Taibbi writes: "I hope everyone saw ex-Federal Deposit Insurance Corporation chief Sheila Bair's editorial in the Washington Post, entitled, 'Fix Income Inequality with $10 million Loans for Everyone!'"
Matt Taibbi at Skylight Studio in New York, 10/27/10. (photo: Neilson Barnard/Getty Images)
Free $10 Million Loans for All!
21 April 12
ave been on deadline this week, but wanted to post a few interesting links:
• I hope everyone saw ex-Federal Deposit Insurance Corporation chief Sheila Bair's editorial in the Washington Post, entitled, "Fix Income Inequality with $10 million Loans for Everyone!" The piece might have set a world record for public bitter sarcasm by a former top regulatory official.
In it, Bair points out that since we've been giving zero-interest loans to all of the big banks, why don't we do the same thing for actual people, to solve the income inequality program? If the Fed handed out $10 million to every person, and then got each of those people to invest, say, in foreign debt, we could all be back on our feet in no time:
Under my plan, each American household could borrow $10 million from the Fed at zero interest. The more conservative among us can take that money and buy 10-year Treasury bonds. At the current 2 percent annual interest rate, we can pocket a nice $200,000 a year to live on. The more adventuresome can buy 10-year Greek debt at 21 percent, for an annual income of $2.1 million. Or if Greece is a little too risky for you, go with Portugal, at about 12 percent, or $1.2 million dollars a year. (No sense in getting greedy.)
Every time I watch a Republican debate, and hear these supposedly anti-welfare crowds booing the idea of stiffer regulation of Wall Street, I wonder how many audience members know that Bair's plan is more or less exactly the revenue model for all of America's biggest banks. You go to the Fed, get a buttload of free money, lend it out at interest (perversely enough, including loans right back to the U.S. government), then pocket the profit.
Considering that we now know that the Fed gave out something like $16 trillion in secret emergency loans to big banks on top of the bailouts we actually knew about, you might ask yourself: How are these guys in financial trouble? How can they not be making mountains of money, risk-free? But they are in financial trouble:
• We're about to see yet another big blow to all of the usual suspects - Goldman, Citi, Bank of America, and especially Morgan Stanley, all of whom face potential downgrades by Moody's in the near future.
We've known this was coming for some time, but the news this week is that the giant money-managing firm BlackRock is talking about moving its business elsewhere. Laurence Fink, BlackRock's CEO, told the New York Times: "If Moody's does indeed downgrade these institutions, we may have a need to move some business around to higher-rated institutions."
It's one thing when Zero Hedge, William Black, myself, or some rogue Fed officers in Dallas decide to point fingers at the big banks. But when big money players stop trading with those firms, that's when the death spirals begin.
Morgan Stanley in particular should be sweating. They're apparently going to be downgraded three notches, where they'll be joining Citi and Bank of America at a level just above junk. But no worries: Bank CFO Ruth Porat announced that a three-level downgrade was "manageable" and that only losers rely totally on agencies like Moody's to judge creditworthiness. "A lot of clients are doing their own credit work," she said.
• Meanwhile, Bank of America reported its first-quarter results yesterday. Despite that massive ongoing support from the Fed, it earned just $653 million in the first quarter, but astonishingly the results were hailed by most of the financial media as good news. Its home-turf paper, the San Francisco Chronicle, crowed that BOA "Posts Higher Profits As Trading Results Rebound." Bloomberg, meanwhile, summed up results this way: "Bank of America Beats Analyst Estimates As Trading Jumps."
But the New York Times noted that BOA's first-quarter profit of $653 million was down from $2 billion a year ago, and paled compared to results of more successful banks like Chase and Wells Fargo.
Zero Hedge, meanwhile, posted an amusing commentary on BOA's results, pointing out that the bank quietly reclassified nearly two billion dollars' worth of real estate loans. This is from BOA's report:
During 1Q12, the bank regulatory agencies jointly issued interagency supervisory guidance on nonaccrual policies for junior-lien consumer real estate loans. In accordance with this new guidance, beginning in 1Q12, we classify junior-lien home equity loans as nonperforming when the first-lien loan becomes 90 days past due even if the junior-lien loan is performing. As a result of this change, we reclassified $1.85B of performing home equity loans to nonperforming.
In other words, Bank of America described nearly two billion dollars of crap on their books as performing loans, until the government this year forced them to admit it was crap.
ZH and others also noted that BOA wildly underestimated its exposure to litigation, but that's nothing new. Anyway, despite the inconsistencies in its report, and despite the fact that it's about to be downgraded - again - Bank of America's shares are up again, pushing $9 today.
