Bush overpaid banks in bailout, watchdog says

[cal04]

Source: Associated Press

The Bush administration overpaid tens of billions of dollars for stocks and other assets in its massive bailout last year of Wall Street banks and financial institutions, a new study by a government watchdog says.

The Congressional Oversight Panel, in a report released Friday, said last year's overpayments amounted to a taxpayer-financed $78 billion subsidy of the firms.

The findings added to the frustrations of lawmakers already wary of the $700 billion rescue plan, known as the Troubled Asset Relief Program. Congress approved the plan last fall, but members of both parties criticized spending decisions by the Bush administration and former Treasury Secretary Henry Paulson.

Financially ailing insurance giant American International Group, deemed by the Treasury Department to be too big to be allowed to fail, received $40 billion from the Treasury for assets valued at $14.8 billion, the oversight panel found.

Read more: http://news.yahoo.com/s/ap/20090206/ap_on_go_ca_st_pe/bailout_oversight

[corpseratemedia]

1. it's rich vs. poor

he had to help his friends out, he knew what he was doing, he had to steal from the poor because in his world they don't count, and he's never been accountable for anything in his entire life


god forbid they'd end up like the little poor people b*sh despises

[Turbineguy]

2. I thought that was the whole idea.

Flushing out the treasury. That's what he was elected to do. That's why so many people didn't vote for him. That's why the election fraud.

[underpants]

41. 1/20/01 The Three prime objectives

1. Empty the treasury
2. Raid the public trusts
3. Invade Iraq

[onehandle]

3. Shut up and eat your dog food.

Sincerely,
The Banks.

P.S. Your mortgage is overdue. We're taking your house.

[nc4bo]

4. Why this revelation now? Why wasn't the Oversight Panel doing it's

job while the money was being released? Where was the real-time oversight?

This is Bush and Paulson's kitty cat, what do either of them have to say about all of this, especially that greasy, stuttering asshat Paulson?

So now that we've confirmed that overpayments were made, what action should be taken to return it?

:nuke:

[D-Lee]

39. Because Bush Administration refused to release its data on TARP payments

Remember those headlines that Bush didn't want to "embarrass" the recipient banks and refused to identify a lot of the institutions which got the money?

It is hard to "oversee" those who refuse to report -- and, because there was only a matter of weeks before Bush was going to be out of office -- blaming Congress for not taking enforcement action would be inappropriate. Enforcement action would have taken longer than the time left on the clock. Of course, notwithstanding this sensible reservation, the Repubs now blame the Democratic Congress for the Bush's administrations inactions (ignoring that only Obama has brought transparency to these transactions).

Yup, nicely timed by the Repubs.

There is an excellent argument that it is better to pay for food stamps and similar items, which save real people. See this DU chart on how THAT is the best "bang for the buck" on economic salvation: http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4995715&mesg_id=4995715

Oh, gee whiz, the Repubs don't like that? Hmm ... no surprise.

I just hope the American public is cynical enough to see through the Repub posturing and claims that they are "responsible" and have a "proven solution."

I'm going to stop before I launch into a rant ...

[JDPriestly]

46. Paulson should be charged with criminal fraud. Probably not possible,

but morally correct.

[Romulox]

5. Are we blaming Bush for the next round of the TARP, too? nt

[Romulox]

6. By definition, the gov't paying $1 for something that is otherwise unsalable is overpaying.

[melm00se]

7. so why are we saddling up

to give them more money?

[SpiralHawk]

8. "Smirk." - X-Commander AWOL & fatcat Republicon Cronies

[HopeHoops]

9. Well I am JUST shocked I tell you, SHOCKED!

[valerief]

36. Moi aussi. SOP for these clowns. nt

[PSPS]

10. Anotther GOP money-laundering scheme.

This time, it's "bail out the banks" and the "banks" turn around and make big contributions to the GOP.

[blm]

40. The banks get to clean up their books before they're caught with their ENRON style bookkeeping.

.

[commanche]

11. what makes them think it went to the banks?

The banks cant recall where it went, remember. Sounds like Bush and the mob were lining their pockets, including the bankers.

[struggle4progress]

12. US watchdog attacks bail-out plan (BBC)

The Congressional Oversight Panel says .... the US Treasury paid $78bn (£53bn) more than it should when buying stakes in banks through the $700bn Troubled Assets Relief Program (Tarp).

The Treasury had paid $254bn in 2008 in return for shares in a number of troubled financial institutions ...

The head of the oversight panel, Elizabeth Warren, told a congressional committee that after three months on the job, her panel is still not getting enough answers from the Treasury.

She described the bail-out as "an opaque process at best" ...

http://news.bbc.co.uk/2/hi/business/7874434.stm

[struggle4progress]

13. Treasury Overpaid for Bank Assets in Bailout, Oversight Panel Says (WaPo)

By Amit R. Paley
Washington Post Staff Writer
Friday, February 6, 2009; Page A03

... The investigators concluded that the Treasury under the federal bailout had invested $254 billion into companies but the preferred stock it got in return had a market value at the time of only $176 billion, or 69 percent of what the government paid, according to a congressional oversight panel report scheduled to be released today ...

