The Subsidy That Won't Die

[cory777]

Source: Newsweek



The big banks claim the government isn't helping them anymore. Not exactly. Check out this little-known subsidy.


By Daniel Gross | Newsweek Web Exclusive
Jan 13, 2010 | Updated: 9:44 a.m. ET Jan 13, 2010

The big bankers are in the news again, and they're steamed. On Wednesday, bank CEOs will testify before the Financial Crisis Inquiry Commission. Meanwhile, the industry is pushing back against plans from the Obama administration to tax large banks as part of an effort to recoup bailout costs. JPMorgan Chase CEO Jamie Dimon, bristling at criticism of his hardworking bankers, told employees: "I am a little tired of the constant vilification of these people." Wall Street's big shots have had enough They've paid back their TARP money—which, some of them say, they didn't need anyway—with interest. They've got the government off their balance sheets, so now the government should stop meddling with them.

But the big American banks aren't nearly so independent as they would have us believe. JPMorgan Chase, Goldman Sachs, and their peers are still benefitting hugely from significant post-crisis subsidy programs that boost their profits. I'm talking mostly about the Temporary Liquidity Guarantee Program (TLGP). This was a program started in the wake of the Lehman Bros. collapse to deal with the fact that banks were having a tough time raising short-term capital on decent terms. Under the TLGP, the Federal Deposit Insurance Corp., which is ultimately backed by the taxpayers, would guarantee debt in exchange for fees paid by the banks issuing debt.

The TGLP was ended to new entrants in June 2009 and thus far has gone without a loss. But the fact remains: Private companies were allowed to borrow massive amounts of money—$345 billion at the peak in May 2009—on the public's credit. At the end of the third quarter, there was still $313 billion outstanding.


Read more: http://www.newsweek.com/id/230530

[Jefferson23]

1. Beyond despicable.

[cory777]

2. Not News?

[DeSwiss]

3. An article can be.....

...12 hours old or less only, to make into "Breaking News."

- Welcome to DU

[cory777]

5. Aww Thanks!

I got it now.

[DeSwiss]

4. JPMorgan Chase CEO Jamie Dimon....

...bristling at criticism of his hardworking bankers, told employees: "I am a little tired of the constant vilification of these people."



- "Constant vilification??? You fucking asshat. Well how about a "constant ass-kicking," huh? Would you prefer that? Because that's what most of us would prefer to be giving you. What a POS.....




K&R