Congressional Pushback Against Taxpayer Funded Wall Street-Treasury Cronyism Picks Up

Tyler Durden's picture

Recently, the Congressional Oversight Panel announced that based on the currently accepted process the Treasury has adopted for banks to repurchase TARP warrants, the ultimate "recovery" to taxpayers would be 66 cents on the dollar. In other words, using the top secret, private method that the Treasury has signed off on, taxpayers are impaired once more even though the banks that repurchase their TARP warrants are presumably so healthy, that their EPS ebullience is supposed to drive the market higher and higher each day. How much longer will Joe Q Public have to suffer while Wall Street once again goes back to its habits of hitting the LIE for the 7 pm Southampton dinner date 4 out of 7 days a week. Apparently as long as the 401(k) is still up for the day compliments of "justificatory" drivel pouring from GE subsidiaries, the public is more than happy to be abused day in and day out. So what happens when reality finally sets in?

Luckily, Mary Jo Kilroy, a freshman Democrat from Ohio, is stepping in for the small guy, and has introduced a bill (HR 3232) to compel an open auction of these warrants with six cosponsors: Brad Sherman, John Boccieri, Betty Sutton, Jackie Speier, Marcia Fudge and Alan Grayson. Notably, Sherman was the leader of the little noted but important ‘skeptics caucus’ that attempted to stop the $700B bailout in September. Also Alan Grayson is the man whose cosponsorship of Ron Paul's HR1207 "Audit The Fed" bill has gotten over 260 Congressional supporters and at this point only additional Wall Street special interests are hindering its passage.

First Goldman is finally being attacked on all media fronts, and now Wall Street as a corrupt, standalone crony entity is starting to get the proper attention it so rightfully deserves. Yet so much more remains to be done.


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Anonymous's picture

In case you have not written about this one: Goldman Sachs became more entrenched in the Obama administration as Robert Hormats, vice chairman of GS international, was nominated to a top economic position at the State Department (NYTs Saturday).

Anonymous's picture

Open auction...OK...I understand why...BUT, what if the banks collude and deceide the bids will be real low? Anyway we can prevent something like this from happening???


lizzy36's picture

GS throws out their best PR trick by going to gasbags?  FAIL

braintrust's picture

Wish there was more we could do

rec. stock market blog 4 slow news day. this market needs to go lower

Miles Kendig's picture

We shpold require the fed to cover all of the warrants at 100%.  After all, I thought that was supposedly essential for the health of the economy.

Anonymous's picture

Come on people the government doesn't really need the money. It can just print more. What is more important is that Banks have liquidity that they won't use because that have so many assets off the books that they need to have money set aside to pay their bloated salaries.

Anonymous's picture

It is fascinating. The fact that banks are reporting such high profits is a pretty good sign of what would have happened had the losers been let to fail. Good lenders would have swooped in and taken over.

Captcha has gotten absurd, I am pretty sure -23 + -22 is a negative number but negative numbers are not allowed...

Anonymous's picture

Captcha on previous page

"(-19) times (-17) equals"

holy cow...

Gilgamesh's picture

Say what?  Might want to move that negative sign up to where you talk about "profits" and vice versa.  But somehow it got through, kinda like bank "earnings" getting through reporting regulations.

Lets_Eat_Amen's picture

What happens when the public realizes this?  Well in order for them to realize this, that assumes that the market has tanked, oil is at $20/barrel, and California is in ashes.  And from those ashes a self-proclaimed messiah of finance will appear and we'll entertain a new round of death-spiral bailouts as the public chants/ponders:  how much money do i need to give to feel safe again?

Anonymous's picture

Young, idealistic, fools. You don't get it. You wanna fix the big bad corrupted system? Burn it down, or shut the fuck up.

Anonymous's picture

anon #10291,

amen. BTW, HR1207 will probably never happen in the current climate. Prez will veto. Then 2/3 veto override required and THAT is when you will see the real full court press from wall street lobbyists. JMO

Gilgamesh's picture

Would love to turn Project Mayhem on the Fed.  Love love love.


