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Goldman Bails Out ShoreBank As Wall Street Tries To Win Back Favor With Obama
What does a failed community bank that is not TBTF or have its former CEO running the Treasury have to do to not end up on the TGI Bank Failure Friday dinner list of busted banks? Simple - be located a few blocks from where the president grew up and to which he has a sentimental attachment. Additionally, casually dropping a few mentions of criminal CDO investigation this, grand frontrunning jury that, is sure to bring instant wire transfers from a few TBTF parties (whose former CEO did run the Treasury), even if these parties are the same that last week were on the receiving end of yet another Wall Street themed fire and brimstone sermon. Today ShoreBank, which should have failed in a normal capitalist society, received a reprieve after the Obama administration did not force banks to bail it out. In fact categorically so. Because otherwise what kind of a fair and efficient system would we have, if preexisting ties and crony relationships were all that matter in determining life or death. After all that's how things worked in Russia. And Russia was an evil empire.
From Reuters:
A troubled Chicago community bank with a philanthropic reputation has won uncommon Wall Street backing to save it from a government takeover, while similarly sized rivals flounder and fail.
Privately owned ShoreBank, a community development lender on Chicago's South Side near the home base of President Barack Obama and some of his top aides, is getting assistance from a consortium of Wall Street banks including Goldman Sachs Group Inc, Citigroup, JPMorgan and Bank of America, sources have said.
Spokesmen for Citigroup and General Electric Co each confirmed $20 million investments on Tuesday, and JP Morgan previously said it was ready to inject $15 million. Another source said Goldman injected $20 million.
ShoreBank, which has $2.3 billion in assets, was reported to have exceeded the $125 million in rescue capital it needed to avoid a takeover by the Federal Deposit Insurance Corp.
And here is the reason why ShoreBank was spared:
Small banks across the nation are failing at a rapid pace due to troubled real estate loan portfolios, but ShoreBank's dedication to community development and environmental causes apparently secured its special status.
"I think this is a very unique circumstance. But ShoreBank is kind of a unique institution in that regard," said Geoff Smith, senior vice president at the Woodstock Institute, which studies lending in poor communities.
"When you think of other banks, they don't usually get bailed out in this manner," he said.
Smith and others say ShoreBank's philanthropic reputation -- it traditionally provided loans for small residential renovation projects in impoverished areas -- and its Washington ties may have saved it from a fate suffered by other banks.
We are not going to even go there. But since it is Wall Street's money for once saving an Obama crony organization, we couldn't really care. We will be disappointed however, if the $20 million in FDIC money that is still on Goldman's balance sheet via the TLGP that was used to prevent the FDIC from saving ShoreBank, is what it takes for the SEC to mysteriously realize it needs to drop its case against Goldman. Disappointed but not surprised.
And here is the official spin claiming lack of impropriety from the administration:
Bill Brandt, chairman of the Illinois Finance Authority, said there had been no political arm-twisting to win investments for ShoreBank. He said Wall Street banks were happy for a chance to align themselves with a community bank that has a national reputation for philanthropic investments.
"People were fighting to get into this deal, as odd as that sounds," Brandt said. "Many of these organizations are aware they are under public scrutiny and they take a philanthropic vision to improve communities very seriously. The White House had nothing to do with this."
Goldman has been trying to burnish its image after confronting political pressures and populist anger over its quick turnaround and perceived lack of concern over the economic downturn. Its image was further tarnished last month when the U.S. Securities and Exchange Commission brought fraud charges against the firm.
Which makes us wonder: how did so many other failed Chicago banks not realize that all they needed to do was call up the president and pitch their philanthropy, in order to avoid failure? Well, now that the president is fully empowered to blackmail the banks, especially those with pending civil and criminal litigation, we expect to see no more bank failures from the south side of Chicago. Ever.
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Aussies got an 85 handle, next stop 77 thanks China.
Yep, and the euro/yen is getting a little nitty gritty also...
Excellent. I'm a buyer of FXA at 0.77. Might pick up some BHP if it really shits the bed down to that level too....just for kicks.....
Brandt is a bankruptcy guy and major Dem financial supporter, but he was a FOB (friend of Bill and Hillary) and not so much an Obama guy.
This is clearly a crooked deal, regardless of what the hand-picked spokespeople of the political machine say.
That would explain parasite Bill Clinton's new religion last week in which he publicly defended GS. Quid pro quo.
