Bank bailout turns out to have been good business for U.S.

[babylonsister]

http://www.mcclatchydc.com/251/story/69754.html


Bank bailout turns out to have been good business for U.S.
By Kevin G. Hall | McClatchy Newspapers


WASHINGTON — When Congress passed the $700 billion Wall Street bailout package last fall, critics said it'd be a money loser. But when 10 banks returned $68 billion of the money on Tuesday, President Barack Obama said the government had realized a small profit.

Did it really?

In addition to returning the $68 billion, the 10 banks paid the government $1.8 billion in dividends on the preferred shares of stock the government owned. That translates to an annualized rate of return of about 4.64 percent on the $68 billion.

In all, the government has received $4.5 billion from all bailout recipients, who've received $200 billion, for an annualized rate of return since Nov. 12, 2008, when the money was lent out, of 3.94 percent.

But the government had to borrow to pay for the bailout and pay interest on those borrowings. Once the interest costs are factored in, how'd the government do?

Not bad. The annualized rate of return of 4.64 percent on the $68 billion is well above the 2 percent interest the government was paying Monday to investors who were purchasing three-year bonds. The profit margin is even higher when measured against the interest the government is paying on a six-month bond — 0.31 percent.

snip//

Mark Zandi, chief economist of Moody's Economy.com, thinks that the warrants issued against preferred shares of stock from all bailout recipients — not just the 10 authorized Tuesday to repay the government — are worth at least $5 billion. So for a snapshot in this point in time, the Wall Street bailout has been profitable.

And that's before weighing the intangible question of what the costs of doing nothing might have been and the financial system had collapsed.

[Marsala]

1. That's all good news. The bad news is that unbelievable moral hazard has been created

It's now common belief that the government will back any "too big to fail" bank if it is in danger of failing.

[MidwestTransplant]

3. I don't worry to much about Moral Hazard now as the hazard has been felt

The new regulations being contemplated will make it so that too big to fail can't get themselves in so much trouble again.

[DireStrike]

5. Do ya have a link to any regulations with teeth being contemplated?

I'd be very pleasantly surprised to hear about such a thing.

[MidwestTransplant]

89. Just heard Geitner talking about it. Nothing specific.

[Badgerman]

2. The 'rosyness' is all smoke in this mirror...

yes, some of the TARP monies are being returned, in order that the banks can get out from under regulations restraining them from doing what caused their problem. FURTHER the monies in TARP are NOT available for other programs, and infact show up as deficit which is what is now being used as an argument to CURTAIL spending on jobs, infrascturcture repair, new construction including power grid, education or any other thing which is paramount to a real and lasting recovery. To bow. kiss. scrape at the feet of Obama at this point for doing a wonderful job with the banks is the heifght of ludicrous. We are going to get nothing and Wall St bankers are home scot free with more money than they started with.

[babylonsister]

4. Wow, sorry this doesn't enrage anyone. Not all news has to be bad. nt

[DireStrike]

6. Well thank you for posting it.

This is an important point.

[Peacetrain]

78. babylonsister..this is excellent.. and saving the credit markets

was so important. 70% of new jobs are created in small businesses, that rely on credit markets. The mess was and is so entrenched to even get this much of a turn around so quickly is phenomenal.

I get so impatient with people who want an instant solution and everything rosy yesterday. It does not work that way. They then get so despondent, and wanting to pull out instead of pulling together forward.

So thank you for the op!!

[redqueen]

88. Didn't see it till just now.

Thanks for posting it.

[Hannah Bell]

7. per this article, $200 billion lent out, $68 billion + $4.5 billion returned/ interest =

$72.5 billion returned, more than $100 billion still outstanding.

where's the profit on the program?

there is none yet.

not to mention the trillions in opaque loans granted by the fed.

[xchrom]

8. i don't agree with you often -- but +1 for your post. nt

[babylonsister]

9. Yes, it just sucks! I knew you wouldn't like it! nt

[Name removed]

11. Deleted sub-thread

Sub-thread removed by moderator. Click here to review the message board rules.

