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10 Ways to Say "NO, the Banks Have Not Paid Back Their Debt to the Taxpayer!"
I was not going to bother to comment further, but after hearing pundit
after pundit attack Obama for the bank levy and Glass Steagal 'lite',
after banks allegedly paid their dues... I just couldn't take it
anymore.
Yes! Obama has made a lot of policy errors in dealing with the
banks. Yes! I believe he has not solved the problems, but has chased
the symptoms. The separation of prop trading from deposit banking IS
the RIGHT thing to do. In addition, the banks have not come anywhere
NEAR repaying their debt to the government. Not even close.
Yes, some of the banks repaid TARP, with interest and warrants. Okay.
The investment big banks (that were still in existence) were offered
expedited financial holding company (bank) charters. That is why they
didn't fail, at least in part.
So, running down the list, the banks paid back TARP. That's a +, but....
- What was the value for bank charter, to get cheap access to the Fed's funds? did they pay back this value yet? No!
- How about the payment of interest on the banks' excess reserves at the Fed. Have the banks repaid that yet? No!
- The
Fed and the Treasury have purchased hundreds of billions of dollars of
Agency debt, Agency mortgage-backed securities (MBS) and related
securities through Treasury purchase programs. Have the banks paid back
the capital behind those purchases yet? No! - How about the Term Auction Facility? Has the capital behind the benefits of that program been paid back? No!
- Then there is the Primary Dealer Credit Facility (PDCF), has this been paid back? No!
- Do you remember the Term Asset-Backed Securities Loan Facility (TALF)? Have the funds behind that been paid back? No!
- What about the PPIP? No!
-
Hey, there's the Foreign Exchange Swap programs (the currency swap
lines, that saved not only our banks but out banks facing
counterparties who were short on dollars), has that been paid back? No! - There's the Commercial Paper Funding Facility (CPFF), have the funds behind that been paid back? No!
- Most
importantly, the opportunity cost of ZIRP, which hurts those who do not
speculate (or have not speculated) with near free money! How do you pay
that back to grandma and her .017% CDs?
How do you repay the synthetic bid that the Fed has created under MBS
that has rescued the banks from balance sheet purgatory (for now)? How
about the accounting fantasy football game that was authorized by FASB
last year that has lost fundamental investors who actually count vast
sums of money? Then there is those FDIC bond guarantees... Oops, I went way past 1 reasons, didn't I?
I can rant on, but if I haven't driven the point home by now, I
probably never will. So as you read about Goldman's earnings beat on
weaker revenue, consider the advantages that they have, that they
didn't pay back, that smaller businesses such mine simply don't have
access to.
See the following for a backgrounder on my opinion before we move
on to the risks emanating from other parts of the world stimulated by
our number one export from the "Too Big To Fail, but Too Big to Let
Survive Intact" club:
-
- The Fed Believes Secrecy is in Our Best Interests. Here are Some of the Secrets
- Why Doesn't the Media Take a Truly Independent, Unbiased Look at the Big Banks in the US?
- As the markets climb on top of one big, incestuous pool of concentrated risk...
- Any objective review shows that the big banks are simply too big for the safety of this country
- The ARE trying to kick the bad mortgages down the road, here's proof!
- Why hasn't anybody questioned those rosy stress test results now that the facts have played out?
- If a Bubble Bubble Bursts Off Balance Sheet, Will Anyone Be There to Hear It?
- If a Bubble Bubble Bursts Off Balance Sheet, Will Anyone Be There to Hear It?: Pt 2 - JP Morgan
- If a Bubble Bubble Bursts Off Balance Sheet, Will Anyone Be There to Hear It?: Pt 3 - BAC (the bank
- If a Bubble Bubble Bursts Off Balance Sheet, Will Anyone Be There to Hear It? Pt 4 - Wells Fargo
- If a Bubble Bubble Bursts Off Balance Sheet, Will Anyone Be There to Hear It? Pt 5 - PNC Bank
- The Next Step in the Bank Implosion Cycle???