Watching this scale of looting going on every day makes me ill.  All of the productive Americans' earnings being transferred to the bankers, and the rest of the scraps being redistributed to the squatters.


We are now past the point of being able to "vote them out."  The majority of Americans are henceforth net beneficiaries of Government taxation.  And so the real raping will begin. 


Until we refuse to obey/submit.

Anonymous's picture

Correct. A corrupted system, by its very nature, cannot be fixed. 1) Take a look at Spitzer's crusades against Wall Street and financial services back in the early part of this decade. Settlements arrived at, fines which were small relative to the illegally gotten gains, etc. What did it achieve? 2) SEC tipped about Madoff more than once. What happened? Nothing done (why?), plenty of people continued to get ripped off, show trial used as a smokescreen for the public while much grander larceny has been perpetrated on the taxpayers. Just two examples of folks trying to work within the big bad corrupted system to fix it; neither example was successful. I bet all kinds of tips are being provided every day to attempt to get the corrupted system fixed and most of those tips, if not all, have no action taken on them. If you're not part of the solution, you're part of the problem. Trying to fix the corrupted system most likely falls in the realm of being part of the problem.

Anonymous's picture

Barofsky said that while the TARP program that Congress passed amounts to $700 billion, the total federal government support since 2007 for the economy and the financial sector could reach a far higher figure of $23.7 trillion. The government has committed significantly more money through a variety of other federal agencies and programs.


agrotera's picture

I hope someone will bring up that much of the 23TRILLION is held in SPV's enron style and make the connection that may be why the fed hired an x-enron lobbyist so that they could help THEIR cause.

This bill is diddlysquat but i guess starting somewhere is better than nothing.  The COP noted as early as their first report that treasury got a value of 66cents on the dollar for all of the tarp purchases and now we are in July and finally a little sneeze over that HUGE fact.

Why not get a bill to call back TARP and many of the other acronyms on the basis that they were passed per false premise?  It could have taken one day to get authority to unwind the TOOBIGTOFAIL, but the SOB's (yes it is their mother's fault) take three weeks to lobby for THEIR interests with TARP!!!  I  prefer some REAL action by these lawmakers instead of these little polite apologetic gesture bills which of course are still courageous, and better than nothing--just NOT ENOUGH!!!!!

braintrust's picture

I coudn't agree more, but now that the stock market is in perpetual rally mode no one seems to care anymore. Too bad. Quite a shame, actually.
hat tip for . stock market blog 4 slow news day. this market needs to go lower> we the American people were scammed.

NorthenSoul's picture

23.7 Trillion ??

That is almost TWICE this country annual GDP. And management of the big banks is still in place, tera-bonuses are back as if nothing ever happened...and everything is fucking honky-dory??

And the president will have the incredible nerve of vetoing the "Audit the Fed" bill?

The time for pitchforkes is long past due. Bring the flamethrowers!!

agrotera's picture

Nerve, gaul, audacity (but NOT audacity of hope!!! more like audacity producing despair!!!) --the "audit the fed" bill is going to be a win either way because if it passes, that is the end of the privately held federal reserve, and if it doesn't pass, I think it will be the same outcome...people are starting to see the power of this monopoly and understandably, it has to stop.  But, i am sure that there will be ugliness either way, but, with hope, people won't be suckered into thinking that the ugliness that is ahead is because they are using their brains to have an affect on the way our government functions.

NorthenSoul's picture

Man! Barofsky is testifying in Congress tomorrow. I sure hope Grayson will be there to ask the juicy questions.

Anonymous's picture

Are the stimulus, bailout, and health care bills a CON to cover for the currency swaps the FED keeps extending?

Ghost Of Publius's picture

Grab your official ZH issued torches and pitchforks, men, and meet me for the March on Wall Street, Friday, September 18, 2009.  Complimentary tar and feathers will be available on the Manhattan side of the Holland Tunnel, and then it's just brisk march over to 85 Broad to join the festivities.