[quote=ucodegen] The bank bailout will almost be completely paid back by the banks..[/quote]
Good grief, ucodegen, you sound like a wall street shill. Tarp is a non-issue to the bigger picture and doesn’t mean much considering what else is going on.
First of all, the Tarp money was not used as advertised. Either, Paulson lied about his intentions or was in a complete panic and had no idea the scope of the problem.
The problem was and still is trillions in ASSETS. The total cost could range from 8 -24 trillion in bad banker BETS.
These bad banker bets are being absorbed in primarily 2 ways.
1) The Fed bought 1.2 trillion
2) The GSEs are buying up 100 of billions per quarter
Number 2 is the ongoing bank bailout because the private market almost completely dried up.
It’s a big shell game and everything on how it was handled boils down to, not to republicans or democrats, but to the NY Fed.
The idea of secret banking cabals that control the country and global economy are a given among conspiracy theorists who stockpile ammo, bottled water and peanut butter. After this week’s congressional hearing into the bailout of American International Group Inc., you have to wonder if those folks are crazy after all.
Wednesday’s hearing described a secretive group deploying billions of dollars to favored banks, operating with little oversight by the public or elected officials.
We’re talking about the Federal Reserve Bank of New York, whose role as the most influential part of the federal-reserve system — apart from the matter of AIG’s bailout — deserves further congressional scrutiny.
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As Representative Marcy Kaptur told Geithner at the hearing: “A lot of people think that the president of the New York Fed works for the U.S. government. But in fact you work for the private banks that elected you.”
And yet the New York Fed played an integral role in the government’s bailout of banks, often receiving surprisingly free rein to act as it saw fit.
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That the New York Fed, a quasi-governmental body, was able to push around the SEC, an executive-branch agency, deserves a congressional hearing all by itself.
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Later, when it became clear information would be disclosed, New York Fed legal group staffer James Bergin e-mailed colleagues saying: “I have to think this train is probably going to leave the station soon and we need to focus our efforts on explaining the story as best we can. There were too many people involved in the deals — too many counterparties, too many lawyers and advisors, too many people from AIG — to keep a determined Congress from the information.”
Think of the enormity of that statement. A staffer at a body with little public accountability and that exists to serve bankers is lamenting the inability to keep Congress in the dark.
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Yet when unelected and unaccountable agencies pick banking winners while trying to end-run Congress, even as taxpayers are forced to lend, spend and guarantee about $8 trillion to prop up the financial system, our collective blood should boil.,
It’s just like those stories we used to hear about little old ladies being shoved into option arms by ruthless loan officers without understanding the contract. Except this time congress and the public are the little old ladies getting shoved into a bad deal.
The fact that 8 trillion is 3/4 the value of all mortgage in the country should make you scratch your head. Another investigator from the GAO said the total could be up to 23.8 trillion, double the size of the whole market.
So really, Tarp being paid back is a nice sound bite but also meaningless.