"Isn't that a terrible way to look after the taxpayers' money and to make purchases anywhere?" Sen. Richard C. Shelby (R-Ala.), ranking member on the Senate Banking Committee, said at a hearing on oversight of the bailout.

Warren replied, "Senator, Treasury simply did not do what it said it was doing."

"In other words, they misled the Congress, did they not?" said a visibly flustered Shelby ...

http://www.washingtonpost.com/wp-dyn/content/article/2009/02/05/AR2009020503629.html?hpid=topnews

[struggle4progress]

14. TARP Shortchanged Taxpayers by $78 Billion, Watchdog Panel Says (Bloomberg)

By Mark Pittman and Bob Ivry

... “The loss estimate is conservative,” said Representative Alan Grayson, a Florida Democrat on the House Financial Services Committee. “It could turn out that those assets in the end are worthless. These are massive handouts to favored institutions to try to make up with taxpayer money the mistakes they made with investor money.”

The public’s stake in the nation’s banking system continues to grow as first the Bush administration and now President Barack Obama’s team work to pull the U.S. out of the deepest recession in at least two generations. TARP, which is part of the more than $9 trillion the government has pledged to rescue the financial system, has guaranteed $350 billion to banks so far, with another $350 billion set for use in coming months.

Treasury spokesman Isaac Baker declined to discuss the panel’s report directly. He said Treasury officials have already “prevented a systemwide collapse” and plan to make an announcement next week ...

TARP hasn’t succeeded in clearing bad assets from banks’ balance sheets, which would allow the companies to lend money and get the economy going again, said Gregory Miller, chief economist at SunTrust Banks Inc. in Atlanta. The KBW Bank Index of 24 financial institutions has fallen 58 percent from Sept. 15 through yesterday ...

http://www.bloomberg.com/apps/news?pid=20601103&sid=aTDor5YnbmQM&refer=us

[struggle4progress]

15. AIG and Citi deals gave Treasury least value (Reuters)

By David Lawder

... The report showed that the Treasury got the worst deal on second-round investments in American International Group for $40 billion and Citigroup for $20 billion under special aid programs tailored for the two institutions.

For each $100 spent on these two companies. the Treasury received securities worth $41, the report concluded.

Earlier investments in eight institutions seen as "healthy" at the time, returned $78 for every $100 spent. These investments included an initial $25 billion for Citigroup, along with funds for Bank of America, JPMorgan Chase, Morgan Stanley, Goldman Sachs, PNC Financial and US Bancorp.

The government's "subsidy" -- the percentage difference between the value paid and the value received -- was largest for AIG at 63 percent and smallest for US Bancorp at 5 percent ...

http://uk.reuters.com/article/usTopNews/idUKTRE5140SN20090206?sp=true

[Lasher]

16. Watchdog: Treasury overpaid for bank stocks

This thread has been combined with another thread.

Click here to read this message in its new location.

[Skittles]

17. it was always about looting the treasury

yup

[hugo_from_TN]

18. Wasn't Geithner involved in this?

He was heading the NY Fed at the time, right?

[LaPera]

19. Pure republican slime. Anything to give our hard earned tax dollars to corporations in order

for republicans to "drown" any chance for a democratic recovery, fuck over the workers (unions) and to make sure to destroy any chance for the much needed Universal Health Care.

[ChiciB1]

20. Gee, Wish I Had Gotten This Info Before 5:00 PM Yesterday!!! Bank Of America

FINALLY decided to pay me back MY MONEY for fraudulent credit card charges! I might have told them they needed to DOUBLE the amount!

Been going on for FOUR years and not until I got Senator Bill Nelson involved did they agree they owed me!!

Nelson's office told me BANK OF AMERICA is one of the WORST to pay back fraud claims. Bill Nelson was never high up on my list of Senators, but they got back to me with lightening speed. I was delighted and shocked! Guess I'll have to give him and his office a big "atta boy" even if the reaction was only because of TARP! But Nelson didn't vote for THAT either, so I guess he has been representing me after all.

When I told B.O.A waaaaaaaaaaaaaaaay back when that the charges were fraudulent, they said to keep paying while they researched it. So I kept paying to avoid "bad credit" but in the end I finally stopped and THEY REPORTED me. Then told me they thought my claim was an "inside" job and refused to pay! And the amount of money I paid them still makes me wonder if I "had" all my marbles at the time. Being a trusting soul and all, I stupidly thought they would "do the right thing," but found out they thought I would shut up and go away and they weren't ever intending to pay! I NEVER gave up though and recently went ALL OUT because of the BAILOUT mess. I told them that had they paid me the money, I could have gone to their NFL Extravaganza only and hour away from me, but couldn't make it because my finances were in POOR shape!! You wouldn't believe some of the conversations I've had with them! The incompetence level is astounding! I could go on and on, but NEVER again will I "play nice" with the likes of these crooks! I've learned many NEW tricks!