[Kaleko]

15. But I do :)

It's a first, tentative sign that the bailouts worked. Green shoots...! my goodness, how could that be?

Doesn't mean that I can't wrap my mind around other perspectives that are much more negative.
I think the global economy is a system of such complexity that no human can have a complete overview - not even Nobel prize-winning economists. The most credible experts admit this fact readily.

The trick is not to let habitual doom-sayers dominate my admittedly murky view. After all, nobody has a functional crystal ball, but many armchair economists claim they do.

[Hannah Bell]

18. serious question, asking where the profit they were going on about was.

if they'd touted it as a green shoot or good sign, i wouldn't have asked. but they repeatedly used the word profit, so i thought i missed something.

is that what you folks call "doom-saying"?

you must have easy lives.

[Name removed]

20. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Kaleko]

33. You just called me a half-wit.

In fact, your entire post is a pseudo-clever string of personal insults.

[TheWatcher]

36. Actually it wasn't directed at you, it was directed at the "Spin Brigade" who likes to scream bloody

murder every time someone DARES question the "feel good" Propaganda.

If you actually believe the banks after all they have done, you are SO welcome to it.

There have been PLENTY of fact-riddled posts linking to well analyzed refutations as to WHY all of this is full of shit.

If you can't see it, it's because you WON'T.

The Banks have NOT had record Profits this year.

In fact they have not had PROFITS at all.

Through the use of the changes in the Mark-To-Market Rules, they have managed to HIDE all of their losses off the balance sheets, and fool the Public into believing their criminal bullshit.

That's why a lot of us lovingly call it "Mark-To-Make-Believe Accounting" because THAT'S WHAT IT IS.

It's not real, and it's NOT REALITY.

Citi has been insolvent for MONTHS and should have been nationalized in February.

You've been sold a Bill Of Goods, and now they have to keep selling it to you everyday, with Soviet Level Spin, to keep you from finding out the truth.

I Did not insult you Kaleko.

To you I would very civilly encourage you to educate yourself BEYOND the Propaganda. The Media is NOT going to tell you the truth. neither are the Banks. And neither is the White House.

I save the insults for those who Preach Propaganda as FACT, and attempt to shout down anyone who can see what's really going on.

[Kaleko]

55. Leaving aside your insults and who they were directed to,

I take issue with your assumption that I need to be encouraged to educate myself beyond the propaganda.

Fact is, you don't know how much I've read and what authors have influenced my views on the economy.

I don't feel compelled to prove my credentials to you here either.

If you re-read my post # 15, you'll see that I have considered the different perspectives of many experts and concluded that no one has a complete overview. Obviously, that includes posters on the net like you.

[TheWatcher]

61. I never claimed to have a complete overview of anything, so please put the Broad Brush Away.

I could care less about your credentials, and it would probably be a waste of my time, so please put the superiority costume away. I'm not impressed by it.

You in turn, know absolutely nothing about me, who I know, and who I associate with, many who are far more on the inside than you or I could ever be.

If you TRULY believe that when the Major Banks were at the edge of Nationalization in March, that they somehow turned it all around in six weeks, for "Record Profits." you are either very naive or just not looking deep enough.

If you really can wrap your head around other perspectives continue to do so, but please dispense with the "green shoots" nonsense. That has about as much relevance as "synergy" or the other ridiculous CNBC pet terms form the Dot Com era.

Your best bet is to stay away from Mainstream Financial Media and their childlike reporting and buzz phrases.

Keep digging for the Truth.

It's not all Gloom and Doom, but things are a lot worse than you think.

We are being lied to. It's that simple.

[HamdenRice]

65. "If you can't see it, it's because you WON'T."

Wow, what a perfect description of your reaction to the underlying news in the OP.

Your analysis sounds like that of a religious fundamentalist -- it must be thus because I believe it has to be thus.

[babylonsister]

39. Kaleko, there are some very rude naysayers here. Most of this

thread has 'ignored' for me.

