The Fed’s $7 Trillion Secret Loan Program:
Eliot Spitzer on the aforelinked scandal revealed by Bloomberg:
Imagine you walked into a bank, applied for a personal line of credit, and filled out all the paperwork claiming to have no debts and an income of $200,000 per year. The bank, based on these representations, extended you the line of credit. Then, three years later, after fighting disclosure all the way, you were forced by a court to tell the truth: At the time you made the statements to the bank, you actually were unemployed, you had a $1 million mortgage on your house on which you had failed to make payments for six months, and you hadn’t paid even the minimum on your credit-card bills for three months. Do you think the bank would just say: Never mind, don’t worry about it? Of course not. Whether or not you had paid back the personal line of credit, three FBI agents would be at your door within hours.
Yet this is exactly what the major American banks have done to the public.
Or, as Jon Stewart asked, “How the f*** is it that Martha Stewart went to jail?”
(Via Daring Fireball)
Gruber finds the perfect quote.
G.M. Prices Its Shares at $33 in Return to Stock Market – NYTimes.com: “Fulfilling an implicit mandate from Treasury, the largest allocation of G.M. shares has been made to institutions representing American retail investors, these people said. The move was meant in part to blunt criticism that taxpayers would be cut off from what company and government officials insist was a potentially big rise in G.M. shares. (Several of the people involved in the offering said they expect to see a potential 10 to 20 percent jump in the share price on Thursday, typical for an initial offering.)”
(Via The Daily Beast.)
If you are going to do this, at least do it right. So far so good.
In an ideal world, this year the Street would acknowledge the public largess by having the sense not to pay bonuses of more than six digits — hey, worker bees need money in order to survive in the high-cost New York City area — and they would make a nice, voluntary contribution to the government that saved it. But the Street isn’t in the gratitude business; it’s in the making-money business.
via Allan Sloan – Let Wall Street run wild, without my money – washingtonpost.com.
It’s obscene to pay bonuses for some of the most colossal failures in banking history. This is just not right.
An Ultimatum for Carmakers From Obama – NYTimes.com:
“‘And so today, I am announcing that my administration will offer G.M. and Chrysler a limited period of time to work with creditors, unions and other stakeholders to fundamentally restructure in a way that would justify an investment of additional tax dollars; a period during which they must produce plans that would give the American people confidence in their long-term prospects for success,’ Mr. Obama said.”
(Via NY Times.)
If only private shareholders, particularly institutions, would be so activist, we wouldn’t be in a far better position.