Archive for TARP

Another One Bites the Dust

So much for health care “reform” controlling costs:

Microsoft Corp., the world’s largest software company, said it will require employees to contribute to their health-care benefits starting in 2013, citing the rising cost of providing worker coverage.

About 95 percent of the company’s roughly 90,000 employees have benefits covered completely, Lou Gellos, a spokesman for Redmond, Washington-based Microsoft, said in an interview today. He said he didn’t know what portion employees will be asked to provide.

“The cost of health care has, over the years, increased dramatically,” Gellos said in an interview today. “The projections going forward have them going way up, and in order to be sustainable, some sort of evolution of our health benefit was necessary.”

Et tu, Gate?

Liberals are so convinced by their good intentions that they can glide from excuse to lie to prevarication without blinking. Health care reform hasn’t done anything that was promised of it—and promises far worse—but it was still a good idea, the thinking goes (and I use that word, ahem, liberally).

Here’s another one:

As the infamous Troubled Asset Relief Program (TARP) winds down this week, Republicans and Democrats in Washington, D.C. are patting themselves on the back for a job well done. Not only are they claiming to have saved the nation from a “Second Great Depression,” this so-called economic miracle was apparently purchased at a bargain basement price.

According to the Congressional Budget Office, TARP will cost taxpayers “only” $66 billion. The White House puts the figure even lower – at $50 billion.

Of course these rosy, election-year estimates are based on government liquidating its ownership stake in hundreds of “private” corporations – including a 92 percent stake in the American International Group (AIG) and a 61 percent stake in General Motors (GM).

For taxpayers to recoup their “investment” in AIG, the government will have to sell 1.66 billion shares of common stock at an average price of $29 per share. At GM, the government must sell 304 million shares of common stock at an average price of nearly $134 per share. Hitting these targets would be a daunting task in any economic climate – and may prove insurmountable in our ongoing malaise.

“How does one get $49 billion out of a company that’s currently worth $25 billion?” an investment research publication recently asked. “The follow on question is: why would investors buy AIG shares while the government’s AIG stock sale could last 18-24 months?”

Short answer? They wouldn’t – and likely won’t.

Meanwhile, none of the TARP money that’s been repaid to the U.S. government thus far is actually being returned to taxpayers. Nor is it being used to pay down America’s ballooning debt. Instead, it’s being spent on new bailouts, more borrowing and additional deficit spending.

Remember? Money lent was supposed to be paid with interest, thereby contributing not a cent to the national debt. Of course you don’t remember. Each promise from this administration expires upon its articulate (and clean!) utterance.

Besides, who can oppose the progressive wet-dream of more bailouts to favored industries and interest groups? We didn’t lie, they tell themselves, we improved the truth.

Being liberal means feeling guilty over the failings of others, but never your own.

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Transparent as S**t

I mean that literally and figuratively:

We supported TARP to deal with toxic bank assets and resolve failing banks as a resolution agency of the kind that worked with savings and loans in the 1980s. Some taxpayer money was needed beyond what the FDIC’s shrinking insurance fund had available. But TARP quickly became a Treasury tool to save failing institutions without imposing discipline (Citigroup) and even to force public capital onto banks that didn’t need it. This stigmatized all banks as taxpayer supplicants and is now evolving into an excuse for the Federal Reserve to micromanage compensation.

TARP was then redirected well beyond the financial system into $80 billion in “investments” for auto companies. These may never be repaid but served as a lever to abuse creditors and favor auto unions. TARP also bought preferred stock in struggling insurers Lincoln and Hartford, though insurance companies are not subject to bank runs and pose no “systemic risk.” They erode slowly as customers stop renewing policies.

TARP also became another fund for Congress to pay off the already heavily subsidized housing industry by financing home mortgage modifications. Not one cent of the $50 billion in TARP funds earmarked to modify home mortgages will be returned to the Treasury, says the Congressional Budget Office.