They could be right or wrong, but they are rude.

I'm going with the potential good news, too, so thanks.

[TheWatcher]

40. No you are going with the "Spin" that makes you feel good, because that's what you want.

You are interested in protecting your PERCEPTION.

That is why you cannot answer Hannah's Question, and why you RUDELY mocked her.

It's about feeling good for you.

Not about getting to the bottom of things and finding out what's really going on.

And if someone points out something that can't be refuted by the media's spin, you will just say it doesn't exist and dismiss it as doom-saying.

And I'm sure this appears as "Ignored" for you.

Because it's more important to "Ignore" everything that makes you uncomfortable or disturbs the false paradigm that helps you cope, rather than deal with the reality that is becoming more OBVIOUS by the day.

[Kaleko]

49. Yeah, talk about money, sex and 9/11

is an open invitation for experts to take the stage and demonstrate their superior insightfulness by hurling insults out their yin yangs.

Too bad it never works to convince anyone :)

[denem]

51. PROVE IT: "changes in the Mark-To-Market Rules, they have managed to HIDE all of their losses"

Links? GAAP please.

[TheWatcher]

62. GAAP. Oh you are so ADORABLE. :)

MANY companies no longer even USE GAAP to determine their fictional earnings reports.

They use "Pro-Forma" instead, which without getting into too much technical detail, in the end, might as well be "We Made It Up."

Amazon has been doing that for years.

As for your other inquiry, you will likely just dismiss it and say it doesn't exist, or ignore in favor of something that makes you feel good, or find a way to spin it into irrelevance, but Start Here:

http://www.bloomberg.com/apps/news?pid=20601109&sid=alC3LxSjomZ8

http://www.bloggingstocks.com/2009/06/05/new-accounting-rule-lets-banks-hide-big-losses/

http://www.huffingtonpost.com/2009/06/05/accounting-rules-hide-ban_n_212005.html

Do more Googling on the subject, so you have plenty to dismiss and ignore. But do keep in mind, they CAN'T hide those losses forever. Sooner or later they are going to have to fess up.

I stand by my statement.

Citi. Is. Insolvent.

Most of this "Recovery" is based on Propaganda, happy talk, "Hopes", "Assurances", "Optimism", and an Artifically Inflated Stock Bubble.

Those aren't "Green Shoots". They're Weeds.

[HamdenRice]

72. Do you even know what pro forma financial statements are?

Or their relationship to GAAP financials?

Because your post strongly suggests that you don't.

[TheWatcher]

90. Yes, Resident Guru Apologist. I Certainly Do.

And most companies that use them do so with the intent to mislead the public by making the company look more profitable than it actually is. That is why they want you focusing on Pro-Forma instead of the GAAP numbers, and why they are always flaunting those as the basis for how well the company did.

Amazon has been doing it for years, for an example.

Pro-Forma is just another way for companies to hide their losses under the cute, clever, and convenient auspices of "one-time charges", "unusual events", or any other bullshit they want to group under that umbrella.

Corporations are constantly dreaming up new ways to lie and deceive, and Pro-Forma fits that bill nicely.


I know it pains you greatly that someone like me who is so diametrically opposed to your positions actually KNOWS something, but sad to say it's true.

Go find some fictional spin to analyze from CNBC, or go circle jerk with HERETIC about how all wet the doom-sayers are.

I'm sure you have wonderful spin and analysis about the Mark-To-Make-Believe Accounting, but please, go find some Yes Bot to preach it to.

I am not interested in ANYTHING you have to say.

[HamdenRice]

93. No, you don't

You don't seem to realize the relationship between GAAP financial statements and pro forma financial statements as they are required to be published in SEC disclosure documents. A lot of what you are writing is blatantly false.

Plus, you don't seem to even know what they are. I've asked you what they are and you don't seem to be able to answer.

Like most of what you've written in this thread, you are basically speaking in "word salad" -- the incoherent, random word usage of people living in an alternative reality.

