Obama refuses to take back TARP funds - 'cause it's all about control

[Aggie Hoopsfan]

http://online.wsj.com/article/SB123879833094588163.html


I must be naive. I really thought the administration would welcome the return of bank bailout money. Some $340 million in TARP cash flowed back this week from four small banks in Louisiana, New York, Indiana and California. This isn't much when we routinely talk in trillions, but clearly that money has not been wasted or otherwise sunk down Wall Street's black hole. So why no cheering as the cash comes back?

My answer: The government wants to control the banks, just as it now controls GM and Chrysler, and will surely control the health industry in the not-too-distant future. Keeping them TARP-stuffed is the key to control. And for this intensely political president, mere influence is not enough. The White House wants to tell 'em what to do. Control. Direct. Command.


Under the Bush team a prominent and profitable bank, under threat of a damaging public audit, was forced to accept less than $1 billion of TARP money. The government insisted on buying a new class of preferred stock which gave it a tiny, minority position. The money flowed to the bank. Arguably, back then, the Bush administration was acting for purely economic reasons. It wanted to recapitalize the banks to halt a financial panic.

Fast forward to today, and that same bank is begging to give the money back. The chairman offers to write a check, now, with interest. He's been sitting on the cash for months and has felt the dead hand of government threatening to run his business and dictate pay scales. He sees the writing on the wall and he wants out. But the Obama team says no, since unlike the smaller banks that gave their TARP money back, this bank is far more prominent. The bank has also been threatened with "adverse" consequences if its chairman persists. That's politics talking, not economics.

I can't wait to hear the Obamaniacs and their defense on this one...

[ducks]

refusing to talk the tax payer money back
this article needs to hit cnn and all major talk shows tomorrow

[Viva Las Espuelas]

hmmm. interesting.

[Winehole23]

I can't wait to hear the Obamaniacs and their defense on this one...The narrative that Obama is taking over the financial sector is specious or naive.

The true narrative is oligarchy: to become solvent again, the Fed and the banks must attach the USG and the future prosperity of the USA.

[Aggie Hoopsfan]

The narrative that Obama is taking over the financial sector is specious or naive.

The true narrative is oligarchy: to become solvent again, the Fed and the banks must attach the USG and the future prosperity of the USA.

Yes, that mindset certainly worked out well for Mother Russia back in the day...

[boutons_deux]

"The narrative that Obama is taking over the financial sector is ..."

... conservative/Repug coverup/smokescreen of the insolvency of the the big banks and the conservative/Repug no-regulation/no-enforcement "philosophy" that led directly from the dubya/dickhead years to the financial COLLAPSE of the US and world's financial system.

[Cant_Be_Faded]

They want to give the money back because the government is using it to hold over their heads, and coerce them into acting in a way in which will alleviate the financial crisis and not necessarily benefit the bank itself.

Where is the news here?

Bush gave them money and said have it at folks, Obama is trying to actually use it as a means to an end.

Not that I agree with the methods, but I believe that is the logic behind it.

[BonnerDynasty]

LOL CBF, wake up.

[coyotes_geek]

They want to give the money back because the government is using it to hold over their heads, and coerce them into acting in a way in which will alleviate the financial crisis and not necessarily benefit the bank itself.

Where is the news here?

Bush gave them money and said have it at folks, Obama is trying to actually use it as a means to an end.

Not that I agree with the methods, but I believe that is the logic behind it.

Maybe we can get the government to help out low income families by forcing the banks to give mortgage loans to people who might not be able to pay it back........

[RandomGuy]

The narrative that Obama is taking over the financial sector is specious ...

Has AHF ever made an assertion/argument that wasn't?

Hysteronics is his other middle name....

[RandomGuy]

http://online.wsj.com/article/SB123879833094588163.html


Under the Bush team a prominent and profitable bank, under threat of a damaging public audit, was forced to accept less than $1 billion of TARP money. The government insisted on buying a new class of preferred stock which gave it a tiny, minority position. The money flowed to the bank. Arguably, back then, the Bush administration was acting for purely economic reasons. It wanted to recapitalize the banks to halt a financial panic.