• Speaking of BOA, you can help the bank improve its website....
|
THE NEW STREAMLINED RSN LOGIN PROCESS: Register once, then login and you are ready to comment. All you need is a Username and a Password of your choosing and you are free to comment whenever you like! Welcome to the Reader Supported News community. |
 24 May 2013
|
 23 May 2013
|
 22 May 2013
|
 23 May 2013
|
 23 May 2013
|
 22 May 2013
|
 24 May 2013
|
 22 May 2013
|
 22 May 2013
|
Comments
We are concerned about a recent drift towards vitriol in the RSN Reader comments section. There is a fine line between moderation and censorship. No one likes a harsh or confrontational forum atmosphere. At the same time everyone wants to be able to express themselves freely. We'll start by encouraging good judgment. If that doesn't work we'll have to ramp up the moderation.
General guidelines: Avoid personal attacks on other forum members; Avoid remarks that are ethnically derogatory; Do not advocate violence, or any illegal activity.
Remember that making the world better begins with responsible action.
- The RSN Team
That is because the republican rank and file know it is wrong - the dems do not either in rank and file or in CONgress so they join in the bail out crying crokidile tears that they had too ... see who contributes to them and see who is bought.
New campaign finance law; If you or your business or your company is a direct recipient of tax payers monies such as grants or loans you can not contribute a dime to any politician or any political organization
Martinfre: Can you please clarify what you mean by "it." Taibbi was referring to regulation. Are you saying that Republican rank and file "know [regulation] is wrong."?
Amazing how they fail to see these banks are the real welfare recipients! I suppose they'd also have us believe that the banks "earned" the money, that their CEO's deserve big bonuses to keep them, and that the are the "job creators."
Ha!
Why don't they ("They"?? As in those you elected to allegedly represent you including the Pres') actually govern, take the loans away from the banks, outlaw monopolists and get people back in their homes, break the giants up and use the takings to fund (or guarantee the funds of) local banks and Credit Unions that support and fund community projects.
Greenland has been doing all right since they decided that no bank was "too big to fail" and let them do so.
Oh aye -and fill the prisons with those greedy bastards who caused all the grief since 2007 (and before), replacing the "marijuana felons" and other small-timers AND disband the criminally-corr upt and incompetent credit bureaus, replacing them with state oversight of this function.
Might sound simplistic but so is much considered common-sense!
I'm just fed to the teeth with continually being reminded -and having our faces rubbed in it- how the true criminals keep making hay while the sun of their bought-and paid for lobbyist-funded representatives shines on their Armani-suited shoulders, shiny shoes and wriggling butts!
Do a little research, make a PLAN, we'll likely ALL grab our pitchforks or whatever and follow you.
But this "They OUGHT"...ain't cutting it.
Don't be a child any more. Grow up, make a plan. You'll have friends...and adherents.
I've posted a plan elsewhere on RSN (after considerable research and meetings with other out of work architects and contractors -and even a couple of Realtors of the more progressive persuasion) and actually written to Obama, Melkley, Wyden and DeFazio -my Oregon politicos about it.
B.T.W., I DO TAKE EXCEPTION to being deemed a "Child" from one who uses "dude". I don't post anything without considerable knowledge or research on any given subject! I've heard so many wild and fantastic scenarios and suggestions on RSN (INCLUDING THIS ARTICLE which has has a "No-starter" tone to it's basic proposition) that it seems a waste of time setting forth a plan in any detail: there's a lot of short attention spans here too.
Since you are looking for a "PLAN" here's my proposal in precîs form. I'll provide a copy of the whole letter on request - no room here but it has nothing to do with large amounts of $ to individuals.
There is an outline in my post here too, starting with "actually govern, take the loans away from the banks, -----!"
I'll have to take a new post space for the rest.
1. Stop speculators buying up foreclosed and deteriorated properties -or there will be a new generation of slumlords all over the country.
2. Take the unused or overly speculated and held in-house or off-shore bail out money, tax EACH and ALL short term speculative transactions a small fee (Rep' DeFazio already has such a proposal moving through the lobbyist-infect ed corridors of power).
3. Put this a pool and negotiate purchases of neglected and foreclosed properties at the current depression prices or less, in blocs via states who wish to participate and administer such a scheme, administered by state-supervise d community banks and credit Unions.
4. Put renovations of these properties out in bid-packages to Architects, Engineers, Planners, Contractors, Landscapers and other related trades and target the resultant properties for purchase with a certain amount held back for low-income persons or those bankrupted by the destruction of the speculators.
4. Provide sweat-equity grants for individuals who wish to contribute labor and effort to improvements to properties they wish to buy, in lieu of down-payments.
5. Make available purchases at favorable rates to vets who have been lost their homes while serving in the illegal wars now in progress -and take funds from the Pentagon for this.
6. Finance infrastructure, social and small-business incentives linked to the above.
Just a tiny sample but a "plan" -OK?!
Oh, I see...you don't think very much or very often. Americans used to think.
That's why they elected Roosevelt four times...
I give up "dude"!
You must be approaching puberty
by the tone of y'r writing
and the depth of y'r ability to read a simple post.