[HamdenRice]

71. Basically, lots of "ignoreds' " heads exploding!

They can't deal with news that contradicts, "the sky is falling," or "let it fail."

By keeping them on ignore, you are missing some really prime, entertaining, emotional meltdowns.

:rofl: :rofl: :rofl:

[TheWatcher]

91. No, it is YOU that cannot deal with anything that contradicts the Propaganda you trot out as FACT.

You are in the game of Perception Management, not Truth.

And quite frankly, you suck at it.

[glitch]

83. Quite a few very rude yaysayers as well. As a maysayer I find the rudeness silly.nt

[Kaleko]

26. My understanding of the article is

that a portion of the bailout money has been paid back with interest today.

To that I say, so far so good.

As for "you folks" and having easy lives... hmmm, yes, I do try to avoid unnecessary complications in my life.

[Hannah Bell]

34. if they'd stuck to "part of the money has been paid back with interest," i'd not have

questioned the article. it's when they start telling me about "profit" with over 100 billion still outstanding i wonder if i missed something.

"you folks" = those calling me "doom-sayer" for asking a legitimate question about the use of the word "profit". if the shoe doesn't fit, don't wear it, & don't pile on new shit.

if certain people didn't go to ad hom every time someone said something they didn't like, discussion would be more rewarding.

[Kaleko]

35. My post was directed to Babylonsister

and my "habitual doom-sayers" was not addressed to you, personally, either.

As you said, "if the shoe doesn't fit, don't wear it."

Take your own advice.

[Hannah Bell]

38. but babylon's post, which you answered, was in response to mine, & mocked mine. so you can

perhaps, understand my confusion.

[babylonsister]

41. Baloney. The OP didn't even mention you. nt

[Hannah Bell]

42. this post isn't a response to mine, & isn't the post kaleko answered?

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=5814290&mesg_id=5815226

how odd. DU's programming must be off.

[Kaleko]

46. Yeah, I can understand that.

We're cool, Hannah. As far as I can see we're working for the same goals and on the same team.

[babylonsister]

19. Ah, the economists! Krugman hated it, we were doomed, and now

we're not. Go figure.

Nobel Winner Krugman Sees U.S. Recession Ending Soon

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=132&topic_id=8458476

[magellan]

53. That's not a fair summation of Krugman's remarks

Not even at the link to the other DU thread. Go to the actual article and we find:

“I’m really quite scared that we could muddle along,” Krugman said in a lecture today at the London School of Economics and Political Science. “I really do see the possibility of a global version of the Japanese ‘lost decade’ without the prospect of an export-led recovery. This could be unpleasant for a very long time.”

And:

“The ‘oh-my-God-the-world-is-ending’” phase of the economic downturn is over, and financial markets are “stabilizing,” Krugman said today. Still, “the employment situation is continuing to look bad and will probably get worse,” he said.

Krugman said he has “no idea” what will power the U.S. out of recession. The U.S. fiscal stimulus package, while not “trivial,” isn’t large enough to fuel sustained growth. Also, with the global economy in the doldrums, the U.S. can’t rely on a revival from a surge in exports, he said.

Even the end of a recession “doesn’t mean the same thing as it did in the old days,” said Krugman, a Princeton University economist. Unemployment may remain high longer than after the end of prior economic contractions, he said.

[wroberts189]

58. also where did the rest go ? ..article refers to $700 billion nt

[HamdenRice]

66. $700 billion was authorized. Only half of it was used, about $350 billion

And now, of the $350 billion that was used, $68 billion is being paid back with interest, at a profit to the government.

[wroberts189]

86. thx... nt

[snot]

10. have many, or any, on DU said we should have done nothing?

[babylonsister]

12. Oops, wrong thread. nt

[Kaleko]

17. Yes.

I've read many anti-bailout posts at the time saying, in effect, let it (the global economy) crash and start fresh.