Fast forward to today, and that same bank is begging to give the money back. The chairman offers to write a check, now, with interest. He's been sitting on the cash for months and has felt the dead hand of government threatening to run his business and dictate pay scales. He sees the writing on the wall and he wants out. But the Obama team says no, since unlike the smaller banks that gave their TARP money back, this bank is far more prominent. The bank has also been threatened with "adverse" consequences if its chairman persists. That's politics talking, not economics.

I can't wait to hear the Obamaniacs and their defense on this one...

It depends entirely on the circumstances.

I have a distinct feeling that the op-ed piece you cite has left out some information relevant to making a fair judgment in this case.

When you and other conservatives jump up and down about Obama giving the Queen an iPod, and how silly/trite that is, then it suddenly comes out that was exactly what she requested, and that the conservadrones were, once again, talking out their asses, it does not fill me with a sense that you will tell me the whole truth when it comes to anything.

Specifically missing data:
What is the exact financial condition of the bank?

If the bank really isn't that solvent, then the adminstration shouldn't take back the capital.

Given that hyterical oligarchs might want to limit their ability to suck the life out of the companies they run, and that they have so far obviously placed their paychecks above the good of the company:

How do you know that they are actually acting in the best interest of the bank itself, or the best interest of their paychecks?

This thread, like all of your others, is a posterchild of FAIL.

[coyotes_geek]

The financial condition of the bank is irrelevant. If they think they're better off without the government as a business partner then they have every right to tell the government to butt out. It's a free country afterall. Or at least that's what it's supposed to be.

[Crookshanks]

then it suddenly comes out that was exactly what she requested
Do you honestly believe the Queen of England had her staff give the Obama Staff her "visiting Head of State gift-giving" list? This little "fact" was reported by the same adoring, slobbering media who have given Obama a complete pass for the past two years!

[hope4dopes]

Has AHF ever made an assertion/argument that wasn't?

Hysteronics is his other middle name....

Speaking of names .... are you really winehole23 under a different name or do you and he just go to the same obama circle jerk on the weekends.

[ChumpDumper]

Do you honestly believe the Queen of England had her staff give the Obama Staff her "visiting Head of State gift-giving" list? This little "fact" was reported by the same adoring, slobbering media who have given Obama a complete pass for the past two years!
From the April 1 edition of Fox News' Special Report with Bret Baier:

BRET BAIER (host): Major, my wife tells me I'm not the best gift giver, but after President Obama gave Prime Minister Brown the set of DVDs that didn't work in Great Britain, we hear that he gave the queen an iPod?

MAJOR GARRETT (Fox News senior White House correspondent): Yes, a video iPod, which we are told by White House staff the queen requested. She has an audio iPod, but not a video iPod.

What's on it? A video of her 2007 trip to the United States -- meaning Washington, D.C., and Virginia. Plus, also, on the audio side of that iPod, composer Richard Rogers, some of his famous American hits. And it's signed. And we're told it went over pretty well with the queen. Bret.

BAIER: OK. I'll add it to my list. Major, thanks.

http://mediamatters.org/items/200904020002

[hope4dopes]

From the April 1 edition of Fox News' Special Report with Bret Baier:

BRET BAIER (host): Major, my wife tells me I'm not the best gift giver, but after President Obama gave Prime Minister Brown the set of DVDs that didn't work in Great Britain, we hear that he gave the queen an iPod?

MAJOR GARRETT (Fox News senior White House correspondent): Yes, a video iPod, which we are told by White House staff the queen requested. She has an audio iPod, but not a video iPod.

What's on it? A video of her 2007 trip to the United States -- meaning Washington, D.C., and Virginia. Plus, also, on the audio side of that iPod, composer Richard Rogers, some of his famous American hits. And it's signed. And we're told it went over pretty well with the queen. Bret.

BAIER: OK. I'll add it to my list. Major, thanks.

http://mediamatters.org/items/200904020002

another of ther many resons I don't hobnob with facists, they're lousy gift givers.

[ChumpDumper]

another of ther many resons I don't hobnob with facists, they're lousy gift givers.You don't like getting what you ask for and then some?

You're an idiot.

[hope4dopes]

You don't like getting what you ask for and then some?

You're an idiot.
The other reason I avoid facists is their raiper like wit

[ChumpDumper]

Maybe if you keep typing it, you'll spell it right someday.

As it is, you are railing against people who are in favor of having a face.

