TARP IS PART TRAP and
Over-hanging the market are fears that CitiGroup or Bank of America
will fail or need to be nationalized, as has happened in the UK to Northern Rock
Bank of Scotland. Tonight, 1/27/2009, Bank of America and CitiGroup each
rose more than 9.3% in after-hours trading today. The Obama Administration
seems willing to buy these banks' toxic (worthless) bad debts at above-the-market
prices and resist cheaper and a common sense nationalization. This should send the
up quite strongly. Our untouched Peerless Stock Market Timing shows lots of Buys
since mid November.
Blame The Aniquated and Unrepresentative US Senate
The Coming of The Depression II.
1/30/2009: the Republican minority have turned down the Democrats's stimulus
This is desperately needed. Layoffs are reaching the 1 million a month
Private spending is dwindling. Banks don't want to make loans. And
to Hoover's memory, are repeating his arguments against increasing national debt
provide jobs no longer provided by the private sector. Their newly discovered
to balanced budget is about as hypocritical as you will ever hear from any
of rogues anywhere. These Republicans put drunken sailors to shame between
and 2006 with their reckless government spending and cut backs by the hundreds
billions on needed taxes on the very wealthy. Now they can conduct their "class
with near immunity in the Senate with fillibusters.
the US Senate will be abolished, when folks see what a disgrace it is.
unrepresentative, inefficient and with no effective rules of closing long-winded
by the plutocrats from thinly populated states, the will of the majority of
people mean nothing. They care not at all about the extreme hardship their
the tens of millions out of work. Minority "class warfare"from the top
These rogues will do whatever it takes to protect the one percent that own 50%
The buying of "troubled assets" from banks at their pleasure and discretion
ensures that the banks will only sell the worst of their toxic debt to the US. How
these valueless assets be priced? By whom? The banks want them priced at their
original faced value. Will their be any transparency about the pricing? No
from the Obama Administration yet.
What they are saying is that these toxic assets will go into into a Government
owned "Bad Bank", the banks will get hundreds of billions and this is somehow
to promote financial recovery. How? Will it really? Paulson's TARP
only in wasting vast public sums on undeserving banks and scaring investors, while
underscoring how blatantly crooked the Bush Administration was and how stupidly and
selfishly banks have been run. What Obama is proposing looks like more of the
this new TARP II bank bailout fails, and I believe it will, for the reasons discussed
below, Obama's credibility will drop sharply. Then where will the leadership
is need to produce a recorvery going to come from?
Incredibly, the Obama administration is developing
plans to pour hundreds
of billions of taxpayer money into banks beyond the $700 billion bailout Congress
already has approved. The International
Monetary Fund just reported that bank losses
in the U.S.and Europe already have topped $1 trillion and could reach well over $2
HOW MUCH OF A RALLY CAN
In another year, two trillion dollars will be wasted on corrupt private banks. What
But that's what Obama wants. So many things need doing. But Obama wants
for private banks. Obama says that private industry is the "engine" of
job creation. He said this despite the fact that almost 1.2 million jobs were lost
in the private
sector just in November and December 2008. Obama's loyalty to the private banks
very clear. They heavily sponsored his campaign, Clearly Obama is no spokesman
for public employment. But that is what is needed. Millions need jobs now.
The money would
be better spent coming as loans from a national "good" bank. That
would fill the void and
restart the economy. Obama's plan will please the stock market long enough to let
unload the shares they bought between 7500 and 8000. But Obams's is no lasting
the public sees how Obama has wasted a trillion on banks, the stock market will be in very
Does the chart below of the DJI starting at the end of September 2008
show a calmer or more stable market? Hardly. No clear explanation has
given about how giving a trillion dollars to banks helps Main Street America, except
that this will enable to make bank loans again. This is absurd reasoning. We
payer are giving banks a trillion dollars so that they can make more loans to us when
they chose to, but charge us a high interest rate in the bargain!
