Use access key #2 to skip to page content.

Where'd the bailout money go? Shhhh, it's a secret

Recs

25

December 22, 2008 – Comments (6) | RELATED TICKERS: JPM

 

Well, it didn't take me long to become outraged about the government bailout measures this week.  The Associated Press has been doing a great job at hammering on the government for its complete mismanagement of the TARP money lately (they better watch out for those black helicopters).  I came across two infuriating articles from them on the subject this morning.  Here's a snippet from the first, Where'd the bailout money go? Shhhh, it's a secret:

"It's something any bank would demand to know before handing out a loan: Where's the money going? But after receiving billions in aid from U.S. taxpayers, the nation's largest banks say they can't track exactly how they're spending the money or they simply refuse to discuss it.

'We've lent some of it. We've not lent some of it. We've not given any accounting of, 'Here's how we're doing it,'' said Thomas Kelly, a spokesman for JPMorgan Chase, which received $25 billion in emergency bailout money. 'We have not disclosed that to the public. We're declining to.'"

How is stuff like this even going on?!?!  And how on Earth are GM and Chrysler required to jump through a zillion hoops to get a tiny fraction of the money that has been handed out to the banks with practically no strings attached at all @#$%^&*%$!

The second article, AP study finds $1.6B went to bailed-out bank execs, talks about the zillions of dollars that banks that were in such bad shape that they had to come crawling to the government for taxpayer money have paid out to executives lately.  I guess that my company is just old-fashioned, but if my division was run into the ground under my watch I probably wouldn't receive much in the way of a bonus.  I mistakenly believed that it how the world worked.  Silly me.

The average executive at a list of 116 banks that have thus far received $188 billion in taxpayer help received $2.6 million in in salary, bonuses and benefits last year.   Yuck.

Deej 

6 Comments – Post Your Own

#1) On December 22, 2008 at 9:34 AM, cbwang888 (25.46) wrote:

Hank Paulson and his banker gangs want the same fat bonus that they had stolen for the past few years. He is the cunny fox who we let him guard the chicken coop.

The worse, our congress are full of dummies ...

Report this comment
#2) On December 22, 2008 at 10:32 AM, ByrneShill (78.02) wrote:

Dude, you can read the banks 10Ks and 10Qs to find out where the money has gone.

Technically, there's no difference between 2 bills of the same face. If a bank got 1$ in tarp money and 99$ in revenue/deposit/other source, and loaned 80$, then it means they loaned 80¢ out of that dollar. Simple as that.

Report this comment
#3) On December 22, 2008 at 11:28 AM, GNUBEE (24.05) wrote:

Shill,

That does not tell me what happened to the money.

Also, Technically, a loan to Zimbabwe is the same as a loan to Coca-Cola. I'd shure like to know who got my money, and it better not be Zimbabwe.

Report this comment
#4) On December 22, 2008 at 9:40 PM, Option1307 (30.00) wrote:

ByrneShill

Dude, you can read the banks 10Ks and 10Qs to find out where the money has gone.

I think you misssed the point here... My outrage, and I think Deej's as well, is that the banks are receiving massive amounts of money and yet they do not have to disclose what it is being used for. Obviously you could look at there 10K's etc, but this doesn't tell you anything substantial. The point is, we as the public that essentially financed the bailout, would like to know if our "neceesary" money is going directly into the CEO's pockets etc.

Demanding a little clarity on where and how the money is being spent is not too much to ask, in my opinion. After all, we are writting the check...

Report this comment
#5) On December 23, 2008 at 2:19 AM, valueandprice (79.41) wrote:

Hey TMF: Surprise, surprise. If I remember correctly, back in September, you guys were all for the bailout:

 http://www.fool.com/investing/general/2008/09/25/tell-congress-we-demand-equity.aspx

 Wasn't it Munger who said unintended consequences leads to more unintended consequences, and so on, something of that sort? I mean, this is the same Wall Street that screwed everyone else over the first time, and did we really think they wouldn't do it again? Was this really a surprise? I mean, it's called a B-A-I-L-O-U-T for a reason.  Like, FREE MONEY. Hey, do I hear public opposition to the bailout? Well, the candidates supported it! Buffett supported it!