[hope4dopes]

Maybe if you keep typing it, you'll spell it right someday.

As it is, you are railing against people who are in favor of having a face.

yeah...yeah that makes alot of sense.

[ChumpDumper]

Why do you hate faces?

[Aggie Hoopsfan]

Has AHF ever made an assertion/argument that wasn't?

Hysteronics is his other middle name....

Cute reply... typical for you as well. Have you ever done anything other than call anyone who criticizes Obama names since he got elected?

Quit being such a douche and say whether or not you agree with the original story.

[Aggie Hoopsfan]

It depends entirely on the circumstances.

I have a distinct feeling that the op-ed piece you cite has left out some information relevant to making a fair judgment in this case.

When you and other conservatives jump up and down about Obama giving the Queen an iPod, and how silly/trite that is, then it suddenly comes out that was exactly what she requested, and that the conservadrones were, once again, talking out their asses, it does not fill me with a sense that you will tell me the whole truth when it comes to anything.

Specifically missing data:
What is the exact financial condition of the bank?

If the bank really isn't that solvent, then the adminstration shouldn't take back the capital.

Given that hyterical oligarchs might want to limit their ability to suck the life out of the companies they run, and that they have so far obviously placed their paychecks above the good of the company:

How do you know that they are actually acting in the best interest of the bank itself, or the best interest of their paychecks?

This thread, like all of your others, is a posterchild of FAIL.


I could give a shit about the Queen getting an iPod and what was on it.

I have a problem when banks, in some cases, had TARP money crammed down their throats, and now are being told they can't pay it back, and if they keep trying there will be repercussions.

Last time I checked this was still a free market - if the banks don't want to take TARP funds and want to go it on their own, they should be allowed to.

[Marcus Bryant]

How long is this "bailout" going to last?

[Winehole23]

I have a distinct feeling that the op-ed piece you cite has left out some information relevant to making a fair judgment in this case. You may be right but you did not show your work. Forgiven in advance for having a real life, but that's lazy.


Specifically missing data:
What is the exact financial condition of the bank?I'd not be surprised if the banks were in good condition when initially encouraged to apply for TARP funds. The thinking then was, to prevent TARP funds from conferring the stench of failure upon their recipients, healthy institutions were *strongly encouraged* to participate.


If the bank really isn't that solvent, then the adminstration shouldn't take back the capital.This may be counterfactual, but I tend to agree. If *insolvent* institutions have already supped at the public trough, why set them at liberty to repeat the experiment?


Given that hyterical oligarchs might want to limit their ability to suck the life out of the companies they run, and that they have so far obviously placed their paychecks above the good of the company:It's the companies you've got to watch out for IMO. Hysterical bosses come and go...

4aecHdkYHfA


The financial condition of the bank is irrelevant.Irrelevant? Hmm. I wonder. Perhaps our by now habitual lack of transparency in one area of finance has rendered you insensitive to the very basic matter of solvency. Surely you don't think we should set insolvent banks at liberty, if we can discover their true financial state (and receivership does not pose any systemic risk)?

Besides, isn't the FDIC is supposed to shut banks down well before their condition poses any substantial risk to US taxpayers? The S&L experience taught us that much, right?

[Marcus Bryant]

Anyways, the administration isn't that well organized, as it stands, to engage in some such conspiracy.

When will the next bubble burst? I'm feeling 2014 myself.

[Winehole23]

They want to give the money back because the government is using it to hold over their heads, and coerce them into acting in a way in which will alleviate the financial crisis and not necessarily benefit the bank itself.Funding from the government of national salvation does not inspire confidence. On the whole, the banks need the funds to stay competitive, but the stench attached to the funds strikes at their institutional credibility.

To be a TARP recipient means you're either a deadbeat or a greedy creep. Not to be one is to be left out in the cold, while the creeps and criminals who drained our economy are patiently nursed back to health on the public dime.

Geithner has shown no interest in in receivership so far, much less direct control. If our government has any sway over the banks at all they better fucking use it or the banks will eat us alive. I hate that we own so much of their risk, but control so little of it.

As for the banks who got cold feet after taking the money they applied for, they need to hang tight for the *stress test*, and prove their solvency. If they can then great, let em return the loot with interest and be on their way.

