M-LEC: Restructuring Not Bailout (click here)
by: Roger Ehrenberg October 22, 2007
...Now, the ultimate Wall Street player and insider, Henry M. Paulson Jr., the Treasury secretary, has bestirred himself to take serious notice of the credit problems faced by some very big lenders. He wants to create a bailout fund in which banks that still appear sound buy some of the debt of the troubled players like Citigroup....
Banks May Pool Billions to Avert Securities Sell-Off (click here)
By ERIC DASH
Published: October 14, 2007
...Citigroup, Bank of America and JPMorgan Chase, along with several other financial institutions, have been meeting to come up with a plan to create a fund that could prevent a sharp sell-off in securities owned by bank-affiliated investment vehicles. The meetings, which began three weeks ago, have been orchestrated by senior officials at the Treasury Department, and the discussions have intensified in the last few days....
...The effort to create a backup fund began about three weeks ago, when the Treasury secretary, Henry M. Paulson, called a meeting in Washington that included the chief executives of Citigroup, Bank of America, JPMorgan and other big banks. With Wall Street firms having almost no luck finding buyers for mortgage-backed securities and derivatives, Mr. Paulson wanted to see what could be done to relieve the bottleneck....
Basically, the American people were left out of the picture entirely. The only focus Paulson took was to buoy the financial markets no matter the cost. Bush/Paulson/Bernanke had plenty of time to bring hearings and call on Congress to restructure issues that would disaffect the financial sector and they did NOTHING. Never once did Hankie Paulson ever consider the contracture that would occur that would ruin the American economy that supported American labor. Never once did Paulson come forward to bring an agenda of structured 'recovery' to the people of the USA. He and bush simply 'let it ride' scared of the outcome in 2008 and hoping the 'crash' would not come before the Presidential elections.
The monies that were paid in executive compensation were simply a 'matter of fact' for any business sector. Do executives ever sabotage their employers to 'take secrets' into other venues for their own profit? Sure they do, ask Bill Gates. The 'compensation' of executives in financial institutions take many forms, it was unconscionable for Paulson to even consider eliminating 'bad decision' makers from any payroll. After all he and The Decider were of the same 'stock.'
Goldman's share of AIG bailout money draws fire (click title to entry - thank you)
Wed Mar 18, 2009 4:46am EDT
By Paritosh Bansal - Analysis
NEW YORK (Reuters) - American International Group funneled over $90 billion of taxpayer bailout funds to various U.S. and European banks, but the biggest beneficiary was politically connected Goldman Sachs Group Inc....
....$12.9 billion AIG paid to Goldman Sachs -- where then-Treasury Secretary Henry Paulson had previously worked as chief executive -- in the months after the insurer was rescued by the government last September.
Goldman, for its part, has insisted it did not need the bailout money because it was "always fully collateralized and hedged."...
...Asked why Goldman Sachs took $12.9 billion of taxpayer money if it was collateralized and hedged on its AIG positions, DuVally said it was because AIG was not allowed to fail, so Goldman did not get money from hedges that would have paid out if the insurer had collapsed. And, he said, under the terms of its contracts with AIG, Goldman was entitled to collateral....
Of course. Then the monies that went to Goldman Sachs they didn't need, right? So, why then weren't those monies returned to the USA Treasury and the people of the USA? Have an answer for that one?
If Paulson was sincerely concerned for the USA Treasury BEFORE placing importance on the 'bailout' of Goldman Sachs liabilities, the 'salary scale' to top executives of the 'toxic division' of AIG should have been included in the bailout he proposed. But, if that were to take place that would mean the government would actually have to 'lean' on AIG in a manner the Republican Neocons never approved of in the first place. If one recalls the first $350 billion was a free for all and STILL isn't accounted for! That was the Paulson/Bush solution.
...Goldman was not the only large bank with exposure to AIG. The list of counterparties that AIG disclosed on Sunday included others that got large sums. Goldman was followed by Societe Generale with $11.9 billion, Deutsche Bank with $11.8 billion and Barclays PLC with $8.5 billion.
Moreover, the AIG disclosures are still incomplete in that they do not include payments to the banks since December 31.
In the article below, it is clearly noted that Standard and Poor's down graded AIG on four different occassions because their financial 'risk' was increasing after it embarked on 'experimental' financial tools in their Financial Products Division. Did anyone ever ask why AIG should have received any funds to 'support' its operation past its failure based upon recognized and long standing reliable ratings such as the S&P? No. Paulson simply jumped into the mess with two feet when Goldman Sachs was sure their 'hedging' was the best in the business and should follow the same course as time would prove the performance of the new products would win out. Hankie Paulson continued his lust for his $14,000 DOW on a gamble that in time AIG's products would turn a huge profit, or better yet, the products the company developed could be sold at auction as the American People's frustration with 'promised' returns to pay back the bailout failed.
Ratings Agency: We Started Downgrading AIG In 2005 (click here)
11:26 A.M.: UPDATED:
The Standard & Poor's executive in charge of issuing credit ratings on AIG started downgrading the insurance giant in 2005, he testified moments ago before a meeting of a subcommittee of the House Financial Services committee.
Rodney Clark, the managing director of S&P's ratings group, said that his company downgraded AIG four times since 2005 because of perceived trouble brewing with the credit default swaps sold by AIG's Financial Products division, which would likely have brought down the company had it not been for $173 billion in government bailout money.
AIG carried an AAA rating from S&P for many years, Clark said, but if the insurance giant were not propped up by the government right now, it would have a BB- rating, or junk....
When Paulson mastermind this entire 'bailout' for the financial sector before he was evicted from office, he stated the banks that would be saved would 'in a short period' of time return the funds to the American treasury. Never in the history of this country was $700 BILLION US ever legislated as a method to ? save ? a private sector. Never. In a matter of months $700 billion (That is seven hundred thousand units of $1,000,000 in funds) was to saturate the global markets and correct all the ills of the USA economy. Hasn't done it yet. But, of course, all those analysts will tell anyone, "But, but, but, the labor market is the last place you'll see a recovery."
In the article below it reminds the American people that there IS a way to save jobs and rebuild our economy that was ravaged by Wall Street. We don't live in a perfect world, however there are nearly 90% of the jobs saved at Catepillar due to the Obama Economic Stimulus. But, of course, in the case of bailing out Wall Street we'd have to be patient and wait for our jobs to be regenerated. Jobs that would be restructured to eliminate unions and a living wage. I don't think so !
Political Punch
Power, pop, and probings from ABC News Senior White House Correspondent Jake Tapper
The Very Hungry Caterpillar, Cont'd (click here)
March 17, 2009 7:03 PM
Caterpillar, Inc. today announced it intends to lay off 2,454 employees at five plants in three states -- including 911 employees at the plant in East Peoria, Ill., that President Obama visited in his push for Congress to pass the stimulus package.
As you may recall, on February 11, while campaigning in Virginia for his "Recovery and Reinvestment Act" to pass Congress, President Obama said that "Caterpillar, which manufactures machines used in this project has announced some 20,000 layoffs in the last few weeks. Today the chairman and CEO of Caterpillar said that if the American Recovery and Reinvestment plan passes, his company would be able to rehire some of those employees."
At the Caterpillar factory on February 12, President Obama said that Jim Owens, the CEO of Caterpillar, Inc., "said that if Congress passes our plan, this company will be able to rehire some of the folks who were just laid off."...
