On Jan 16, 11:21*pm, "Hawke" wrote:
"F. George McDuffee" wrote in messagenews:r8k2n4p1q3isooahvke6gjm27aras5lb1g@4ax .com...
On Fri, 16 Jan 2009 20:18:17 -0600, "Libby Loo"
wrote:
snip
Bush claims economy on track to recovery
By TOM RAUM, Associated Press Writer Tom Raum, Associated Press Writer
snip
First define "the economy," and "people." *It may well be under
their definitions this is indeed true.
The 700 billion TARP fund has been more or less expended, and not
a single "toxic asset" has been purchased, except possibly
through the Fed's discount window [which is *NOT* part of TARP,
although still on the taxpayers' dime].
Now there is to be yet another effort to purchase and sequester
these toxic assets with tax payers money.
============
Paulson, Bair Raise 'Aggregator Bank' for Toxic Debt (Update1)
By Rebecca Christie
Jan. 16 (Bloomberg) -- The heads of the U.S. Treasury and Federal
Deposit Insurance Corp. gave further momentum to the idea of a
new government-backed bank to remove toxic assets from lenders'
balance sheets.
----------------
http://www.bloomberg.com/apps/news?p...NKVDnUKMA&refe....
Note that almost all of the companies receiving bailout funds
maintain divisions in low/no tax jurisdictions. *How much tax
evasion is occurring? How much of the rescue money would up in
these secret accounts? No one knows.
=========
Jan 16, 6:28 PM (ET)
By KEN THOMAS
WASHINGTON (AP) - Eighty-three of the nation's 100 largest
corporations, including Citigroup, Bank of America and News Corp.
(NWSA), had subsidiaries in offshore tax havens in 2007, and some
of the companies received federal bailout funding, a government
watchdog said Friday.
The Government Accountability Office released a report that said
Bank of America Inc., Citigroup Inc. (C) and Morgan Stanley (MS)
all had more than 100 units in countries that maintain low or no
taxes. The three financial institutions were included in the $700
billion financial bailout approved by Congress.
Insurance giant American International Group Inc. (AIG), which
has received about $150 billion in bailout money, had 18
subsidiaries. JPMorgan Chase & Co. (JPM) had 50 units and Wells
Fargo & Co. (WFC) had 18; both financial institutions received
government bailout money.
snip
Citigroup had 427 units in 23 countries, including 91
subsidiaries in Luxembourg and 90 in the Cayman Islands. Morgan
Stanley had 273 units, News Corp. had 152 and Bank of America had
115. Procter & Gamble Co. had 83 subsidiaries and Pfizer Inc. had
80 in the jurisdictions.
snip
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http://apnews.myway.com/article/20090116/D95OHIB80.html
The banks are about to be back with tin cup in hand
-----------
Harsh turn of fortunes for 2 huge U.S. banks
By Matthew Saltmarsh and Eric Dash
Published: January 16, 2009
Citigroup capped a devastating 2008 by announcing Friday that it
would split into two entities and that it had posted a $8.29
billion loss for the fourth quarter.
Citigroup's rival, Bank of America, posted a more modest loss of
$1.79 billion during the same period, just hours after receiving
a new infusion of government support that could end up costing
more than $100 billion.
But underlining the depth of the problems that have emerged from
Bank of America's acquisition of Merrill Lynch, Merrill had a net
loss of $15.31 billion, or $9.62 a share, in the fourth quarter,
"driven by severe capital markets dislocations," before the
acquisition was completed, Bank of America said. Merrill's
results for the fourth quarter were not a part of Bank of
America's. The merger of the two banks closed on Jan. 1.
Even as Bank of America was coping with the challenge of
absorbing Merrill, Citigroup was announcing the latest steps in
dismantling its own financial supermarket. Citigroup confirmed
that it would divide, for management purposes, into two separate
businesses - Citicorp and Citi Holdings. Citicorp will focus on
international banking, while Citi Holdings will comprise the
brokerage, asset management and consumer finance businesses.
Citigroup, the umbrella company, will remain intact for now. "We
believe there is a lot of value in having them focused," Vikram
Pandit, the chief executive, said, referring to his plan to split
up Citigroup. "We are not in a rush to sell businesses." Pandit
agreed this past week to split off Smith Barney, Citigroup's
valuable retail brokerage arm, into a joint venture with Morgan
Stanley to raise capital so that it could offset the fourth
quarter's huge losses.
snip
This just goes to show you the devastation that free market capitalism has
brought to the country. How many years have we heard the republicans tell us
that free markets are the path to prosperity? After seeing what the free
market Bush and Co. has brought us you would think that maybe we've finally
learned once and for all the dangers of the free market. We have been doing
the same thing since the 1920s when we had a similar free market free for
all, which started with a great boom and ended with the Great Depression.
Now we have done virtually the same thing again, with republicans, as usual,
leading the way, and have similar results. Maybe the Europeans are right. It
does seem that they do not experience the same extreme boom and bust cycles
that we do. They have stopped allowing completely free markets to do the
extremes they always do in favor of lower growth, more economic equality,
and more governmental control. After all this mess we're in ...again, one
can only wonder if the free marketeers will be able to convince that their
ways are the best for the regular folks. Only time will tell.
Hawke
Our western economic environment is anything but a free capitalistic
market. In fact it is closely controlled to the benefit of the "major
players". A good book on this topic is "The Mystery of Money"
available on line.
If the markets were free all the bankrupt banks would have been
allowed to fail, and tough luck. Small-time depositors with retail
banks were insured by the Federal Deposit Insurance Corporation to the
limit of $100,000.00 per depositor per bank, until recently. If you
had more than a hundred grand simply divide and deposit in multiple
banks.
There is a substantial group of thinkers that believe that this
scenario would have been the best, and the downturn would have been
short but painful, with corrective action being forced onto the
financial industry.
As it stands now none of this corrective action will happen because of
the positive reinforcement received from to bail-outs, which sends
exactly the wrong message. And look what the effect of these bail-
outs are to-date: Completely negative except for the pockets of the
perpetrators/friends of the federal money squanderers.
Another false claim is that ours is a capitalistic system. I see no
evidence of this since practically all businesses use 100% credit, and
50% of the public does so. (observation on my part... the old fly now
pay later thing).
Consider the basics: Capital, which is retained earnings and
savings. Who relies on this today? Certainly not enough. Borrowing,
ie. using other people's money may be clever and profitable for some,
but if "everybody" does it.... you can see the results now.
With the gazillions of $$$ being issued to the major banks a colossal
financial disaster is being foisted on the unsuspecting masses, and
the only reason this hasn't resulted into massive inflation is that
the velocity of money is zero right now ie. banks won't lend because
of fear of default.
But inflation will happen once people start borrowing and buying again
in 2 or 3 years time (my guess) when the old car or TV or whatever
crap out. And banks need to lend eventually to make some income.
This will open the spigot to all that pent-up money driving prices sky-
high. To control this the government will increase interest bringing
everything to a crashing halt.
What we are in for are undamped harmonic oscillations with the
original force being all that coin issued to the banks by the
government. Once the spigot is opened... watch out for the deluge.
Wolfgang