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

[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 compe ive, but the stench attached to the funds strikes at their ins utional 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 ing 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, 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 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 . 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 ins utional 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 ing 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 . They signed up for the program.

We're in agreement that anyone who asked for the money has no right to . 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 baggish 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 ins utional 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 ing 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 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 modi 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 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.

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 cir stances.

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 ?