As of the end of September, Mr. Geithner was sitting on $317 billion of uncommitted TARP funds, thanks in part to bank repayments. But this sum isn’t the limit of his check-writing ability. Treasury considers TARP a “revolving fund.” If taxpayers are ever paid back by AIG, GM, Chrysler, Citigroup and the rest, Treasury believes it has the authority to spend that returned money on new adventures in housing or other parts of the economy.

Treasury and the Fed would prefer to keep TARP as insurance in case the recovery falters and the banking system hits the skids again. But the more transparent way to address this risk is by buttressing the FDIC fund that insures bank deposits and resolves failing banks. The political class has twisted TARP into a fund to finance its pet programs and constituents, and the faster it fades away, the better for taxpayers and the financial system.

Amen to that. But this administration is not about using existing programs (FDIC, Medicaid); it’s about funneling hundreds of millions of dollars to favored industries and companies. And punishing the unfavored.

On a related note, I wonder if it’s just coincidence that the one automobile company that didn’t take a penny of bailout money is about to turn a profit?

Indeed, Ford has managed to gain momentum during this historic recession. It has distinguished itself as the American automaker that proudly passed on taxpayer assistance. Through the first half of the year, Ford even eked out a profit of $834 million, although much of that was because of special onetime charges.

During the past two weeks, at least three Wall Street analysts have raised their estimates for Ford Motor Co.’s third-quarter financial results, with one, JP Morgan’s Himanshu Patel, estimating that Ford would report a profit of 16 cents per share for the July-September period when it reports results next Monday.

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Meet Mr. Dover

Ben Dover:

Taxpayers face losses on a significant portion of the $81 billion in government aid provided to the auto industry, an oversight panel said in a report to be released Wednesday.

The Congressional Oversight Panel did not provide an estimate of the projected loss in its latest monthly report on the $700 billion Troubled Asset Relief Program. But it said most of the $23 billion initially provided to General Motors Corp. and Chrysler LLC late last year is unlikely to be repaid.

“I think they drove a very hard bargain,” said Elizabeth Warren, the panel’s chairwoman and a law professor at Harvard University, referring to the Obama administration’s Treasury Department. “But it may not be enough.”

The prospect of recovering the government’s assistance to GM and Chrysler is heavily dependent on shares of the two companies rising to unprecedented levels, the report said. The government owns 10 percent of Chrysler and 61 percent of GM. The two companies are currently private but are expected to issue stock, in GM’s case by next year.

The shares “will have to appreciate sharply” for taxpayers to get their money back, the report said.

Who didn’t see that coming?

But doesn’t this mean that the Cash for Clunkers program was a big shell game? We give you $4,500 to buy a new car, and take it back out of your wallet at tax time.

Who didn’t see that coming?

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Your Economic Recovery Story of the Day

Thank God for President Obama. Without his “stimulus” package and “saved” jobs, think of the mess we’d be in:

As job losses rise, growing numbers of American homeowners with once solid credit are falling behind on their mortgages, amplifying a wave of foreclosures.

In the latest phase of the nation’s real estate disaster, the locus of trouble has shifted from subprime loans — those extended to home buyers with troubled credit — to the far more numerous prime loans issued to those with decent financial histories.

With many economists anticipating that the unemployment rate will rise into the double digits from its current 8.9 percent, foreclosures are expected to accelerate. That could exacerbate bank losses, adding pressure to the financial system and the broader economy.

“We’re about to have a big problem,” said Morris A. Davis, a real estate expert at the University of Wisconsin. “Foreclosures were bad last year? It’s going to get worse.”

“We’re right in the middle of this third wave, and it’s intensifying,” said Mark Zandi, chief economist at Moody’s Economy.com. “That loss of jobs and loss of overtime hours and being forced from a full-time to part-time job is resulting in defaults. They’re coast to coast.”

Fair-minded Americans wanted to give President Obama a chance. They didn’t like Rush Limbaugh’s (or my) rhetoric, rooting for his policies to fail. But it looks like that is what’s happened, whether we like it or not.

