On Mar 22, 2009, at 11:03 PM, Chris Gehlker wrote: > This is an elaboration on Chuck;s notion that institutions who didn't > take bailout money shouldn't face new disclosure requirements. > > There are more ways to swill at the public trough than than to take > TARP money directly. Here is one way. > > "Under one part of the plan, the FDIC will put up most of the money to > create a new public corporation which will capitalize private funds to > buy up sketchy loans. In the second part, hedge fund and private > equity speculators will purchase older toxic bonds clogging bank > balance sheets, which Treasury now calls by the delightful name, > "legacy" assets. (Sorry, a legacy is a gold watch from Grandpa. This > legacy is junk.) Under yet another part of the plan, hedge funds and > private equity companies are expected to buy newly issued bonds from > banks, so that banks resume normal lending. > An alarming aspect of the plan is that private investment companies > will manage the process on behalf of the government, despite the fact > that government is providing most of the capital and insuring most of > the risk. Basically, the Treasury is colluding with private > speculators to create off-balance sheet entities, to offer new > windfall profit opportunities and disguise the true degree of risk. If > this all sounds vaguely familiar, Geithner's Treasury, with no sense > of irony, is offering a reprise of the several abusive and opaque > gimmicks that produced this crisis, a tour that winds back down Memory > Lane, from AIG to Enron." > > <http://www.huffingtonpost.com/robert-kuttner/geithners-last-stand_b_177850.html >> > > And what about all the companies that bought CDSs from AIG and > buddies? They may have received no taxpayer money directly but > nonetheless they couldn't survive with the bailout of their trading > partners. Should the taxpayers have no say in compensation levels for > the executives of those companies?
By that argument every tax payer with a bad mortgage that "couldn't survive" could fall under government regulation. Every company that will survive because of the porkulus bill's stimulus could fall under government regulation. When you go down that path there is no end to what the government can justify for your own good. The only for sure thing is that, in the history of civilization, it has never worked. Not once. Ever. No one has ever got the timing of the spending right. Even if congress were pious old folks with your best interest in mind, you don't want this. The fact that they are the most corrupt and incompetent group of fuck ups that the world has ever seen means that you REALLY don't want this. > > As Robert Reich said, there must be some mechanism for limiting the > pay of the executives of financial firms. There is. a) If you are a shareholder. Vote your shares on such rules. b) If you can't get enough support, then sell your flipping shares, you idiot, and get the heck out of that company. it is not the government's job to insure that your shares make money in a company being run counter to the way you want. It's your money at risk. If enough of you sell your stock in the company, it is forced out of business or forced to change it's ways. If the board sees the share price dropping like a stone, they get religion real quick since it is their money too. It's really that simple UNTIL the government commits to keeping the company in business no matter what the shareholders do. Speaking of which. This morning the Treasury announced it's plan to sell 'stock' in the toxic assets. Check this out. (from N.Y. Times) "The plan relies on private investors to team with the government to relieve banks of assets tied to loans and mortgage-linked securities of unknown value. There have been virtually no buyers of these assets because of their uncertain risk. But some executives at private equity firms and hedge funds, who were briefed on the plan Sunday afternoon, are anxious about the recent uproar over millions of dollars in bonus payments made to executives of the American International Group. Some of them have told administration officials that they would participate only if the government guaranteed that it would not set compensation limits on the firms, according to people briefed on the conversations. The executives also expressed worries about whether disclosure and governance rules could be added retroactively to the program by Congress, these people said." This part.. "Some of them have told administration officials that they would participate only if the government guaranteed that it would not set compensation limits" Knock me over with a feather.. Want to take bets that the administration roles over and plays dead for them? In the Rand'in sense, These investors can't be "forced" to invest so THEY are gong to set the terms under which they agree (if they do) to buy some of this stinking pile. In the article it said that the Fed is going to require that the investors could lose their ENTIRE investment BUT the tax payers will share in any upside. Good luck with selling "Heads I win, Tails you lose" to the people with the money. Bottom line is that they are not going to do this unless they can see how they are going to make a BIG pile of money. (enough money to be worth the risk). I bet congress is "shocked" that the potential investors are insisting on profits. What are they *we* going to do if the investors simply refuse to invest? How much of a return would you want to own every bad mortgage in the country? After all, just how much is a pile of dog crap worth? I'd say that piling it higher and deeper does not, in any way, increase it's value, so I wouldn't invest under any conditions. > It can be the market or it > can be the government. Right now it's neither and that's the worst of > both worlds. It has to be the market or nothing. Otherwise you get the French revolution or the Weimar Republic but with the inflation rate of Zimbabwe. WIth 3 trillion dollars being spent this year, inflation is a given, the question is how do you avoid hyper-inflation with the fed competing for a larger share of the GDP than during WWII. There are likely only a hand full of congress critters that are capable of understanding this and they are in the minority. Literally. The majorities answer will be to do it again, but harder. I wonder what's next when this doesn't work. (and it promise you, it won't) I'm going to buy gold on the dips and watch this train wreck from a distance. =c= _______________________________________________ OSX-Nutters mailing list | [email protected] http://lists.tit-wank.com/mailman/listinfo/osx-nutters List hosted at http://cat5.org/