None of this is an investment whatsoever. None of it. If it were, the free market would work. As it stands, the Federal government is standing back there as the buyer of last resort. Know why? Because all the junk assets are just that: junk and overvalued, and taxpayers are paying for it. IT'S NOT AN INVESTMENT IF ITS VALUE CANNOT BE RECOUPED. One of the classic features of a bubble, as noted by someone smarter than me, is that bubble prices for assets never reappear for at least a generation after inflation. Roaring 20s. 70s Commodities bubble. 80s real estate bubble. 90s tech bubble. All 20-30 year corrections in the making. We are currently paying good money for junk assets that are likley going to be worth much less in the future. The only way it'll appear the investment will look like it worked is through inflation and sugarcoating the nominal numbers as nominal prices go through the roof. Of course, the government will likely reduce the "official" CPI inflation numbers (www.shadowstats.com), making everything look like it made money.

 Also, all this talk of banks paying interest on the TARP loans: News flash - a loan is only worth something if it can be repaid back (Hey! This sounds familiar!). Somehow, I don't think AIG is going to be able to repay the $150B it borrowed by selling its assets. It doesn't HAVE $150B in assets. It just sold one of its units for a whopping $800M. Better hope it either has a LOT of thos $800M units, or that it can fetch higher prices for the fewer remaining units it has. Citigroup had to come back for seconds. Do we honestly expect them to make good on the 8-10% interest rate? That's the same interest rate as the long term stock market! At the rate the banks are returning to feed at the Government's hands? It's infuriating and disgusting. Why don't we just nationalize the banks already? It'd might as well lead to that rather than have a bunch of crippled zombie banks walking around.

 BTW, I need a bailout too.

Report this comment
#6) On December 23, 2008 at 2:19 AM, valueandprice (79.41) wrote:

Hey TMF: Surprise, surprise. If I remember correctly, back in September, you guys were all for the bailout:

 http://www.fool.com/investing/general/2008/09/25/tell-congress-we-demand-equity.aspx

 Wasn't it Munger who said unintended consequences leads to more unintended consequences, and so on, something of that sort? I mean, this is the same Wall Street that screwed everyone else over the first time, and did we really think they wouldn't do it again? Was this really a surprise? I mean, it's called a B-A-I-L-O-U-T for a reason.  Like, FREE MONEY. Hey, do I hear public opposition to the bailout? Well, the candidates supported it! Buffett supported it!

None of this is an investment whatsoever. None of it. If it were, the free market would work. As it stands, the Federal government is standing back there as the buyer of last resort. Know why? Because all the junk assets are just that: junk and overvalued, and taxpayers are paying for it. IT'S NOT AN INVESTMENT IF ITS VALUE CANNOT BE RECOUPED. One of the classic features of a bubble, as noted by someone smarter than me, is that bubble prices for assets never reappear for at least a generation after inflation. Roaring 20s. 70s Commodities bubble. 80s real estate bubble. 90s tech bubble. All 20-30 year corrections in the making. We are currently paying good money for junk assets that are likley going to be worth much less in the future. The only way it'll appear the investment will look like it worked is through inflation and sugarcoating the nominal numbers as nominal prices go through the roof. Of course, the government will likely reduce the "official" CPI inflation numbers (www.shadowstats.com), making everything look like it made money.

 Also, all this talk of banks paying interest on the TARP loans: News flash - a loan is only worth something if it can be repaid back (Hey! This sounds familiar!). Somehow, I don't think AIG is going to be able to repay the $150B it borrowed by selling its assets. It doesn't HAVE $150B in assets. It just sold one of its units for a whopping $800M. Better hope it either has a LOT of thos $800M units, or that it can fetch higher prices for the fewer remaining units it has. Citigroup had to come back for seconds. Do we honestly expect them to make good on the 8-10% interest rate? That's the same interest rate as the long term stock market! At the rate the banks are returning to feed at the Government's hands? It's infuriating and disgusting. Why don't we just nationalize the banks already? It'd might as well lead to that rather than have a bunch of crippled zombie banks walking around.

 BTW, I need a bailout too.

Report this comment

Featured Broker Partners


Advertisement