Strange that an administration so intent on creating jobs (or at least claiming to), can’t create even one where it might count:

Rick Wagoner is still on the Government Motors payroll, and Tim Geithner is still unable to staff the Treasury or get his programs running: These geniuses are bouncing around like the Thing One and Thing Two of the new American corporatism, a matched set.

Government officials, inside the Treasury and out, say the unresolved issues are piling up in part because of vacancies in the department’s top ranks. But some of the officials also cite the Treasury’s ad-hoc management, which is dominated by a small band of Geithner’s counselors who coordinate rescue initiatives but lack formal authority to make decisions. Heavy involvement by the White House in Treasury affairs has further muddied the picture of who is responsible for key issues, the officials add.

Just call him Barack Hussein Brezhnev.

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Recovery.bs

Rush made reference to this yesterday, but let me go to the primary source:

Although President Obama has vowed that citizens will be able to track “every dime” of the $787 billion stimulus bill, a government website dedicated to the spending won’t have details on contracts and grants until October and may not be complete until next spring — halfway through the program, administration officials said.

Recovery.gov now lists programs being funded by the stimulus money, but provides no details on who received the grants and contracts. Agencies won’t report that data until Oct. 10, according to Earl Devaney, chairman of the Recovery Accountability and Transparency Board, which manages the website.

Devaney told a House subcommittee Tuesday that it will be a challenge to have the site ready to present spending data in five months. He said after the hearing that the board doesn’t have enough data storage capacity, for example.

Devaney said that after the first data become available in October, the board will wait six to nine months for the White House Office of Management and Budget to issue new guidance on how far down the spending chain the money must be tracked. “I’m going to push them for as much data as possible,” he said.

Devaney’s spokeswoman, Nancy DiPaolo, said the website may not be completed until next spring.

As with all federal contracts, information about stimulus contracts is available on the Federal Procurement Data System’s website, but that data is not available on recovery.gov.

In addition, 29 federal departments and agencies provide stimulus spending information. The quality of those websites varies, from a list of news releases and planning reports from the Justice Department to a chart detailing major programs and a clickable map with state-level funding figures on the Energy Department’s site.

[E]xecutives at Onvia, which collects government contracting information for its clients, are skeptical that recovery.gov can meet the administration’s goals. Onvia, which is posting stimulus-related data on its recovery.org website, took much longer to develop its systems, said Eric Gillespie, Onvia’s chief information officer.

“It’s really, really hard,” Gillespie said, “and it’s taken us 10 years to figure out.”

I’m not saying President Obama knew this was exactly how things would play out, but I am saying he knew—anybody knew—that it would be something like this. It cost him nothing to make the pledge of absolute transparency—nothing—and that’s precisely how much credibility he put behind it.

And knowing it, he also knew he could go way too far down the road for turning back before we discover the kind of horse[bleep] our money is being wasted on.

There are some things open to debate—Obama: fascist or Marxist, for example—but this is not. While portraying himself as the anti-politician (healing, uniting), he is more cynical and two-faced than any other politician not named Arlen.

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The Blunder Leading the Blunder

Somebody sent this to me a while ago, but I forgot to post it.

TARP, in pictures (abbreviated from the original):

1.jpg

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4.jpg

5.jpg

That’s a five-thousand word essay in five pictures.

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Minding the Store

When we Bloodthirstani criticize President Obama, we can be (and are!) dismissed as knuckle-dragging troglodytes. Fair enough—except for Aunt Agatha, who would never drag her knuckles, as doing so might chip a nail.

But what about this fine example of homo gyno erectus?

warren

Until last year, Harvard Law School professor Elizabeth Warren was perhaps best known for her writing on bankruptcy and consumer finance. But last fall, she was appointed chair of a newly created Congressional Oversight Panel, which is charged with keeping tabs on the $700 billion bailout of the financial sector – an effort formally known as the Troubled Assets Relief Program.

Q: You’ve been quite critical of the Treasury. What troubles you most about what you’re getting and what you’re not getting?