Otherwise, fuck em.

[Winehole23]

Yes, that mindset certainly worked out well for Mother Russia back in the day...French and German financiers may have sent Lenin to Russia, but they didn't get to be in charge of the USSR later on. Big difference.

[Winehole23]

Speaking of names .... are you really winehole23 under a different name or do you and he just go to the same obama circle jerk on the weekends.If you can't tell the difference you may be lacking sensitivity in your reading, just as you do in your imagination.

RG will speak for himself. You OTOH, should learn to type with both hands.

You might cut down on misspellings.

[Winehole23]

How long is this "bailout" going to last?I think the RTC took [six years, ed.] to wind everything up; this is how many orders of magnitude bigger? Three? Four? It's tens of trillions of dollars(15?) so far, right?

Decades, I would guess.

[Winehole23]

.When will the next bubble burst? I'm feeling 2014 myself.The T-bubble? Why 2014?

Vibes?

Pulled it from a hat?

[RandomGuy]

Cute reply... typical for you as well. Have you ever done anything other than call anyone who criticizes Obama names since he got elected?

Quit being such a douche and say whether or not you agree with the original story.

I have, in this forum, criticized Obama on occasion when he has done things that I disagree with.

As for the original opinion piece:

I don't know enough about the specifics to really say one way or another.

Unlike your dumb ass, I don't rush in and wave my hands in a hysterical fit of outrage when told to do so by opinion peices.

I prefer to do the liberal thing, and actually get enough information before I really decide on a topic.

Give me some more detail and I would be happy to render a decision.

[coyotes_geek]

Irrelevant? Hmm. I wonder. Perhaps our by now habitual lack of transparency in one area of finance has rendered you insensitive to the very basic matter of solvency. Surely you don't think we should set insolvent banks at liberty, if we can discover their true financial state (and receivership does not pose any systemic risk)?

Besides, isn't the FDIC is supposed to shut banks down well before their condition poses any substantial risk to US taxpayers? The S&L experience taught us that much, right?

Perhaps this whole TARP/FDIC stuff has gotten over my head, but as I understand it the whole point of TARP was to keep the FDIC from having to step in and close down banks. As long as that FDIC backstop is there to protect the taxpayers, which is there whether banks take TARP money or not, then why can't we let the banks decide for themselves whether or not they need TARP money? Banks don't want to be insolvent. If they feel they need the help, I don't see why they wouldn't ask for it.

If the point to all this is to rebuild strength within the financial sector, then shouldn't we be encouraging banks to make it on their own? Certainly no one can argue that a bank that is capable of surviving on it's own is stronger than one dependent on the government. Personally, I still believe that no matter how poorly bankers made decisions over the past decade, and lord knows they made some doozies, they still know more about running a successful banking business than the government does.

Part of the reason why we're in this mess is because the government wanted to have a say in how and to whom banks loan money to. Why should I trust the same group of politicians who failed to reign in Fannie and Freddie to exercise their influence over banks they decide they want to take over in a manner consistent with rebuilding a strong financial sector as opposed to some political goal? The only people we should trust less than the bankers are the politicians.

[Winehole23]

If they feel they need the help, I don't see why they wouldn't ask for it. Thing is, the complaining banks had to apply for the money. They applied for and accepted it. It's too late to bitch. They signed up for the program.


If the point to all this is to rebuild strength within the financial sector, then shouldn't we be encouraging banks to make it on their own?You're preachin to the choir, CG.

There needs to be a sector-wide financial audit. Can we get a little discovery, please? Find out which banks are doing ok, which can get by with a little help, and which need to be dragged out into the woods and shot.


Personally, I still believe that no matter how poorly bankers made decisions over the past decade, and lord knows they made some doozies, they still know more about running a successful banking business than the government does.For all we know, the banks have been loading up on derivatives ever since last September. Shouldn't we put a stop to the ongoing shenanigans, and make the banks open their books?


Part of the reason why we're in this mess is because the government wanted to have a say in how and to whom banks loan money to. Why should I trust the same group of politicians who failed to reign in Fannie and Freddie to exercise their influence over banks they decide they want to take over in a manner consistent with rebuilding a strong financial sector as opposed to some political goal? The only people we should trust less than the bankers are the politicians.The influence runs in the other direction IMO.