US FEDERAL RESERVE AND TREASURY DISGRACED
BY PAULSON, BERNANKE, GREENSPAN and GEITHNER
I have written long and hard criticism of Bush's Treasury Secretary
Hank Paulson and Federal Reserve Chairman Bernanke.
A few months ago, when you Google "Paulson" "crook"
"corrupt" you found
only my Blog and two or three others. Not so now. He is held in contempt by
even professional investors. from Rogers to Soros. He is a quote that I saw today.
"Famed money manager Jeremy Grantham says that the continuing credit
is largely the fault of poor leadership at the Federal Reserve and U.S. Treasury
(and) a small clique of financial policymakers that now includes new Treasury
Secretary Tim Geithner....Reviewing the last two years, of course, it's a misplaced
trust in the competence of our leadership, from the very top...They were cheerleaders,
all of them. And they encouraged reckless leverage and low-quality debt.
"Grantham said that Geithner, who was president of the New York Federal Reserve
Bank, current Fed Chairman Ben Bernanke, and even former Fed Chairman Alan
Greenspan, as well as former Treasury Secretary Hank Paulson, must share the blame.
They made no effort to resist it in any way. Even jawboning would have been a great
advantage over nothing .. And Bernanke couldn't even see the house bubble. On our
data and Robert Shillers, it was a three-sigma, one-in-100-year event. After 100
years of being flat, it soared after 2000. You could not miss it. And right at the peak,
October '06, Bernanke said
quote 'The U.S. housing market merely
a strong economy'. What was he looking at? Where were his
are the guys we picked out of millions to lead us in a crisis. And they can't see a
three-sigma bubble? Every single bubble of that kind has broken."
GEITHNER IS A WALL STREET PUPPET
Obama's Geithner tells us that this time TARP payments will not be wasted
on bonuses, extra lobbying, million dollar offices and private jets. There will be a
public transparency he assures us, in order to get the $350 billion released to his
the big banks. But why should we believe him? Why should we think these
will make any more loans? Why should we think this huge sum will stimulate the
economy any more than the first $350 billion in TARP payments? Even if there
is a short-term rally, the charts for CitiGroup and Bank of America look terrible.
They look like it is only a matter time before they go to zero!
As the head of the NY Federal Reserve, Geithner, acquiesced silently and
ineffectively while CitiGroup increased its bad loan and totally mis-managed their
leverage after 2005. In addition, he did not protest the first round of
and wasteful TARP payments. The notion that he will suddenly be tough on banks
seems very fanciful. Small wonder the bank stocks are now starting to bounce, as
the Treasury prepares to release the second half of the TARP payments. Geithner
has consistently opposed nationalization and been an advocate of making the banks such
a superb bargain for private investors that the government will not need to do more.
Wall Street again wins out over Main Street. No one asks if there are not better
for the $350 billion. We still have NO GUARANTEE that this second round of
payments will free up credit and get banks to make loans. A national bank would do
this immediately and without administration by the same over-paid bank executives
that have made one bad decision after another as the housing bubble emerged.
those Goldman Sachs campaign contributions to Obama were not wasted!
Robert Reich's Recommendations for A Good "Bad Bank"
Jan 19, 2009
"It looks increasingly likely that a big chunk of the TARP II funds will be
used to set up
what's being called an "aggregator" -- or "bad" -- bank to buy up the
bad assets that continue
to hobble the balance sheets of private-sector banks. That's what Hank Paulson and Sheila
suggested Friday. Obama officials-in-waiting seem to view the idea favorably.
