Hundreds of Hands, Billions Of Dollars

Two months ago, the United States Congress passed, and the President signed, the “Great Bailout of 2008”. The Troubled Asset Relief Program, or TARP, was created to provide up to $700 billion of taxpayer money for use by the Treasury Secretary.

Administration of the TARP includes the purchase of mortgage backed securities as well as a program to purchase whole loan packages from regional banks to free up credit on the regional level. According to the Treasury Secretary, these programs will ensure homeownership preservation as well as increase the availability of credit to small businesses and individuals. The TARP also includes an equity purchase program and a program to establish insurance for troubled assets.

While lawmakers in Washington and members of the mainstream media want you to focus on the AIG bailout, the rescue of Bear Stearns, the takeover of Fannie Mae and Freddie Mac, and the latest bailout of Citigroup, I think you should take a look at the list of banks that have received funds or are in the process of doing so.

I find it quite ironic that some banks, which purchased other banks recently, are now on the list for a government handout. Would they have needed the handout if they hadn’t spent all their money purchasing banks that needed to fold in the first place?

The list below, which I found at the CNNMoney website, includes a list of the companies that plan to take part in the government’s TARP program. It’s a massive list of approximately 130 banks, and you’ll be shocked by some of the names on the list.

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The Warning Signs Were There

Tell the truth now. Did you know there was trouble brewing in the housing market? Did you see the coming economic storm? We’re you shocked when not-so-smart people in our government started espousing the need to ‘bailout’ certain financial companies? Seriously?

The signs have been there for a couple of years. If you’re one to keep your head in the sand (like many politicians on the House Financial Services Committee) you might not have seen those signs, but for those of us who happen to have more than a pea for a brain, we saw the signs. We knew it was just a matter of time before lending institutions would begin to crumble, and now it has happened.

Financial institutions are crumbling and it’s all because Fannie Mae and Freddie Mac have imploded. Maybe things wouldn’t have gotten so bad if Fannie and Freddie were not required to purchase all of those bad loans in the first place. Then again, things could be much worse. The American people could lay blame on Congress, where it belongs, because they failed to take action that could have prevented this whole mess.
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Another Down Day Has Me Wondering

Do you remember last week, when the U.S. House of Representatives failed to pass the $700 billion bailout and the Dow Jones dropped 777 points?

A whole lot of people, including President Bush, Treasury Secretary Paulson, Speaker of the House Nancy Pelosi, and Senate Majority Leader Harry Reid told us we needed a bailout bill and we needed it as soon as possible. They said if the bailout bill did not pass, we would be facing a certain financial downfall in our country.

The Senate added the contents from another bill, to make it more appealing for some members, and they passed the bill by an overwhelming margin on Wednesday. Fast-forward to Friday, when the U.S. House passed the revised measure and we were reassured by President Bush, Treasury Secretary Paulson, Speaker of the House Nancy Pelosi, and Senate Majority Leader Harry Reid and others who told us they had done the right thing. Some didn’t like it, but it was the right thing to do for our country.

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Were They Wrong?

Last week, the sky was falling. Congress had to hurry and send any bailout bill to the President’s desk for his signature. Remember. It was mission critical. Without the bailout bill, the economy (ours and the entire world economy) could come crashing down at any moment.

On Friday, enough members of the House of Representatives capitulated and the bailout bill passed. So everything is okay now, right? We’re good to go, yes?

Here are some of the pertinent ‘breaking news’ items I have received from BreakingNewsOn in the past four hours:

AP: President’s top advisers say financial markets remain “extremely strained.”
about 4 hours ago

AP: President’s top economic advisers pledge to work globally on financial crisis.
about 4 hours ago

about 3 hours ago

about 3 hours ago

AP: Official: Treasury assistant secretary to be tapped as interim head of $700 billion rescue.
about 3 hours ago

about 2 hours ago

The Dow Jones has fallen 340 points, putting the index below the 10,000 mark for the first time since 2004; Nasdaq composite plunges 4%.
about 2 hours ago

The Dow Jones Industrials has fallen 360 points as the Federal Reserve announces $150 billion in 85-day credit through auction facilities.
about 2 hours ago

about 2 hours ago

Europe’s Stoxx 600 falls more than 7%, its biggest drop since 1987, Bloomberg TV reports.
about 2 hours ago

about 2 hours ago

The Dow Jones Industrials has fallen more than 570 points in another dramatic day on Wall Street; index now below 9,800 total.
about 2 hours ago

