Wait till you see the NEXT bailout...

[Dover]

WASHINGTON (CNN) -- This week, the Obama administration launched an angry campaign (and rightly so) targeting the greed of the financial services industry.

The big bank executives -- with their French private aircraft purchases, Las Vegas boondoggles and multibillion-dollar bonuses (despite having just received taxpayer bailout funding) -- appear politically tone deaf. Now the Treasury Department is proposing a $500,000 salary cap on senior executives of banks receiving taxpayer funding.

But here's how Washington really works. The reason for Obama's public campaign is that soon officials are likely to hand the banks a taxpayer-funded bailout potentially worth trillions of dollars. Therefore, what's happening here is the creation of old-fashioned political cover.

The administration needs this cover because it faces a horrible choice. At issue is how the Treasury arrives at a price for the banks' toxic assets in any bailout package that entails taxpayer funding.

Here's the catch: If officials value the toxic assets at too low a price, all bank stocks will collapse. The world then would declare the large U.S. banks insolvent. America would face financial Armageddon.

On the other hand, valuing the toxic assets at an artificially high price (at the taxpayers' expense) may save the banks but invites a political firestorm at a time when average folks are hurting. Thus the need for cover.

Essentially, the administration is offering the bankers an implicit deal. Even though senior executives from banks receiving government assistance will face limits on their salaries, the value of their personal shareholdings in their companies -- where for most executives the big money is -- could potentially be restored if bank stocks rise in response to the bailout. In many cases, those shareholdings are now all but worthless paper.

President Obama is being forced to provide a bank bailout because of the banks' dirty little secret: Their off-balance-sheet financial exposure is far larger than publicly acknowledged -- according to various banking analysts, their liability to losses is from four to 16 times their stated on-balance-sheet exposure to bad assets.

Thus, a bailout, with those assets stuffed into a so-called "bad bank" owned by the taxpayer, could require potentially trillions of taxpayer dollars.
To lead us out of this morass successfully, Obama needs to more clearly lay out for the American people the horrific details of our global financial landscape...cont'd

http://www.cnn.com/2009/POLITICS/02/06/smick.bailout/index.html

[drm604]

1. K&R

:scared:

[marketcrazy1]

2. it seems they may have other plans

we will find out Monday, whatever the plans are you can be sure they WILL NOT include exposing the fraud or forcing losses on to those who made the mistakes that brought us here! rather they will craft a program that will shield the fraudsters from their losses and quite possibly even allow them to reap huge profits at taxpayer expense... I will be neither shocked nor surprised when this is revealed to be the case.............. I have faxed,Emailed,called and petitioned as have others, unfortunately there have been to few of us... at least i can say I tried...

[stillcool]

3. Someone is going to have to splain..

this one to me. I barely comprehended the last one. Does anyone know if any of that money actually did anything..besides line some pockets?

[Festivito]

6. I don't know it all for certain. (But of this I'm pretty sure.)

The last bailout was to line the pockets of the well connected. It was akin to grabbing money out of each bank teller's till AFTER having emptied the entire vault. (They didn't get to the safety deposit boxes we call Social Security.)

This bailout bails out the working class who voted for Obama, it gives jobs, and a bit of security in those jobs. As least as much as the Republicans will allow while Republicans hope they can make it fail so the money they stole will buy more of what the workers and the people who thought they were rich once owned.

The next bailout will work on bailing out the workers lack of confidence (security again) in their jobs as the pensions funds start to fail. (All the good money such as blue chip stocks were taken out of pension funds and replaced with the treacherously made money of derivatives which sit there like time bombs waiting for the day retirees need the money and those derivatives start being cashed. Cashed, knowing that there never was money behind them in the first place, just a big housing price bubble that will have, by then, been long long ago.)

EDIT ADD (...) to title.

[bluesmail]

20. You're supposed to feel confused. If you understood what they are doing

via critical thinking they'd have been exposed at last year's bailout. :shrug:

[Jackpine Radical]

4. I think we need to nationalize the banks. Then the oil companies.

The Gubmint can use the profits from the oil companies to finance the bailout of the People's Banks.

[coalition_unwilling]

21. Add to that list the defense

industry and couple with an immediate 25% cut in the defense budgets.

[pa28]

5. Sad that the "bad bank" die seems to have been cast.

Obama's closest economic people seem to favor this approach and he may not have heard much about the nationalization alternative. I wish he'd have a long talk with Krugman.

[Stinky The Clown]

7. Can we just pass Go and jump all the way to "Nationalize The Banks"?

Please?

[truedelphi]

8. K & R for reading later. n/t

[lostnotforgotten]

9. And Proof Positive That Obama And The Democrats Are Going To Fuck the Little Guy Again

Hope this is change you can believe in!

[crimsonblue]

11. If all the banks fail, we're all fucked. n/t

[lostnotforgotten]

12. Your Humble Opinion Only - Let's Leave It At That

eom

[crimsonblue]

14. no, it's a fact.

Don't let your blind hatred of banks and capitalism get in the way.

[lostnotforgotten]

15. Facts In Your Own Mind Only

eom

[eridani]

13. No we aren't. The government becomes the banker of last resort--

--just like in the 30s. Kill off all the sociopathic institutions that got us into this mess, and go for a fresh start.

[lostnotforgotten]

16. Yes - We Need To Hit Reset - Adding Gas To A Fire Gets One A Bigger Fire

eom

[SlowDownFast]

18. At least some people here get it. n/t

[The Brethren]

10. "trillions of taxpayer dollars".

Holy crap Batman!! Just what we don't need, or I should say...can afford. You know, I was having a reasonably good day trying not to think about our economic crisis for a bit till I read this. LOL But thank you Dover for putting the information out there for us.

Maybe I'm just too biased and jaded at this point to even consider another bail-out/nationwide tax expense to be more objective. The Wall Street bail-out fiasco worth billions was in Oct., followed by Obama's stimulus plan worth even more billions last month and now this. Of course this is not even taking in account our already acquired yearly nationwide expenses.

I am beginning to believe TPTB are playing the old shell game where if you shuffle things around enough, everyone else gets too confused watching to actually notice where the "coin" under the shell ends up.

[SlowDownFast]

17. "toxic assets"

Hint:

It's not an "asset" if it's "toxic".

Let's call them what they really are and call them fucking LOSSES.

BIG FAT FUCKING ZEROS.



MARK IT ZERO!

Now back to the grindstone to sharpen my pitchfork...

[lostnotforgotten]

19. Roger That - I Like The Guillotine Over The Pitchfork

eom