SQUID PRO QUO!!
Is there anything that separates us from a banana republic at this point? (Well, besides the fact that we no longer operate as a republic...)
It's just the after-effects of previously held beliefs.
Most people avoid thinking as much as possible. They believe whatever they're told.
We no longer operate as bananas, either. Those jobs got off-shored.
Too bad Hank didn't get that done for Lehman Brothers.
Tomorrow is looking ominous with the futures already. 1100ish puts me at -10% from the high. I said before, if that happens, I sell and go short. Looks like it'll probably happen fairly quickly. Charts are beginning to appear to show S&P heading down as low as 950 if 1100 cash is broken.
I must admit, I was wrong when I thought we would go to 1300 area before a 10% pull back. Had I been paying better attention today, I would have dumped all long positions at the retest of 1150. Oh well, I'm sticking by my game plan. I just hope we don't open really, really low tomorrow - like 1075 area. It's feeling like that kind of night.
Hey hey, cheer up hazza, it's not like its a global depression or anything.
I think it's funny how you all grow a big rubbery one for Harry now that he's pretending to be down and out.
Agreed, such amateurish trolling would have been laughed off a place like FuckedCompany. They don't make 'em like they used to...
Harry... why are you trading if you lack any kind of clearly defined edge?
Hang Tough Harry, at the end of the day we are all still brothers no matter what a market on auto pilot does...
Oh no you don't....you're ruining my Mojo...you can't get all reasonable now...I'm putting a reverse on your reverse...:-)
Way to man up. Now, let's go make some money tomorrow.
LMAO!! Now that's funny... however, no offense Johnny Bravo, it make me a little uneasy to have you playing on our team...
I have to admit Harry, you deserve serious credit for acknowledging your previous statements. And, it's also good to see that you do actually see both sides...an important ability for anyone in this day and age.
F You Wanger. It's people like you why this country is in such trouble.
Always cheerleading and not looking at the facts.
F U C K You Wanger
Well, far be it for me to be Harry's cheerleader, but didn't you read? Don't you think you should blame the people still cheerleading how great things are not the guy who came out and said as of today that maybe there is another side that needs some focus?
F you too. If you have read his shit the past few weeks, i want to throw up. for you too back him makes me wonder about you. First few up days he'll be back cheerleading. the guy is a douchebag. and i am starting to think so are you.
Wow, you're in a seriously bad mood. My point was simple. Harry acknowledged he needed to re-evaluate his position. Maybe he's totally full of shit, but at least he came out and said at the moment he was wrong -- that's more than most would do. Frankly I am shocked Harry posts at all here, but whatever.
As for you, I wouldn't make too many wholesale judgements about people based on blog posts...good, bad or indifferent. I mean if I did based on just your post, I might think you're a total asshole, but in fact, you might be a really nice person just having a really shitty day.
your right. sorry for being an asshole to you. but Harry is still a douchebag
You are most likely right on that...
Sounds like a guy who took it with no Vaseline. No more RAH RAH NAR-style chants anymore, please. Even a broken clock is right 2 times a day.
Glad to see you back Harry. I hope you do well. Staying in the fight is what life is about.
Who are you and what have you done with Harry?
That sounds expensive.
Hey! Acceptance, first stage to recovery!
You'll get there, Zero Hedge is the best place to learn =)
Gold & Silver Bitchez!
Hey these guys are philanthropic. They like to share OUR wealth -not just amongst themselves, but to all those less fortunate. I mean look at how GE is trying to save the world (forget about their military division that has supplied our enemies with advanced weaponery and such) by spreading green happy thoughts. At least they're not in bed with the Administration (he says gagging on his tongue).
Funny that; the ShoreBank bailors are TARP bailees.
Gosh golly gee.
Capitalism chicago style
Every american needs to watch dylan ratigan and bernie sanders today discussing the sham of financial reform and how we no doubt only live in an oligarchy.
http://www.huffingtonpost.com/2010/05/18/gop-blocks-two-key-anti-w_n_580747.htmlWin back favour with Obama? When did Wall Street have favour with Obama - outside of campaign fund raising, I mean?
Psst. I'll let you in on a little secret: Obama is not really a leftist and he never would have gotten elected if he didn't have the favor of the elite.
Well - he is a leftist, but even leftists love money .. but they try to be in the closet about it. Ask the shorty running North Korea.
