to run it. They failed and it closed. Now we are trusting the economy of our country to a pack of nit-wits who couldn’t make money running a whore house and selling booze?

Posted in Banking, Nationalization, politics at 9:11 am by Administrator - 01.20.09

Permalink

Soros Says TARP Is Poison; Crisis Worse Than 1930s

WASHINGTON -- The stimulus plan the U.S. government is currently considering is necessary to help American citizens, but it will likely not reverse the country's economic decline, hedge fund manager and billionaire philanthropist George Soros said on Monday.

"It is not enough to turn the situation around," Soros told the U.S. Conference of Mayors about the $850 billion proposal to increase spending and cut taxes.

The plan, which was introduced in the U.S. House of Representatives last week and will likely be passed by next month, will help state and local governments balance their budgets and preserve important social services, Soros said.

At the same time, the $700 billion financial bailout known as TARP for Troubled Assets Relief Program had been carried out in a "haphazard and capricious way" and "without proper planning," he said.

"Unfortunately it was misused and the way it it was done has poisoned the well. It has created tremendous ill will toward putting up more money," Soros said.

For more than a year, the United States has been crippled by a recession that was triggered by a housing market downturn. Last summer, financial institutions with exposures to securities backed by bad mortgages began to buckle.

The government stepped in with the TARP to inject liquidity into struggling firms. Last week, President-elect Barack Obama requested Congress release the second half of the funds.

Soros advocated using bailout money to recapitalize banks, but said the $350 billion would not be enough. He said such a move would take more than the entire $700 billion.

The bursting housing bubble "acted like a detonator that exploded a much larger bubble," he said.

"The economies of the world are falling off a cliff. This is a situation that is comparable to the 1930s. And once you recognize it, you have to recognize the size of the problem is much bigger," he said.

Soros said the United States needed "radical and unorthodox policy measures" to prevent a repeat of the Great Depression of the early 20th century that include recapitalizing banks and writing down the country's accumulated debt.

Also, he said, it should create more money to offset the collapse of credit and then rapidly pull that cash out of the system when inflation emerges. The government would have to be very nimble in the timing of such moves, he said.

"If they are successful...the deflationary pressures will be replaced by the specter of inflation and the authorities will have to drain the excess money from the economy almost as quickly as they pumped it in. Of the two operations the second one is going to be, politically, even more difficult than the first," he said.

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