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Tuesday, October 21, 2008

Where the bailout money will go, cont'd

When a company goes bankrupt, typically its shareholders lose their stock, which is taken over by the firm's creditors. In the case of the bank bailout currently in progress, however, that's not going to happen. Remarkable.

But wait -- it gets even worse. Not only will the bank shareholders keep their stock, but they'll also continue receiving an uninterrupted flow of dividends! And so the billions that the taxpayers are pumping into the banks will be promptly pumped out to the shareholders, instead of loaned out to other banks or to worthy borrowers.

The banks say they need to keep paying dividends to stay viable, but as these Harvard professors point out, that is complete and total hogwash. My fellow Americans, this is a ripoff, plain and simple.

Comments (5)

The part I like best is, the Banks receiving our money are not required to loan it out and can use it to buy other Banks. How cool is that?

But then, they might need to compete with the Fed as they plan to buy a few Banks for themselves.

The scope and audacity of this swindle are truly awe-inspiring.

Wait, wait, I meant rage-inspiring. Sorry about that.

getting money from the government 700 billion dollars
not having to to anything with it...

Larceny's and Bagmen: Start your embezzlers.

FBI struggles with financial fraud cases, Eric Lichtblau / Mumbai, October 20, 2008

The bureau slashed its criminal investigative work force to expand its national security role after the September 11 attacks, shifting more than 1,800 agents, or nearly one-third of all agents in criminal programmes, to terrorism and intelligence duties.

Current and former officials say the cutbacks have left the bureau seriously exposed in investigating areas like white-collar crime, which has taken on urgent importance in recent weeks because of ...

What worries me a lot, besides the fact that there will be few strings attached to the $700 billion+ that the government will dole out, is the lack of any continuous, formal oversight system. The General Accounting Office will eventually do some audits of the program, but by then much of the money will have been spent.

We're screwed, and we have ourselves to thank for electing such a sorry bunch of federal legislators. We baby boomers have ruined the country that "The Greatest Generation" passed on to us. This will be our enduring legacy.

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