I HAVE WRITTEN in depth
to Obama, Wyden, Merkely and DeFazio.
They're the ones who get the "DOIN' done for the rest of us -isn't it why you lot elect them?
Once again my full written plan
in email letter form
is available to anybody
who wants to read it
of which the above is a tiny precis.
It appears that you aren't in a position
or of a mentality,
to get through the whole thing
(it requires a bit of "thought") "dude".
So I'll desist.
Some of the other readers appear to get it at least.
For y'r convenience
I'm breaking it down
into smaller phrases
so that you
can read it
carefully.
I give up in your case
as I feel like I'm
rattlin' an empty
tin can!
The rest is silence -'nuff said.
Credit all adult US persons with a 2 Mil CD, or whatever, create a corporation of the entire adult US population,, put it onto the stock exchange, advise and encourage each to invest at least part of it (into some of your suggestions)res ponsibly; then let em ride and see how it goes.
Modifications encouraged.
LOL
both use the government to live at some one elses expense.
Finding work is almost impossible. Haven't you noticed? Former Middle Class families have lost their jobs and homes, as well as medical benefits. Many have tried to find work and with hundreds and thousands applying for the limited openings it is almost impossible.
I don't know what you do to support yourself and your family R.L. but do NOT compare the Poorest of the Poor w/ the Richest of the Rich. It is in poor taste and quite outrageous.
How do the powers-that-be sleep at night? Bonuses of tens of millions of dollars while they head companies that are bankrupt. And WE (the taxpayers) paid those bonuses and WE paid the interest when they loaned us the $$ we had loaned them. I feel sick to my stomach.
I have seen the people's voices in Ohio stop our Repub. Gov. Kasich from hurting our people with some of his Koch inspired legislation he tried to run through the State Legislature. This was just last November.
I signed a petition to put this on the ballot last Spring and in the Fall the People of Ohio told the Rethugs where to go, at least on this issue.
I am happy to have been a part of the process and Proud of my Fellow Citizens who stood up and said "NO".
Voting and being aware of your responsibilitie s as a Citizen of our country is not to be demeaned.
I can ignore the ridiculous ads on TV and Radio, just as I can ignore Billboards and Yard Signs.
Finding out what is important means investigating for yourself and NEVER take someone else's views as your own unless you understand what they are saying.
Legislation isn't a solution either, as it has to be enacted by legislators, and in order to elect a majority who might do that, the votes would have to be counted. Since the Supreme Court ruled in 2000 that if the 1% don't like the way an election turns out, they don't have to count the popular vote, the plutocracy established by the Constitution remains secure and power is not, and never has been, vested in the hands of the people.
Most voters believe, according to a Rasmussen survey, that people chosen at random from the phone book could do a better job than Congress. So why do they continue to vote? Habit? Masochism? Apathy?
The fact is that not even the most radical or reactionary among us could do a worse job of representing our interests than our power-corrupted elected officials. The first step in taking back our power is to stop giving it away. Don't vote. Boycott2012!
Lobbyists, bought and paid for elected officials kept there by public apathy, a pathetic and corporate press and an infotainment-ba sed electoral season lasting four years which plays into the hands of the wealthy, are only part of the Plutocratic norm and not voting is taking the brakes off the whole nepotistic cabal of power-drunk bullies.
My take is that if you vote (and you SHOULD -but in an informed way-) it is your responsibility to stay informed in depth so that your vote counts in holding these elected bod's feet to the fire, not by being a once-every-four -year activist for a week or so but by being wholly involved and active!
It would be interesting to see what would happen here if the vote was mandatory, as in Australia.
Several decades ago, Margaret Thatcher claimed: "There is no alternative".
She was referring to capitalism. Today, this negative attitude still persists.
I would like to offer an alternative to capitalism for the American people to consider.
Please click on the following link. It will take you to an essay titled: "Home of the Brave?"
which was published by the Athenaeum Library of Philosophy:
http://evans-experientialism.freewebspace.com/steinsvold.htm
John Steinsvold
“Insanity is doing the same thing over and over and expecting a different result."
~ Albert Einstein
There is a sense helplessness and despair coming from those who would wish to bring America back from the brink of ruin. In the face of disaster, sometimes only a sense of humor can save us.
BofA is headquartered in CHARLOTTE, NC. It lost its SF HQ when it was acquired by NationsBank about 10 years ago.
"The naive (or deliberately misleading) version of Fed policy is the claim that Ben Bernanke is 'giving money' to the banks. What it actually does, of course, is buy stuff, usually short-term government debt but nowadays sometimes other stuff. It’s not a gift."
I think Krugman understands monetary policy a little better than does Bair. She is not an economist, & assuming Krugman is right, she clearly doesn't understand macroeconomics.
http://krugman.blogs.nytimes.com/2012/04/20/plutocrats-and-printing-presses/
The Constant Weader @ http://www.RealityChex.com
RSS feed for comments to this post