Why Treasury Secretary Geithner Is the Most Dangerous Man in America

There are a couple of passages from the article below that terrifies me.  One, taxpayers will be forced along with other private money to buy assets that nobody wants and to hold indefinitely without any indicators that these “sour assets” will ever yield a return on investment.  Second, the idea that banks are unwilling to sell troubled assets at a loss therefore implying that the government should buy these properties at inflated values.  Let’s keep in mind taxpayers have lost $78 billion already in Paulson’s first round of TARP money issued to banks and nothing has been changed with regards to better regulation in the banking, mortgage and lending industry.

No matter how Geithner is going to spin his plan, it reads to me that trillions of dollars of taxpayers’ money is about to go out the door and pay bankers and its shareholders for bad decisions and take these “sour assets” off their hands.  This is worse than any bank bonuses paid in 2008.

Source:  NY Times

February 10, 2009

Geithner Said to Have Prevailed on the Bailout

By STEPHEN LABATON and EDMUND L. ANDREWS

“…It intends to call for the creation of a joint Treasury and Federal Reserve program, at an initial cost of $250 billion to $500 billion, to encourage investors to acquire soured mortgage-related assets from banks…”

There is no market value for most of those troubled assets because they are not trading. Investors want to buy them at the lowest price possible, but banks want to avoid selling them at rock-bottom prices and realizing huge losses.

The impasse is particularly serious for whole mortgages, which are loans that banks have kept on their own books instead of selling them to Wall Street firms, which bundle them into pools and resell them as mortgage-backed securities.

SEC Enforcement Chief Linda Thomsen Resigns

Is this how it works in Washington DC’s government regulatory agencies?  Does this mean working in government one doesn’t really have a boss checking on the quality of work?  So a person with questionable job performance at a government agency just gets a public tar and feather session before members of Congress and in their indignation, they resign?  If the American people are going to wait until the you know what hits the fan, who’s to prevent Madoff Jr. from ripping off working Americans $50 trillion dollars the next time and the only satisfaction for potential victims would be a in-dignified resignation?

Write to the White House and Congress urging further reform and tell them Americans will not tolerate second rate government.

Full Story:  http://finance.yahoo.com/news/SEC-enforcement-chief-Linda-apf-14298545.html

Congressional Budget Office (CBO) Can’t Predict the Direction of Sunsets

Here’s the whole article and not just excerpts that the Congressional Budget Office (CBO) claims that they predict recession will end in 2009.

There are major assumptions they are making about public vs. private capital in both the near and long run.

But then again, the very same CBO that advised Congress on the condition of the economy was showing signs of stress but fundamentally sound in 2008 was clearly wrong (page 13, paragraph 2 in this linked PDF also from the CBO office published in the beginning of 2008).

Then some other government agency advised Congress that the US is in a recession since December of 2007 but only realize that in December of 2008.  A whole year late!

Real geniuses in Washington the GOP ignored previously.  Suddenly with Obama in the White House and Democrats the majority, Republicans are now clinging onto these previously ignored governmental advisory agencies every printed word.

Bush’s Hank Paulson 3 Page Memo for $700 Billion TARP vs Congress 778 pages and $827 Billion Stimulus

At least it’s cheaper per page and we know the money will go to more people versus just a handful of financial institutions.

And what’s with the page number theatrics again?  Are the Republicans unable to read lengthy documents?  Do Republicans want the 3 page memo from Hank Paulson ?

Further, it’s interesting that when Republicans controlled both the House of Representatives and Senate to pass spending and legislation between 1995 and 2006, no one said a peep about regulation or the national debt which grew from $4.7 trillion to $8.7 trillion.  In addition, during the last 3 Republican White House administrations (Reagan, G HW Bush, G W Bush), the national debt always increased.

When former President GW Bush handed the keys to President Obama, he was also giving him nearly $11 trillion of US National Debt. (Look up Jan 20, 2009 – day of Inauguration)

Now that the Republicans are the minority fighting to keep their jobs, they are suddenly so concerned about spending these days when they themselves are history’s big spenders (see previous link).  The Obama administration is trying to save the economy which based on every statistic is in a major recession with the distinct possibility of going into a depression.  All I hear is Republicans making the same old pitch that didn’t work for years and decades.

Brain washed propaganda or ignorant of facts, blind to the truth and reality?  Either is bad for America.  Time for an attempt to move in another direction.

Stimulus Bill Gets Liposuction

But the question still remains, will the stimulus bill reverse the flow of our economy and put Americans into gainful jobs?

Source:  CNN

(CNN) — A coalition of Democrats and some Republicans reached a compromise that trimmed billions in spending from an earlier version of the Senate economic stimulus bill.

CNN obtained, from a Democratic leadership aide, a list of some programs that have been cut, either entirely or partially:

Partially cut:

• $3.5 billion for energy-efficient federal buildings (original bill $7 billion)

• $75 million from Smithsonian (original bill $150 million)

• $200 million from Environmental Protection Agency Superfund (original bill $800 million)

• $100 million from National Oceanic and Atmospheric Administration (original bill $427 million)

• $100 million from law enforcement wireless (original bill $200 million)

• $300 million from federal fleet of hybrid vehicles (original bill $600 million)

• $100 million from FBI construction (original bill $400 million)

Fully eliminated

• $55 million for historic preservation

• $122 million for Coast Guard polar icebreaker/cutters

• $100 million for Farm Service Agency modernization

• $50 million for Cooperative State Research, Education and Extension Service

• $65 million for watershed rehabilitation

• $100 million for distance learning

• $98 million for school nutrition

• $50 million for aquaculture

• $2 billion for broadband

• $100 million for National Institute of Standards and Technology

• $50 million for detention trustee

• $25 million for Marshalls Construction

• $300 million for federal prisons

• $300 million for BYRNE Formula grant program

• $140 million for BYRNE Competitive grant program

• $10 million state and local law enforcement

• $50 million for NASA

• $50 million for aeronautics

• $50 million for exploration

• $50 million for Cross Agency Support

• $200 million for National Science Foundation

• $100 million for science

• $1 billion for Energy Loan Guarantees

• $4.5 billion for General Services Administration

• $89 million General Services Administration operations

• $50 million fromDepartment of Homeland Security

• $200 million Transportation Security Administration

• $122 million for Coast Guard Cutters, modifies use

• $25 million for Fish and Wildlife

• $55 million for historic preservation

• $20 million for working capital fund

• $165 million for Forest Service capital improvement

• $90 million for State and Private Wildlife Fire Management

• $1 billion for Head Start/Early Start

• $5.8 billion for Health Prevention Activity

• $2 billion for Health Information Technology Grants

• $600 million for Title I (No Child Left Behind)

• $16 billion for school construction

• $3.5 billion for higher education construction

• $1.25 billion for project based rental

• $2.25 billion for Neighborhood Stabilization

• $1.2 billion for retrofitting Project 8 housing

• $40 billion for state fiscal stabilization (includes $7.5 billion of state incentive grants)