A: There’s no discussion of the overall policy. Instead, there are specific programs that are announced, and from that, it’s necessary to reason backwards to figure out what the goal must have been. It’s like a “Jeopardy!” game. If this is the answer, what was the question? It’s frustrating because without a clearly articulated goal and identified metrics to determine whether the goal is being accomplished, it’s almost impossible to tell if a program is successful.

Q: Do you have a clear sense of what the overall TARP plan at this point is supposed to do? Are you capable of summarizing what it’s supposed to be doing?

A: No. And neither is Treasury. Treasury has given us multiple contradictory explanations for what it’s trying to accomplish.

There’s a major problem and a minor problem. The minor problem is documentation. I’ve spent four weeks now looking for someone who can give me the details of the stress test so that we can do an independent evaluation of whether the stress test is any good.

We get: “someone will call [you] right back.” Only the call doesn’t come.

The major problem is that Treasury has not articulated its goals. And without that, we can’t have a robust debate about whether they’re headed in the right direction; instead, we’re stuck with this more technical argument about the implementation of the [Term Asset-Backed Securities Loan Facility] or the details of the Capital Acquisition Program. And that misses the central question of, should we be subsidizing failing banks or liquidating them? When we acquire capital, should we exercise more control over the institutions that take the money or less control? Those are the central policy issues that the American public has a right to participate in.

Can I get an amen?!

Who do you trust—someone like Elizabeth Warren, or Lonesome Tim Geithner, who, as far as I know is still holed up in Treasury like some Howard Hughes recluse?

lol

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Plummeting to Prosperity

Interesting video puts the last six months of spending commitments into perspective:

I won’t give away the ending, but suffice it to say that we’re spending like the United States of Leona Helmsley.

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In for a Penny…

In for another $167,000,000,000

U.S. congressional budget analysts have raised their estimate of the net cost to taxpayers for the government’s financial rescue program to $356 billion, an increase of $167 billion from earlier estimates.

The Congressional Budget Office had originally projected the $700 billion Troubled Asset Relief Program would cost taxpayers $189 billion.

The additional cost, which applies to TARP spending for fiscal years 2009 and 2010, was included in the CBO’s March projection of a $1.8 trillion deficit for fiscal 2009, which ends September 30.

The TARP cost projection was raised due to changes in financial market conditions, new transactions and a shift in expected timing of payments, the CBO said.

The Treasury Department announced plans to use some of the money to help avoid home foreclosures and made new deals with Bank of America and American International Group. Those programs involved higher subsidy rates than previously estimated, the report said.

What’s that, about a thousand dollars additional on every taxpayer’s bill? On a rounding error?

I just wish I was as wealthy as these geniuses thought I was. I don’t have it.

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What Doesn’t TARP Stand For?

Michelle Malkin has her own understanding of what TARP stands for; I have mine.

Taxpaying A**holes Reamed by Poltroons.

That’s why she’s media royalty and I’m stuck walking the Bloodthirsty Puppy.

While a few big firms, such as Wells Fargo and JP Morgan Chase, have curtailed their campaign giving, others are quietly doling out cash to select members of Congress, particularly those who serve on committees that oversee TARP. In recent filings with the Federal Election Commission, the political action committee for Bank of America (which got $15 billion in bailout money) sent out $24,500 in the first two months of 2009, including $1,500 to House Majority Leader Steny Hoyer and another $15,000 to members of the House and Senate banking panels. Citigroup ($25 billion) dished out $29,620, including $2,500 to House GOP Whip Eric Cantor, who also got $10,000 from UBS which, while not a TARP recipient, got $5 billion in bailout funds as an AIG “counterparty.” “This certainly appears to be a case of TARP funds being recycled into campaign contributions,” says Brett Kappell, a D.C. lawyer who tracks donations. (A spokesman for Cantor did not respond to requests for comment. A spokeswoman for Hoyer said it’s his “policy to accept legal contributions.”)

Totally Amoral Rejects Pad?

Trashing America for Real Profits?

Take All Riches Posthaste?

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