350 Is The Upper Limit "If humanity wishes to preserve a planet similar to that on which civilization developed and to which life on earth is adapted... CO2 will need to be reduced from its current 385 ppm to at most 350 ppm." Jim Hansen, NASA
It may not be a popular view, but I stand by it: If these asshats ran their firms into the dirt, we should hand them shovels to dig their graves, not cash. They were trading below $4 and the bailout ‘buys’ shares at more than $10. Who else but the Goldman Sachs-run US Treasury would do this? Would YOU pay more than twice the going rate? You say ‘no, of course not’, but your taxes pay for these bailouts. The Fed and the Treasury pays it for you.
Image via WikipediaCiti Bailout - US Govt Screws US Again
Once again, the US Government has screwed us all with another undeserved bailout of a financial behemoth. Citigroup, whose exposure to subprime mortgages and their derivatives caused a more than 87% drop in ‘value’ this year, has been bailed out with not just a cash infusion, but substantial guarantees against future losses.
Longtime readers will recall that I’ve published pieces on Citi already twice this year. First, I reported on their choice of using known spam outfits to deliver official emails from the company, opening up their customers to more spam, as well as having their emails blocked by most spam filters.
Then in September I reported on their exposures to several types of risk, most notably in the subprime and derivatives markets, which made them particularly susceptible to failure. At that time, their share’s prices had declined only around 60% through the year. The conclusion of that piece was that Citi was indeed a risk to any and all who held their paper.
The Trick Is To Try To Swallow It
Of course, both of those were published BEFORE the Treasury Department rammed the $700 billion bailout down our throats. Had I known then that the Goldman Sachs alumni who are in control of our economy would be so eager to leverage the Fed up to 50%, higher even than any of the ‘Not Quite Big Enough To Save’ firms that have since disappeared (think Lehman Brothers, et al), then my conclusion would have been a bit different.
As long as our Goldman government is allowed to just create cash, adding to the already back-breaking burden of future taxes, companies like Citi will continue to survive and even to flourish.
The sweeping plan is geared to stemming a crisis of confidence in the company, whose stock has been hammered in the past week on worries about its financial health.
“With these transactions, the U.S. government is taking the actions necessary to strengthen the financial system and protect U.S. taxpayers and the U.S. economy,” the three agencies said in a statement issued late Sunday night. “We will continue to use all of our resources to preserve the strength of our banking institutions, and promote the process of repair and recovery and to manage risks.”
…
The Citigroup rescue came after a weekend of marathon discussions led by Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke. Timothy Geithner, president of the Federal Reserve Bank of New York, who is being tapped by President-elect Barack Obama as his Treasury chief also participated.
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The $20 billion cash injection by the Treasury Department will come from the $700 billion financial bailout package. The capital infusion follows an earlier one - of $25 billion - in Citigroup in which the government received an ownership stake.
As part of the plan, Treasury and the FDIC will guarantee against the “possibility of unusually large losses” on up to $306 billion of risky loans and securities backed by commercial and residential mortgages.
Under the loss-sharing arrangement, Citigroup Inc. will assume the first $29 billion in losses on the risky pool of assets. Beyond that amount, the government would absorb 90 percent of the remaining losses, and Citigroup 10 percent. Money from the $700 billion bailout and funds from the FDIC would cover the government’s portion of potential losses. The Federal Reserve would finance the remaining assets with a loan to Citigroup.
Note the names in BOLD up there. Each of them have close connections to Goldman Sachs. Some of you might be surprised to see Obama’s name listed. After all, isn’t he ‘change we can believe in’? You may be surprised to learn that he recieved nearly a million dollars from Goldman Sachs in support of his campaign for president. They were, in fact, the second largest contributor to his campaign.
But don’t feel bad. The whole world believed the earth was the center of the universe for thousands of years.
The Slaves Rise Up… And Say Hoo-ray!
So, in other words, we ( yes, you and me) will have not only given Citi $45 billion in cash, we (right again, you and me!) are on the hook for up to $275 billion of almost certain losses due to their bad paper. Add it up: it means they’ve got up to $310 billion out of US, thanks to our Goldman Sachs controlled government.
America. Earth. Have you guys been paying attention? Is it starting to become obvious to you yet? Don’t you see what is happening right in front of your nose? You and your children and their children and theirs will not pay enough taxes to generate this kind of cash.
We are being sold into slavery, and as a species, we seem to be applauding.