"A Bad Bank is surely better than the piecemeal, unpredictable, and opaque approach
of TARP I. But in order that the Bad Bank not turn into another giant taxpayer-financed
for the benefit of shareholders, creditors, executives, traders, and directors of the
banks that got
us into this mess in the first place, any Bad Bank purchase of their toxic assets ought to
conditions similar to the ones I suggested recently for dispensing TARP II funds. Until
taxpayer-financed Bad Bank has recouped the costs of these purchases through selling the
toxic assets in the open market, private-sector banks that benefit from this form of
relief must (1) refrain from issuing dividends, purchasing other companies, or paying off
(2) compensate their executives, traders, or directors no more than 10 percent of what
received in 2007; (3) be reimbursed by their executives, traders, and directors 50 percent
whatever amounts they were compensated in 2005, 2006, 2007, and 2008 -- compensation
which was, after all, based on false remises and fraudulent assertions, and on balance
that hid the true extent of these banks' risks and liabilities; and (4) commit at least 90
their remaining capital to new bank loans." Source
A NATIONAL BANK IS A MUCH
A publicly owned bank would be able to make all the loans needed very quickly.
The public would benefit. It could not be run worse than CituGroup or Bank of
CEOs. The US Government need not be a "barren whore", as those who think
private capital is the only legitimate capital and source of jobs. Who do you think
created the Atom Bomb or built all the highways we drive on or the huge hydroelectric
power plants? We'll see how the UK model of nationalized banks fare, while trillions
and trillions will go into the American banks for profit system waiting for the housing
to play itself out.
Not surprisingly, some say
that CitiGroup originated the verbiage used back in
2007: that they are the "good bank" and a bank taking on their bad, toxic,
valueless will then
be the "bad bank".
Contributions To Obama from Wall Street Bankers
Goldman Sachs $955,000
JP Morgan $642,000
See also - Thursday, June 26, 2008 Obama's
Accepts Millions From "Subprime" Tied Contributors
Chief of Staff Pick Took Campaign Contributions from Wall Street"
Friday, November 07, 2008 By Fred Lucas, Staff Writer
"President-elect Barack Obamas choice for White House chief of staff is
one of the
biggest recipients of Wall Street money in Congress, according to a Washington, D.C.-based
money-in-politics watchdog group. The Center for Responsive
Politics has issued a report
highlighting millions of dollars in campaign contributions that Rep. Rahm Emanuel (D-Ill.)
raised from individuals working in the hedge fund industry, private equity firms, and
investment firms. Emanuel has raised more money from individuals and
political action committees
in securities and investment businesses than from any other industry.
This comes after a presidential campaign that saw Obama frequently criticize Wall Street
and blamed lack of government regulations for the economic crisis that hit the country in
Emanuel, a former Clinton White House aide, is chairman of the Democratic Congressional
Campaign Committee and received much of the credit for the Democrats winning a majority in
the House of Representatives in 2006 the first time in 12 years.
For his own 2006 re-election campaign, where he faced no serious opposition, Emanuel
raised $1.5 million from the investment industry. His other sources of contributions came
lawyers, who gave $682,900, while people working in the entertainment industries gave
More on Geithner
"In March 2008, Mr. Geithner brokered the deal enabling JPMorgan Chase
to acquire Bear Stearns, with the crucial help of a $29 billion loan from the Fed.
time, critics said that the terms of the deal were too generous, and that Mr. Geithner,
with no experience in private banking or finance, had been too reliant on Wall Street
leaders to show him the ropes.
Giving a trillion dollars will not save these banks. Their losses from falling
prices could easily be tow or three trillion, says NYU Professor Nouriel Roubini.
Compare the high Insider Selling (red Distribution) charts of
Bank of America with now defunct Washington Mutual or Indy Bank in the US
or the UK's nationalized Northern Rock or Bank of Scotland
CITIGROUP (C) - (C) 2009
BANK OF AMERICA (BAC) - (C) 2009
WASHINGTON MUTUAL (WM) - (C) 2009 www.tigersoft.com
TigerSoft's inventions, the "Accumulation Index" and
show you what insiders are doing with their own money. Forget
what they are saying, watch whether they are buying or selling, It
is vital to your investment survival that you understand the degree
to which the stock market is rigged by insiders and market professionals
against the unwary investor. Step
#1, memorize below what a stock
looks like on its way to bankruptcy. WAMU and IndyMac Bank illustrate
this. Google "TigerSoft"
"Bankruptcy" to see many other examples.
INDY BANK (INDY) - (C) 2009