Political misallocation of capital leading to malinvestment is an unfortunate side-effect of the cure in addition to being the triggering event of the underlying illness. If there were any humor in it I'd say that's ironic, but it just sucks.

IMO Geithner's actions so far suggest that Geithner will put off receivership as long as possible and leave the bankers in charge. This is the general institutional drift of the TARP anyway, as you pointed out upstream. The day of transparency must either be postponed as long as possible, or become an official secret.

It all comes down to whether you want the government to manage the risk it already owns, or watch the trainwreck on the sidelines with us. I want them to manage the fucking risk.

[coyotes_geek]

Thing is, the complaining banks had to apply for the money. They applied for and accepted it. It's too late to bitch. They signed up for the program.

We're in agreement that anyone who asked for the money has no right to bitch. But not every bank who got the money asked for it. Paulson strong-armed some banks who didn't want the money into taking the money, and now Geitner's going to do the same thing with his "stress test".

It's pretty douchebaggish of the government to tell a bank "we decided on our own that you need help, so you're taking our money whether you like it or not" and then follow that up with "since you took our money we get to tell you how to do things". Don't force government "help" on someone who doesn't want it.


You're preachin to the choir, CG.

There needs to be a sector-wide financial audit. Can we get a little discovery, please? Find out which banks are doing ok, and which need to be dragged out in the woods and shot.

For all we know, the banks have been loading up on derivatives ever since last September. Shouldn't we put a stop to the ongoing shenanigans, and make the banks open their books?

The influence runs in the other direction IMO.

Political misallocation of capital leading to malinvestment is an unfortunate side-effect of the cure in addition to being the triggering event of the underlying illness. If there were any humor in it I'd say it's ironic, but it just sucks.

IMO Geithner's actions so far suggest that Geithner will put off receivership as long as possible and leave the bankers in charge. This is the general institutional drift of the TARP anyway, as you pointed out upstream. The day of transparency must either be postponed as long as possible, or become an official secret.

It all comes down to whether you want the government to manage the risk it already owns, or watch the trainwreck on the sidelines with us. I want them to manage the fucking risk.

I'm okay with government changing the rules the banks need to play by. I just don't want the government making the rules and then telling the banks how to operate within those rules. To borrow a football analogy, let the league make new rules to protect the quarterback, but don't follow that up by having the league tell the coach what plays he has to run. If government would just do something about the derivatives, tighten the belt on how leveraged we're going to let banks get, enact stricter lending standards, float loans to banks that ask for help and butt the hell out of everything else we'll come out of this okay.

[Winehole23]

Paulson strong-armed some banks who didn't want the money into taking the money, and now Geitner's going to do the same thing with his "stress test". Yep. But compared to an RTC-style audit, Geithner's *stress test* is just a little peek. I hope we can get by on the modicum of sector transparency it will provide.

[Winehole23]

If government would just do something about the derivatives, tighten the belt on how leveraged we're going to let banks get, enact stricter lending standards, float loans to banks that ask for help and butt the hell out of everything else we'll come out of this okay.Even CG concedes there is an appropriate role for government here.

[Winehole23]

Anyways, the administration isn't that well organized, as it stands, to engage in some such conspiracy.Agree wholeheartedly, but this is part of what makes the public-private scheme to resuscitate *legacy assets* so attractive to bank receivers, banks and hedge funds, besides the subsidized risk.

The wolves get back in the buffet line; once again we (US taxpayers) are the buffet.

[Marcus Bryant]

Agree wholeheartedly, but this is part of what makes the public-private scheme to resuscitate *legacy assets* so attractive to bank receivers, banks and hedge funds, besides the subsidized risk.

The wolves get back in the buffet line; once again we (US taxpayers) are the buffet.

Of course. The problem is, when most think of government intervention in the economy, knowledge and expertise thereof is assumed.

[Winehole23]

The FDIC has some recent practice on failed banks, and the RTC remains in the historical frame, though the problem we face now is orders of magnitude larger.

We already own AIG's risk. We ought already have started to manage it. Is leaving it all in AIG's hands really a better idea?

The cynical assumption that our government is incapable of managing problems promotes passivity in the face of epochal financial predation. I'd rather see an official attempt to manage the problem than hands stuffed in pockets.