Image by afagen via FlickrThe Fed Will Say Probably Say A-OK
This is a super short post folks. I just wanted to remind everybody that in 2006, the peak year for Subprime Derivatives, GMAC was among the top 6 companies producing these toxic securities. Of those 6 companies, only 2 are still in business: GMAC and Goldman Sachs. All the others have failed. If the request is denied, GMAC will certainly join the deadpool (which is definitely where they belong). Golman Sachs, you will recall, is where we got Hank Paulson and Neil Kashkari, among others.
GMAC is one of the biggest reasons that Detroit is in such lousy fiscal shape. My opinion is that they should NOT be allowed to become a bank holding company. Becoming a bank holding company will allow them to borrow money directly from the Fed. That way, they will get their bailout, one way or the other, at OUR EXPENSE. Remember, money borrowed from the Fed is generated through our taxes.
Nevertheless, the Fed will probably allow their request to be approved. More ripoffs of the US taxpayer, brought to you by our friends at the Fed and the US Treasury. Why are we allowing the people who created this mess to control how we respond to it? Why are we just rolling over for the rich?
I am Jon, and I am really getting tired of bailing out the fat-cats.
The entire reason we are in this mess is because banks and other institutions have been lying about their exposure, capital levels and valuations, and we the people have allowed it to go on for more than a decade.
As noted previously both Wachovia and National City were sold for about 1/3rd of their claimed balance sheet value just days before the sale.
Trillions of dollars off-balance-sheet?
Can anyone spell ENRON?
How many times do you need to be sheared, American Sheep? How many times do corporations get to intentionally hide so-called “assets” (making it impossible for investors, including you, to value the firm accurately) which turn out to be worth far less than they claim, before we start locking up executives en-masse and ejecting so-called “regulators” who are instead schmoozing the executives of the firms they’re supposed to be regulating?
It appears the answer is “at least one more time”, even though we had clear and unmistakable warning when ENRON blew up.
Will we ever learn?
…
Despite the fact that its supposed to be illegal to lie about valuations and other matters financial in our capital markets, neither you or any other Senator or Representative has (or will) place these executives and officials in the dock and demand they cough up all the supporting documentation to back their public statements (remember Bear Stearns and Lehman claiming they were “fine” just days before blowing up?) nor will you go after the people who caused those explosions, especially if they’re politically connected (gee, you don’t think that the NY Fed might have engineered Bear’s - and maybe Lehman’s - failure, do you?)
The documentation necessary to prove (or disprove) this will not be demanded and put into the public view, despite the fact that the entirety of The Federal Reserve System (and all its member banks) are in fact drawing upon and tampering with our funds, in that Federal Reserve Notes are in fact debt instruments drawn upon the government’s future ability to tax its citizens.
Damn My Hippie Generation!
Folks, haven’t you had enough of this crap yet?
Isn’t it becoming painfully obvious to you that your government is and has been lying to you all along, just so that their buddies in the corporate world can continue stealing you blind?
If you haven’t seen this yet for what it really is, STOP TAKING THOSE DAMNED DRUGS! And it’s not just the prozac and xanax I’m talking about.
Stop watching FOX. Stop watching CNN. Stop watching MSNBC. For the first time in years, I watched those guys today, just to see what brand of kool-aid America has been drinking. I was amazed.
Gone is any attempt at professionalism. All that I found was a clever (and I don’t mean that in the superlative way) concerted attempt, across all the networks, at OBVIOUS ATTEMPTS AT DISINFORMATION. Cleverly disguised as info-tainment. These guys are consummate performers. But honest? Don’t count on it.
So, what are you to do? You think it’s better to have some information, even if it’s unreliable? Would you stake your future on that? Or the future of your family?
STOP WATCHING THOSE ASSHATS! Start digging on the internet. Look through the CSPAN archives. Search intently for the ’source documents’ which will tell you what is really going on.
Do you really need those unprofessional jerks at ‘Morning Joe’ to filter your news and information? Does that idiot biatch on CNN know more than you? Hint: SHE’S READING FROM A TELE-PROMPTER!
All those fools are nothing more than PARROTS, SAYING WHAT THEY’RE TOLD TO SAY, so that you, my fellow American, won’t descend on the District of Columbia and demand retribution from the liars and thieves who are ruining this economy. The guys who are walking away with literally trillions of dollars that belong to US.
Bush, Chaney, Paulson, Bernanke. That’s just the tip of the iceberg. Digging deeper I am positive we will find famous folks from both sides of the political spectrum. How do we find them? Same as always: Follow The Money. Which, incidentally, adds up to more than 2 trillion dollars in the US so far (not counting the so-called bailout).
They are stealing us blind, because we are allowing them to do it. Damn my hippie generation! Where did the rest of us go?
Image via Wikipedia Citi Bailout - US Govt Screws US Again 
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