Wow this is the first time I have watched our leaders on C-span. Now I know why we are where we are. Pass the Fn bill jackasses and stop Fn debating. The system is falling apart by the second.
Shorebank is only a few blocks from my home in the Kenwood neighborhood of Chicago. It brings tears to my eyes to think that our own neighborhood bank received gratuitous funds from the "Big Boys" on Wall Street. Long live Chicago politics! "The Boss" Richard J. Daley would be right proud.
Thankfully I predicted a top in the market to be Thursday of last week during Wed trading session. Sell baby Sell but Turbo Tim might come to the rescue. Getting SQUEEZED in eur/jpy, nice BITCHES.
And this surprises who?
"And Russia was an evil empire."
classic tyler
I do not believe that the first Noble Prize winning African American President of the United States had any, I repeat any, involvement with ShoreBank gaining capital infusions. ShoreBanks solid reputation in Chicago for meeting shareholder goals is the only reason total strangers would give them money.
Note:
Advisors to the ShoreBank Board:
Ms. Suzanne Nora Johnson
Retired Vice Chairman, Goldman Sachs Group, Inc.
Mr. Daniel Lupiani
Executive Consultant, Chicago Partner, LLC
Mr. David Vitale
Former Vice Chairman and President of First Chicago
and First Chicago/NBD
And:
The bank actually seems more closely tied in with the Clintons than with the Obamas; a key figure was Bob Nash, "Hillary Clinton's deputy campaign manager in her campaign for the Democratic nomination for President. He was formerly vice chairman of ShoreBank Corporation, chairman of ShoreBank Enterprise Detroit and the Detroit Bank Advisory Committee, and chairman of the board for ShoreBank Neighborhood Institute and ShoreBank Enterprise Cleveland. He served as undersecretary of Agriculture, managing USDA's small-community and rural development programs, and then as director of presidential personnel to former President Bill Clinton. Prior to working for the Clinton Administration, he worked for governors Bumpers, Pryor, and Clinton in Arkansas and joined Winthrop Rockefeller Foundation as its vice president."
I met Bob Nash once. On my side was a lifetime banker. After the meeting, the banker said to me: "I cannot for the life of me see how they make a profit with their cost basis versus their lower margins. I am baffled." A little look into Bob Nash and you start to see some old 1987 stories about things that happened in AK, the CIA and foreign countries. Now maybe we see why it got bailed out. The fact that O lived in the neighborhood is immaterial.
The Financial Times has a scoop: "Lloyd Blankfein, Goldman Sachs chief executive, is playing a personal role in helping to arrange a $125m rescue for a Chicago community bank which provides loans to lower-income communities, people familiar with the matter say. The lender, ShoreBank, was told by the Federal Deposit Insurance Corporation in March that it had 60 days to raise capital or risk being seized. Mr Blankfein has been making phone calls to rally support for a deal that would see some of the country's biggest financial groups help the Chicago community bank."
A guy I work with was on the board of a different bank that got seized recently. Had almost all performing loans when the FDIC came knocking. All those good loans were just handed off to another bank. POOF! Wealth transfer. Nice. Love the centralized gov't.
The fact that O lived in the neighborhood is immaterial.
So barry gets to blame the Clintons now? After he blames Bush for everything else he now has the Clintons.
WTF... what has this man every taken responsibility for?
Is it his fault that he is president?
Or is this Michelles fault?
"He said Wall Street banks were happy for a chance to align themselves with a community bank that has a national reputation for philanthropic investments."
Jesus H. Fuck. When is the Berenstain Bears book about it coming out? At least lie to me in a way that doesn't grossly insult my intelligence and cause my dinner to end up spattered all over my monitor.
Well Chicago is part of the nation, right?
So they have a national reputation!
Just like they are part of the world, so they have the world's best pizza or hot dogs or whatever.
Here, I found the illustration for this story:
http://2.bp.blogspot.com/_bjqmGmHDb1w/SDsGwLjYaHI/AAAAAAAAAgM/fV6yW8xAIY...
Brown noses; they're just not for Presidents anymore.
Jamie and Lloyd, get a handkerchief.
There is much much more, connections to Valerie Jarrett, obamas left hand woman, Jan schakowsky and her equally radical felon husband,
guess who are shareholders in the Chicago climate exchange?
Shorebank and Goldman sachs
who else involved ? Franklin raines, who reaped millions from Fannie Mae
It's a socialist elite incestual orgy mess.