[George Gervin's Afro]

http://online.wsj.com/article/SB123879833094588163.html





I can't wait to hear the Obamaniacs and their defense on this one...

I have a feeling there is another side to this story.

[SpuronyourFace]

Obama administration will allow these companies to pay back the government not in cash, but in the form of common stock.

Seems to me the government wants to nationalize the banking system here in the U.S....a failed method tried in Europe.

[Winehole23]

It worked in Sweden. If you don't want the government to own you, don't apply for the money; if you have to, you deserve to have your ass owned and reorganized by the USG.

[Winehole23]

The taxpayer should receive something of tangible value in exchange for saving the banks asses, and prosper in any possible upside.

Fuck the shareholders. If the firms are insolvent, they failed in either oversight or prudence and deserve to get wiped out.

[SpuronyourFace]

It worked in Sweden. If you don't want the government to own you, don't apply for the money; if you have to, you deserve to have your ass owned and reorganized by the USG.

Thats Sweden. We are America. Two entirely different animals with different variables.

What? Are you for socialism like there is in Sweden?

[Winehole23]

What? Are you for socialism like there is in Sweden?Not by a long shot.

But we could learn something from the experience. In Sweden, the banks returned to profitability within two years, and the government came out ahead when it cashed the equity warrants.

The warrants were also a powerful incentive for sound banks to stay off the dole.

[Winehole23]

BTW, all of the banks bailed out in Sweden were eventually re-privatized. If the euro-commies can re-privatize, maybe there's hope for us after all.

We did so after the S&L bailout, and we will again.

[Aggie Hoopsfan]

It worked in Sweden. If you don't want the government to own you, don't apply for the money; if you have to, you deserve to have your ass owned and reorganized by the USG.

The irony is people think Obama actually cares about the taxpayer. He's hooking up his banking buddies on Wall Street, and he and Geithner are setting it up so they take all the profits while the American taxpayer takes all the losses.

Hope and *change*....

[Winehole23]

The irony is people think Obama actually cares about the taxpayer. He's hooking up his banking buddies on Wall Street, and he and Geithner are setting it up so they take all the profits while the American taxpayer takes all the losses. I doubt Obama or Geithner will be directly enriched, but I can hardly argue with you that the taxpayer is the mark at the table.

Equity warrants in the PPIF's also assure taxpayers will share in any possible upside. The taxpayer will take the lion's share of the losses and a slice of the profits.

FTR, I don't think anybody represents fiscal conservatives at the national level anymore. We're more or less in agreement there, and also about the banks getting hooked up.

You could say I agree with your exactly half your post, AHF. That's a somewhat higher ratio than usual.

[implacable44]

It depends entirely on the circumstances.

I have a distinct feeling that the op-ed piece you cite has left out some information relevant to making a fair judgment in this case.

When you and other conservatives jump up and down about Obama giving the Queen an iPod, and how silly/trite that is, then it suddenly comes out that was exactly what she requested, and that the conservadrones were, once again, talking out their asses, it does not fill me with a sense that you will tell me the whole truth when it comes to anything.

Specifically missing data:
What is the exact financial condition of the bank?

If the bank really isn't that solvent, then the adminstration shouldn't take back the capital.

Given that hyterical oligarchs might want to limit their ability to suck the life out of the companies they run, and that they have so far obviously placed their paychecks above the good of the company:

How do you know that they are actually acting in the best interest of the bank itself, or the best interest of their paychecks?

This thread, like all of your others, is a posterchild of FAIL.

did they also ask for Obama to return the bust of Winston Churchill ?

[Marcus Bryant]

BTW, all of the banks bailed out in Sweden were eventually re-privatized. If the euro-commies can re-privatize, maybe there's hope for us after all.

We did so after the S&L bailout, and we will again.


Who will step up and end the asymmetrical approach to monetary policy demonstrated by the central bank?

[Winehole23]

Who will step up and end the asymmetrical approach to monetary policy demonstrated by the central bank?http://www.safehaven.com/article-8396.htm

[Marcus Bryant]

http://www.safehaven.com/article-8396.htm

FTA: "This asymmetric policy prescription is a recipe for serial asset-price bubbles."

MB: Yep.

[sook]

all hail lord barack