Just yesterday they said I was going to get my check for almost $8,000.00!!! And yes, I know... still waiting, but you can bet your ass if I DON'T get THAT check, Senator Nelson's case worker will hear from me ASAP!

I wonder what more will keep "trickling down" about BFEE and what they've done to OUR country! And I'm sorry to say this, but they DID get help from many Democrats too!

But hey, I've only been calling for REVOLUTION for over EIGHT (8) years now!

[Demobrat]

21. Well of course. That's exactly why they HAD to

have the money immediately - in other words while W was still in office. They had to get while the getting was good - and they did.

[GinaMaria]

22. * didn't overpay for anything. We did. He used our money

It's easier to waste other people's money than your own, I guess.

[vinylsolution]

23. It really is....

... the rich vs. the rest of us.

Keep framing it this way, always tell it like it is.

[On the Road]

24. That May be True, But What Difference Does It Make?

The investment is in preferred stock. The value does not change with the stock marker -- it returns a fixed percentage like bonds. The stock was designed to pay 5-6% for a few years after which it rises to 9%. (This was to stimulate the banks to find better means of financing after the crisis is over.)

The article didn't provide a lot of detail. If the overpayment was referring to the purchase price, it hardly matters. Either the bank will fail and the stock is worthless or it will be paid back in full.

If it was referring to the interest rate, it is true that Warren Buffet secured a higher percentage. But he is a private investor and his goals are to maximize his and Berkshire Hathaway investors' profits. The federal government's goal was to make the government whole while helping the banks to avoid failure. It appears to me that it strikes a good balance.

[LeftHandPath]

25. Worth less than ZERO...

There is something we all need to understand about the garbage we allowed these felons to create with financial engineering.

A Mortgage Backed Security (MBS) is more than just a 'debt' obligation. It is an actual physical thing, as in a house.

A house costs money to maintain, taxes have to be paid, and the value of the house can decrease.

Once the default rates on the MBS reaches a certain level, the security actually begins to COST money.

Not only can the MBS not be sold, the payments necessary to keep the security become overwhelming and have a negative income effect.

As more of the loans default, the cost of maintaining the security increases.

At some point, these banks will actually have to PAY someone to take these loans off their books.

[pinniped]

26. I guess it's too hard to tell those AIG fucks to fork the extra $$$$ over.

And that asshole Paulson knew what he was doing all along. I guess jail is out of the question for any of these jerks.

[Wapsie B]

27. Lessee here, repugs funnel the $$$ upwards and there's no problem.

Dems try to cut the working stiff some slack and all hell breaks loose. Upside down world we live in.

[whistle]

28. Dubya wanted to be "Mr Nice Guy" going out

[RiverStone]

29. If your bank accidentally deposited and extra 1K in your acct., you'd pay it back

Why can't AIG?

There are no words left to describe the arrogance and greed....:mad:

[frylock]

30. no shoot, sherlock..

mission accomplished.

[katty]

31. of course they did-SOP

[barbtries]

32. gee.

color me not surprised.

[mdmc]

33. Hey Chris Dodd! Why did we NEED TO DO THIS?

I'm all ears.

[neuvocat]

47. Something to the effect of the little guy needs a job.

Funny thing though after 100,000 layoffs I don't think the bailout worked.

[peacetalksforall]

34. The horror here is 40 billion to a company worth 14.8 billion. If some

were overpaid in December you underpay them the next time. If it was a one time pay-out, bill them.

But overpaying some rich people TWENTY SIX BILLION more than their worth is PURE THEFT - the most arrogant act in all this country's history since the white man invaded it.

A. I. G. Remember that. Follow it to see what their defense is.

Then act - with petitions, letters, scathing put-downs of their dishonesty, if true.

So how many people entered the prison system today for what is a petty crime compared to this massive insult.

No wonder they are partying and buying foreign companies.

What is China saying? Russia? Japan? UK? Saudi Arabia? How many other debt holders do we have?

[ooglymoogly]

35. Should have read; Bush overpaid cronies in the largest theft

in the history of the world.

[ealvarez12]

37. What Now?

78 billion is considerably larger than a fraction of the total bailout package. As long as some government watchdog agency is keeping an eye on how the stimulus is being utilized, we can only criticize and evaluate the plan after observing its effectiveness.

Evan
http://www.beyondrace.com

[pjt7]

38. thieves paying thieves

I wish the D's could go 100% ape-shit over this, but they were the majority party, who allowed for the official theft-om.

[underpants]

42. Well if you believe the GOP-fed MSM meme the "missing TARP monrey" happened on Obama's watch

that is clearly the implication

[glinda]

43. Sick and tired of complaints and excuses and want ACTION by Government now!

Bunch of spineless whiners. I don't forgive any of them that don't go back and demand answers and money back.

[femrap]

44. Biggest. Heist. Ever. nt

[Solly Mack]

45. No shit

Whodathunkit

[malaise]

48. So who received this money

and was it the banks or the Bush cronies?