[girl gone mad]

13. This analysis isn't accurate,

So far, we've lost over $100B in TARP alone. Add in TALF, TLGP, PPIP, etc. and taxpayers will certainly be out hundreds of billions more. These banks are still being subsidized by the government via the FDIC and credit lines from the Fed, only now they can exist unburdened by the already limited oversights that were written into TARP.

Doing nothing is a straw man. Only extremist libertarians ever made that argument. What should have been done was nationalization, forcing the bondholders to take writedowns on their bad gambles, getting rid of corrupt and incompetent management and shoring up the workers instead of bailing out the elites that created this mess. Instead we face mounting job losses, higher tax burdens, a zombie banking system and a weakened middle class all in the name of saving "capitalism".

[StrongBad]

21. We're talking about an annualized return...

...meaning we're just calculating the return since TARP got started. 4% aint a bad return for less than a year.

[babylonsister]

37. Thanks, but according to some here, it's horrible.

It sounded good to me, too.

[Hannah Bell]

43. yes. but not about a profit.

[PBS Poll-435]

45. Loans do not appear on an Operating Income Statement

They belong on the Balance Sheet as Notes Receivable. An asset.

I don't consider that money "lost."

[Hannah Bell]

48. & that is r/t the use of the word "profit" - how?

[PBS Poll-435]

50. Interest/Dividend income does appear on an Income Statement

Debit Cash / Credit Interest Income.

Debit Cash / Credit Notes Receivable.



Income Statement reflects the interest income and the Balance Sheet reflects more cash and less loans on the books.

[Hannah Bell]

52. which is r/t the use of the word "profit" - how?

[PBS Poll-435]

54. Please tell me what r/t means

Routine/Typical ? :shrug:


When the Feds lent JPMorganChase 20B, and JPMorganChase plans to pay the money back plus quarterly preferred dividend payments it has already made, then yes that is called profit.

[Hannah Bell]

56. related to:

i see; the loans to jpmc20b made profit, not the program, which is still in the hole for $100 billion plus.

[PBS Poll-435]

57. A simple accounting misunderstanding

Any bank that sold preferred "class 'D'" stock to the Treasury under TCPP has not missed a single payment. (A missed dividend payment would have indicated insolvency and the FDIC/FED would have swooped in and liquidated that bank.)


TCPP was necessary at the time because it indicated that the United States Government would not let the banks fail and was behind them during the uncertain economy and credit markets.


TCPP will generate, in my opinion, an extra 70-90 billion in the long run for the Federal Government. An important offset from AR&R.

[TheWatcher]

22. SHUT UP OBAMAHATINGTERRORSITPANTS!!!!!

BANKS ARE PROFITABLE AND THEYARE TELLING THE TRUTH AND EVERYTHING IS OK AND EVERYTHING IS FINE AND THE RECESSION WILL BE OVER BY TOMORROW!!!!!!!!!!!!!!!!!!!!!!!!!

Just saving them the trouble.

[PBS Poll-435]

28. I think the banks ARE telling the truth, or at least most of them

The FDIC under the corrupt(IMHO) Sheila Bair will seize your shit and sell it to a friend if there is the slightest hint of something off.

And a graphy for fun.

[Name removed]

29. Deleted sub-thread

Sub-thread removed by moderator. Click here to review the message board rules.

[PBS Poll-435]

25. The Treasury Capital Purchase Program (TCPP) has been wildly successful

First it stablized banking in America and secondly it brought much needed attention to the need to regulate.

[PBS Poll-435]

14. I have said all along that the Gov't is really loving those sweet, sweet dividends

http://journals.democraticunderground.com/prodn2000/23

http://journals.democraticunderground.com/prodn2000/26

[girl gone mad]

16. You can say "I told you so" when the banks pay back all $700B..

and not by funneling money from any of the other Fed handout programs. Until then, we're still out over half a trillion during a time of record unemployment and what we've gotten for our generosity is less lending and higher oil and commodities prices due to speculation led by TARP banks.

[TheWatcher]

23. They can say I told you so when they pay back the 12.5 TRILLION

And stop reporting false "Profits" with Mark-To-Make-Believe" Accounting.

