Rep. Alan Grayson, D-FL, on the Worst Deal Since Manhattan Was Sold for $24 in Trinkets

[Amerigo Vespucci]

Run time: 05:18 https://www.youtube.com/watch?v=A-DOwLnQ4nk   Posted on YouTube: February 11, 2009 By YouTube Member: Views on YouTube: 0   Posted on DU: February 12, 2009 By DU Member: Amerigo Vespucci Views on DU: 2462

 

Citigroup CEO Vikram Pandit came to the House Financial Services committee yesterday to talk about their use of TARP money. While people have their eye on the bailout money, what the Federal Reserve is doing is actually much larger and more scary. The Federal Reserve has guaranteed over $200 billion of Citigroup's toxic assets, in return for $7 billion in warrants that are probably worthless. Bulldog Congressman Alan Grayson spent about five minutes questioning Pandit and taking this farcical deal apart. He forced Pandit to admit that this arrangement gives taxpayers the downside and Citigroup all the profits.

http://crooksandliars.com/john-amato/rep-alan-grayson-have-you-heard-express

[Not Me]

1. He's my congressman,

replacing asswipe Ric Keller (R).

[ro1942]

3. barnie frank

barnie was glad and relieved to end that, what a corp. tool.

[sallyseven]

18. His name is Barney Frank

He is heads and shoulders over every other congressman and don't you ever forget it.


BARNEY FRANK Got it? Does more for the ordinary citizen every day than any repuke.

[The Backlash Cometh]

6. Wish he were mine.

[Mithreal]

2. Citigroup should go on a spending spree.

Now is the time for them to build up their losses, right? Isn't it obvious why this guy is smiling.

[iamjoy]

4. Go Congressman Grayson!

:applause:

[MindMatter]

5. Where are all the Recs? This was excellent !

This was a brilliant line of questioning, making the most out of every second he had allocated to him.

What a horrendous deal this was. It makes you wonder why ANY Democrat would have supported that.

We should all hope to have a lawyer half this good if we are ever in trouble.

[mascarax]

7. Too late to rec, unfortunately...Grayson is great!

I wish he were my Congressman, but at least he's in there, fighting the good fight.
Wish we had more like him.
Great lawyer, great questioning.

[ooglymoogly]

16. Just rec'd it at 1:15 pm and

Finally we get to begin to see how the greatest theft in history has taken place in back rooms amongst a bunch of thugs, both in and out of government, but cronies all. Keep recommending this despite these odd posts. This is one of the most important posts to come down the pike.

[blackbart99]

12. Got my rec...

What a wonderful, albeit to brief of a, grilling, by a soon to be great congressman.
A lot of people read and comment but forget to hit the REC button.
:toast: good job Florida.

[cynthia]

8. He's great!

We need more like Grayson-nail 'em!

[trthnd4jstc]

9. The Economic Bail-out of Citi-Group is obviously a terrible deal. BushCo. Gave them a deal.

It should be considered criminal what George Bush did to our nation. The initial TARP was a give-away to the financial institutions that received them.

[OwnedByFerrets]

10. Recommend

[defendandprotect]

11. Large US Banks on Edge of Insolvency, Experts Say

We're taking on the losses -- let's just NATIONALIZE the banks ---
-------------------------------------------------------------------

Published on Friday, February 13, 2009 by the International Herald Tribune
Large US Banks on Edge of Insolvency, Experts Say
by Steve Lohr Published

Some of the large banks in the United States, according to economists and other finance experts, are like dead men walking.

Nouriel Roubini, professor of economics and international business at New York University, testifies before the Joint Economic Committee in October 2008 in Washington, DC. The financial crisis may lead to 3.6 trillion dollars in losses and writedowns for the global banking sector, Roubini said Thursday. (AFP/Getty Images/File/Win Mcnamee)A sober assessment of the growing mountain of losses from bad bets, measured in today's marketplace, would overwhelm the value of the banks' assets, they say. The banks, in their view, are insolvent.

None of the experts' research focuses on individual banks, and there are certainly exceptions among the 50 largest banks in the country. Nor do consumers and businesses need to fret about their deposits, which are insured by the U.S. government. And even banks that might technically be insolvent can continue operating for a long time, and could recover their financial health when the economy improves.

But without a cure for the problem of bad assets, the credit crisis that is dragging down the economy will linger, as banks cannot resume the ample lending needed to restart the wheels of commerce. The answer, say the economists and experts, is a larger, more direct government role than in the Treasury Department's plan outlined this week.

The Treasury program leans heavily on a sketchy public-private investment fund to buy up the troubled mortgage-backed securities held by the banks. Instead, the experts say, the government needs to plunge in, weed out the weakest banks, pour capital into the surviving banks and sell off the bad assets.

It is the basic blueprint that has proved successful, they say, in resolving major financial crises in recent years. Such forceful action was belatedly adopted by the Japanese government from 2001 to 2003, by the Swedish government in 1992 and by Washington in 1987 to 1989 to overcome the savings and loan crisis.

"The historical record shows that you have to do it eventually," said Adam Posen, a senior fellow at the Peterson Institute for International Economics. "Putting it off only brings more troubles and higher costs in the long run."



http://www.iht.com/articles/2009/02/13/business/13insolvent.php

[cosmicone]

13. I think it was a bunch of oversimplification by the congressman

Vikram Pandit held his own. He is setting an example by only taking $1 in salary and no bonus until the government's obligations are paid in full.

Every insurance contract, say on your house, is similar. If the value goes up, the insurance company doesn't share in the profits.

Furthermore, the value of $300 billion in real estate can never go down to zero - all real estate has a fundamental inherent value. So the risk of the government is not 100% of the face value of the assets.

It is good politics but the reality is that after the stimulus bill passes, the real estate values will stabilize and go up, reducing the government's liability to nil.

[JJ]

17. Nice theory... too bad it doesn't match reality.

Most of the toxic "assets" aren't real estate, but derivitives. ie ponzi paper. Might be worth wiping your ass on, but not much else.

[zipplewrath]

14. I'm not as impressed as some.

The closest he came to an actual point was that Citi Group was "sold" 290 billion worth of insurance for 7 billion on assets that were considered "high risk". The point he didn't explicitly make was that they "paid" for it with stock. There are problems with all those arrangements, but he never got to them. He preferred to discuss whether "29 was 30". It was probably a "bad deal" but since the government is now in a position to help Citi Group "recover" they ultimately can make a profit off of this if it is handled correctly (which considering that it is a government run program, they probably won't).

[sallyseven]

19. Yes of course. Government is such a drag.

Can't do anything right. But, but, Government didn't screw up the economy business did. That is why we are in the mess we are in. Hooray private business. Bull dickey.

[zipplewrath]

21. Differently incentivized

The profit potential for this will be measured in a few billions. The loss potential is in the hundred of billions. The governments primary objective will be to avoid losing hundreds of billions of dollars. There is little incentive for them to risk much in pursuing a few billion dollars of profit.

[valerief]

15. K&R

:kick:

[olegramps]

20. What struck me about Vikram Pandit was his Bush like arrogance.

[midnight]

22. Who worked out that deal that puts the tax payer holding the

bad debt? "Bulldog Congressman Alan Grayson spent about five minutes questioning Pandit and taking this farcical deal apart. He forced Pandit to admit that this arrangement gives taxpayers the downside and Citigroup all the profits."