- A Must Read: An Independent Look into JP Morgan. This contains the "public preview" document (
JPM Public Excerpt of Forensic Analysis Subscription 2009-09-18 00:56:22 488.64 Kb), which is free to download.
Yes, zactly.
They move cloaked in darkness. Let there be light!
Reg get on cnbc!
Way too many liberals on CNBC already. Santelli can not take them all on........
I think this is my favourite post by you. You definitely pointed out the items that the short-termers like to forget. Thanks.
It was the first time in a long time I heard a bit of the president that I elected.
Here's some Jon Stewart pounding cramer for the masses
http://www.thedailyshow.com/watch/wed-january-20-2010/indecision-2010---...
So you're saying the government implemented all of these plans with no exit strategy. Sufficient cause for wholesale change in government personnel this November.
The government tells banks to a) increase equity capital, b) make more loans and c) pay $90 billion in taxes. All of which are contradictory with each other.
The government induces, encourages and/or fully supports BoA buying Merrill and WFC buying Wachovia and now government wants to bring back Glass Steagall and force "big" banks to get smaller.
And you all want to embrace more government as an intelligent solution to the ills of the world??
Also waiting for how irresponsible borrowers are going to contribute to government coffers for their 50% participation in this borrower / lender mess.
Signed,
Not a lender, not a borrower.
Let us not forget the 285 billion AIG bailout that was a backdoor bailout for the banks, including the infamous 100% payout to GS totaling 13 billion,has any of that been paid back? What about the 30 billion of tax payer loot that went into the BS deal .
I'm listening to the specious argument that the banks are no longer wards of the government after paying back TARP, and I feel nauseated. Accept $2 trillion of aid, and payback $700 billion. What a deal...
Mayhap I should be interviewed on CNBC.
I share your nausea. Thanks for the post. The bastards.
Poll?
Who is the most despicable liar in financial "journalism?" James Cramer, Maria Bartaromo, Larry Kudlow, or Dennis Kneale?
My vote goes to Dennis Kneale--a true hyping, lying, needle nosed geek.
I think very few politicians understand how pissed people really are about they way they've been shafted. I think they will come to understand it soon.
I think very few politicians understand how pissed people really are about they way they've been shafted. I think they will come to understand it soon.
As in: "Permit me to issue and control the money of a nation, and I care not who makes its laws."
Found in a recent issue of "Duh" magazine.
How do you regulate a Rothschild?
This is one of those essays everyone should print out and refer to when the discussion bailing out our fianancial institutions come to the forefront.
It seems that our little Congress-critters conveniently fail to recognize or admit that they have allowed these backdoor bailouts by giving Uncle Ben free reign in "saving the financial system". Most of this principal, let alone interest, will never be paid back.
Voters are not that stupid. Well, at least that's the message from Massachusetts. Those that are making their votes on BB's confirmation in the Senate better take note-- because their own political careers are at stake.
It appears that Obama has taken notice, though in typical "lite" fashion.
Phuck the banksters. They were complicit with the
central bankster theft as was Congress. See the Edward Albert piece. Tax the banksters into oblivion and
throw the Congressbums out. It's an evil juggernaut.
Mr. Market is punishing Obama as we type.......aghast that he is bringing up that horrible bank reform issue. Banksters will short this baby til he yells " UNCLE ".
WTG Reggie. Thanks .
And how about GS et all....
Acting in a very big way on obvious insider information ?
How about GS's continual conflictive business model...et all....being dismantled to a model that is not conflictive....ie trading against its clients ....
And how about separating the securites business from banking business ....just period ????
.............................................
The idea of adding costs to a system falls far short of restructuring it ....
This is a restructuring issue....
I won't be satisfied until those fuckers are nationalized, liquidated or firesaled. Revoke the Federal Reserve's charter.
Hate to fix your post...but...
I won't be satisfied until thos fuckers are nationalized, liquidated AND firesaled. (Not a fan of revoking the FED, but a fan of SERIOUS CONTROLS)
Excellent post Reggie. And excellent supplement Anon.