DU is suffering from Stockholm Syndrome tonight.

Desperately clinging to ANYTHING like an infant clings to it's favorite toy, in a maniacal effort to say "I TOLD YOU SO, NAYSAYER."

Frightening.

[PBS Poll-435]

24. Nah. I have always been an optimist.

I follow the boring accounting changes and research bank financial statements.

Everyone with half a brain knew that the "credit crunch" was a leading indicator of recession, not the cause of it.




There are STILL just two banks of the top 20 that are in any way at risk of failing in the next 6 months.

[Name removed]

27. Deleted sub-thread

Sub-thread removed by moderator. Click here to review the message board rules.

[HamdenRice]

70. You are completely confused. You are confusing profits to govt with bank profits.

The OP is saying that the federal government profited on the bailout, not that the banks are all profitable. Seems like a simple distinction that isn't getting through to you.

Also, your $12.5 trillion number is complete baloney.

[TheWatcher]

92. Delete.

You are a complete waste of time.

It is silly to even try to explain anything to an apologist asshat whose line of reasoning is that anyone who questions or does not buy into the Propaganda is somehow a doom-sayer or wants the economy to fail.

What a complete POS.

Just keep believing the lies.

Just like a Good Little Citizen.

[wroberts189]

59. Yes you did ..props. nt

[Rex]

30. So does that mean the taxpayers made some money off the poorest

investment in history?

[TheWatcher]

31. No, it doesn't.

Bus some obviously are DESPERATE for you to believe that, so that they can continue to feel good in their false paradigm.

[PBS Poll-435]

32. Proud to K/R this thread

A couple of really healthy banks were notably absent from the list of 10 today. That doesn't indicate a problem, to me. They will indicate a desire to repay when the time is right.

[asteroid2003QQ47]

44. Horseshit! n/t

[TheWatcher]

47. Now, Now, there will be NO QUESTIONING of the "Official Spin."

Let me see your Papers, Citizen.

[unblock]

60. that's a really facile argument, as it completely ignores potential losses

the first money to be repaid is by nature the least risky. if we somehow knew that 100% of the lent money would be repaid in full, only then could we know that the government would realize a profit.

even then, we couldn't possibly be certain that the profit justified the risk. the government borrows at a rate based on the risk of the government not repaying its debts, a risk generally treated as nonexistent. but it lent the money to banks in crisis, some of them severely so. much greater risk. a profit was needed to justify the risk, and it's not at all clear that a few percent justifies that risk.

not that government actions should necessarily be about making a risk-adjusted profit, but that's the premise of the article.

[HamdenRice]

67. That's a valid point. The bailout was a huge increase in risk to the govt. But ...

it looks like the risk is going to pay off, and the government is going to successfully wind down its highly leveraged position.

I wish more DUers understood, as was pointed out upthread, the bailout was not an expenditure but an investment in assets. That investment was financed by borrowing, meaning that the government took on tremendous risk.

That was the cost of the bailout -- risk, not expenditure.

That the risk has paid off, both in income and in saving the financial system from collapse -- that's the import of the news in the OP.

[unblock]

82. but you learn nothing about the unwinding by looking at the first payments

if 30% of the portfolio is going to go bust, that means that 70% is going to pay. so when that 70% starts to pay, that doesn't mean the loss figure is any more or less than 30% of the original amount. all we have learned is that our total losses will not be 100%.

this is classic cherry picking. we already knew some of the money would be paid off, so we learn nothing when some of it does.

[Junkdrawer]

63. Let's just ignore the $173 Billion to AIG that made it's way to the banks..

Doesn't help the storyline...

[HamdenRice]

68. Any evidence the AIG money went to the banks -- as opposed to insured pension funds?

Just asking, because the idea that AIG money went to the banks seems to be an article of faith around here.

[Junkdrawer]

73. Here's the list...

...

