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Tuesday, October 21, 2008

Will you, won't you want me to make you?

The bailout just gets weirder and weirder. Now Paulson and the boys are actually going to use the taxpayers' hundreds of billions to accelerate the process whereby there will be only five banks left in the whole country. Put all our eggs in even fewer baskets -- oh, that will make us more secure.

And how much would you bet that one of the few final baskets will be Goldman Sachs, Paulson's former employer and home of his old cronies?

And check out how the billions will be divvied up:

On Monday, Mr. Paulson described a process for banks to apply for government investments that is little more complicated than the one-page term sheet he handed to the chief executives of the nation’s nine largest banks at a meeting last week at the Treasury Department.

The institutions, he said, must fill out a standardized two-page form and submit it to their primary regulator by Nov. 14. The Treasury will receive the applications, with a recommendation, from the regulator. Once it decides whether to inject capital, it will announce its investment within 48 hours. It will not disclose banks that withdraw or are turned down.

No chance for any corruption there, eh? It's amazing what an old bald white guy in a suit can get away with in America.

Comments (9)

You mean Government Sachs, don't you?

What happened to the idea that competition is healthy for the economy? I can only imagine the service charges and other fees these banksters will soon be extracting from us all. Paulson? He's got diamonds on the scalp of his bare naked pate.

Isn't today the day the Lehman derivatives unwind?
Whatever that means.

Goldman Sachs, for whatever reason, has managed to avoid being brought down like others in similar situations (a la Lehman, ML, MS). Maybe, just maybe, they knew what they were doing.

The offensive part to me is the two page form to apply for billions in government money. I can't even do my taxes in two pages.

Two pages? I suspect not many strings attached to those funds. Any limitation on executive comp. in those pages? Is the money limited for lending purposes or can they retire existing debt as well ? Any form of interest limitation in there? Small business preferences? Any funds directed to mortgage write downs?
Is it possible to over-slop these hogs?

Finally got this week's Economist from the mailbox: there is an amazing article on the causes of the current meltdown (Briefing: Modern Finance / Link by Link, pg. 79).

"... an old bald white guy in a suit can get away ...."

Why'd we let him get away? Actually, he's sitting in his office, he didn't go anywhere.

It's time we put him away.

Protester Tries To Arrest Rove in SF, by Terry McSweeney, October 21, 2008.

SAN FRANCISCO - There was major political theater involving President Bush's former chief of staff Karl Rove. A protester tried to arrest Rove for treason Tuesday morning while he was speaking at the Mortgage Bankers Association Convention, continuing in San Francisco.

Watch the video here.

Banks Admit They'll Keep on Hoarding Cash, George Washington Blog, Global Research, October 21, 2008.

Many people have been warning that the banks will keep hoarding cash no matter how much money the feds give them.

Now, even the banks themselves are admitting it.

As the New York Times writes in an article entitled "Banks Are Likely to Hold Tight to Bailout Money":

"Will lenders deploy their new-found capital quickly, as the Treasury hopes, and unlock the flow of credit through the economy? Or will they hoard the money to protect themselves?

John A. Thain, the chief executive of Merrill Lynch, said on Thursday that banks were unlikely to act swiftly. Executives at other banks privately expressed a similar view.


“It doesn’t matter how much Hank Paulson gives us,” said an influential senior official at a big bank that received money from the government, “no one is going to lend a nickel until the economy turns.” The official added: “Who are we going to lend money to?” before repeating an old saw about banking: “Only people who don’t need it.”

The banks are going to sit on the cash, not loan it out. So can everyone please stop saying that the bailouts were necessary to increase liquidity?

Then there's this to chew on, since nobody has any food stored.

Financial Crisis Could Leave 20 Million Jobless, AFP, Global Research, October 21, 2008

New job losses, 12-month projection, worldwide.

Maybe only 2 million of the lost jobs are American, extrapolating last month's 160,000 disemployments, times the next 12 months or so ... if 'things' are not more worser.

But don't panic. We shouldn't startle any public panic, merely stand there, hands supplicating, spread 'em, and take it.

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