AP: EU presidency says all 27 members pledge “necessary measures” to ensure financial stability.
about 2 hours ago

about 2 hours ago

As the financial crisis worsens across the world, the Toronto stock market (TSX) has tumbled more than 1,060 points (about 10%).
about 1 hour ago

Argentina’s Merval stocks plummet about 10.83% to 1.348,77 points; Dow Jones now down 460+ points.
about 1 hour ago

AP: The Icelandic government says it will guarantee all domestic savings deposits.
about 1 hour ago

AP: France’s CAC-40 share index down more than 8 percentage points near end of trading.
about 1 hour ago

AP: President Bush says “it’s going to take awhile” for the financial rescue plan to work.
29 minutes ago

What? On Friday we were told that a vote for the bailout bill would prevent this very thing from happening? What does he mean “it’s going to take a while?” What does that mean? Does that mean the market is still going to crash? Does that mean that even with the bailout bill nothing is going to change? Wow. Then, after following all of the news today, I read the following article from James Doran in The Observer.

Fears are mounting that many Wall Street banks and financial firms will refuse to participate in the US government’s $700bn bail-out package, leaving global markets and world economies in a perilous state for months to come.

‘There is a growing feeling that banks … might instead decide to tough it out,’ said Thomas Caldwell, chairman and CEO of Caldwell Financial, a $1bn-plus fund manager.

Now the banks are going to tough it out? You mean they didn’t ‘need’ the bailout? Wow. I thought our Senators and Representatives spent the past week telling us how bad the banks needed this to help “main street” America.

Were they wrong?

When Conflict Of Interest Is Ignored

Imagine for a moment that a Republican member of the U.S. House of Representatives sitting on the House Banking Committee which had jurisdiction over Fannie Mae had a wife who served in a high level positon at Fannie Mae.

Would the shit hit the fan or what? Democrats would be calling for him to step down from the banking committee and calling for a a probe into his ethical conduct while serving on that committee.

But what if the same thing happened, but it was Rep. Barney Frank (D-MA) involved with the executive at Fannie Mae?

Unqualified home buyers were not the only ones who benefitted from Massachusetts Rep. Barney Frank’s efforts to deregulate Fannie Mae throughout the 1990s.

So did Frank’s partner, a Fannie Mae executive at the forefront of the agency’s push to relax lending restrictions.

Now that Fannie Mae is at the epicenter of a financial meltdown that threatens the U.S. economy, some are raising new questions about Frank’s relationship with Herb Moses, who was Fannie’s assistant director for product initiatives. Moses worked at the government-sponsored enterprise from 1991 to 1998, while Frank was on the House Banking Committee, which had jurisdiction over Fannie.

Both Frank and Moses assured the Wall Street Journal in 1992 that they took pains to avoid any conflicts of interest. Critics, however, remain skeptical.

“It’s absolutely a conflict,” said Dan Gainor, vice president of the Business & Media Institute. “He was voting on Fannie Mae at a time when he was involved with a Fannie Mae executive. How is that not germane?

That’s right. Nothing was done. Nothing at all. Read the entire article to read how Frank blocked all attempts at imposing new regulation on Fannie while his lover was working there. Read the entire article to read how far Frank’s fingers are into this entire mess facing us today.

The Senate BailOut Bill

Today the U.S. Senate will debate their version of the $700 billion bailout. They will vote on the measure this evening (around 9pm EST).

What they are not telling you, is the Senate version of the bill is nothing more than the House version (which failed earlier this week) with a lot of added pork (and beans).

The original bill was 3 pages. The House version was 106 pages. The Senate version is now 451 pages. You can download it here.

The Senate version raises the amount of FDIC coverage from $100,000 to $250,000, but that can be done without Congressional action, so it’s not a great selling point if you ask me. Basically, the Senate version does nothing but add special earmarks and incentives for Senators who happen to oppose the measure. Isn’t it nice to know that our Senators can be bought so easily? Isn’t it nice to know that they are willing to sell out the interests of the American people for a little pork on their plate. How disgusting.

If this bill was worth the paper it was printed on, Senators would support it on it’s own merits. There would be no need to add incentives to ‘gain their support’.

Call your Senator and demand that they reject this bill and sit down to work an a bill that will actually help the American people.

Update: It was brought to my attention that the “earmarks” in this bill, when in fact, the Senate was simply combining a bill that had been voted on earlier in the week with major support. Of course, this brings up more issues for me. Senators should not need to “sweeten” the deal for this bill, if it’s truly a good bill for America.