That's because the Wall Street Journal just disclosed the names of the banks who got some $50 billion of the AIG bailout money. And as suspected, Goldman Sachs (NYSE: GS) was among the biggest recipients ($6 billion). This is noteworthy because Goldman got that money from our 74th Treasury Secretary, Hank Paulson, who was a former Goldman CEO and held plenty of its stock. So he was using our money to bail himself out! Here are the others (including 10 European banks):

* Deutsche Bank
* Merrill Lynch
* Société Générale
* Calyon
* Barclays
* Rabobank
* Danske
* HSBC
* Royal Bank of Scotland
* Banco Santander
* Morgan Stanley (NYSE: MS)
* Wachovia
* Bank of America (NYSE: BAC)
* Lloyds Banking Group
...

http://www.bloggingstocks.com/2009/03/07/how-much-of-aigs-173-billion-bailout-went-to-european-banks/

[HamdenRice]

74. And most of them are not TARP banks

That kind of proves my point. There is no correlation between getting AIG insurance money and TARP.

AIG did not make TARP profitable to the Treasury through some kind of back door.

The AIG money went to people who insured their investments with AIG. Moreover, even of those banks that received AIG insurance payouts, it isn't clear whether they received that money on their own behalf or as corporate trustees for other funds, investors or bond issues.

Thanks for the list, because it confirms my view that AIG payouts DID NOT make TARP banks solvent through the back door.

[Junkdrawer]

77. And some of them are...

And it's not over until it's over...

[HamdenRice]

79. Agreed, and that AIG is a complete clusterfuck

but on balance, I think it had to be done. Especially with your list, which shows how much AIG insurance went to foreign banks.

The bailout and stimulus were financed with borrowing by the Treasury of dollars from foreign sources.

If the US Treasury had not paid out on AIG insurance, I'm not sure whether the bailout and stimulus could have been financed at the same time that we would have been stiffing them on insured, dollar denominated debt securities.

[Junkdrawer]

80. Here's the odd thing: Banks are now refusing Geithner's sweetheart deal...

to remove the bad Collateral Backed Obligations from their books - seems that even at 85% of face value, they can't take the hit on their capital reserve requirements.

http://www.nytimes.com/2009/06/04/business/04bank.html?_r=1

Does anyone think that another day of reckoning isn't just around the corner? :shrug:

[JVS]

64. If this is so lucrative why the calls for austerity regarding "entitlements" like Social Security?

[HamdenRice]

69. Wow! Lots of Doomers' and Let It Failers' heads exploding on this thread! Total Emotional Meltdown!

:rofl: :rofl: :rofl:

Dag! Relatively decent news is causing these people to shriek into some kind of psychological breakdown!

[scheming daemons]

75. They are emotionally invested in the entire economy crashing down..... so it can...

ring in a new era of "progressive socialism".


They don't want things to turn around... because it makes it less likely that their world view would be accepted by the masses.


So... just like Rush Limbaugh, they root for failure.... and any good news must be shouted down.

[HamdenRice]

76. Exactly! "Rapture Ready Revolutionaries"!

:silly: :crazy: :silly:

:rofl: :rofl: :rofl:

[PBS Poll-435]

85. Get as much cash out of the ATM as you can

Remember than gem from Sen Burr?



:rofl:

[paulk]

87. in a way, though, he was right -

My equity line of credit got cut off, with the excuse that the houses in my nieghborhood had decreased in value - which was pretty bogus since the equity in my house, even in this depressed real estate market, is still at least double what my line of credit had been. I wish I had pulled 10 or 20k out and stuck it in my checking account - it would have helped get through this last year of little or no work. It, at the least, would have provided a cushion against the day to day stress of worrying about losting my home - something that is still a very real possibility.

That's the real problem, isn't it? Despite all these glad tidings from the banks, credit is still very hard to come by. These banks are not loaning money. Reading about how great these banks are doing - these
banks that are responsible for the crap economy to start with, does little to warm the hearts of those who are still feeling the effects of that crap economy.

[paulk]

81. only $622 billion to go!

:party:

[PBS Poll-435]

84. Your math is wrong

:P