Another Trillion Dollar Bailout To Be Announced Monday! $1,000,000,000,000 - GoFuckYourself.com

Ethersync · 03-22-2009, 08:24 PM

Quote:

The Obama administration's latest attempt to tackle the banking crisis and get loans flowing to families and businesses will create a new government entity, the Public-Private Investment Program, to help purchase as much as $1 trillion in toxic assets on banks' books.

The new effort, to be unveiled Monday, will be followed the next day with release of the administration's broad framework for overhauling the financial system to ensure that the current crisis - the worst in seven decades - is not repeated.

A key part of that regulatory framework will give the government new resolution authority to take over troubled institutions that would pose a threat to the entire financial system if they failed.

Administration officials believe this new power will save taxpayers money and avoid the type of controversy that erupted last week when insurance giant American International Group paid employees of its troubled financial products unit $165 million in bonuses even though the company had received more than $170 billion in support from the federal government.

Under the new powers being sought by the administration, the treasury secretary could only seize a firm with the agreement of the president and the Federal Reserve.

Once in the equivalent of a conservatorship, the treasury secretary would have the power to limit payments to creditors and to break contracts governing executive compensation, a power that was lacking in the AIG case.

The plan on toxic assets will use the resources of the $700 billion bank bailout fund, the Federal Reserve and the Federal Deposit Insurance Corp.

The initiative will seek to entice private investors, including big hedge funds, to participate by offering billions of dollars in low-interest loans to finance the purchases. The government will share the risks if the assets fall further in price.

When Geithner released the initial outlines of the administration's overhaul of the bank rescue program on Feb. 10, the markets took a nosedive. The Dow Jones industrial average plunged by 380 points as investors expressed disappointment about a lack of details.

Christina Romer, head of the Council of Economic Advisers, said Sunday that it's important for investors to know that the administration is bringing a full array of programs to confront the problem.

"I don't think Wall Street is expecting the silver bullet," she said on CNN's "State of the Union.""This is one more piece. It's a crucial piece to get these toxic assets off, but it is just part of it and there will be more to come."

But private economists said investors may still have doubts about whether the government has adequate resources to properly fund the plan and whether private investors will be attracted to participate, especially after last week's uproar concerning the AIG bonuses, which has added to the anti-Wall Street feelings in the country.

Romer said the new toxic asset program would utilize around $100 billion from the $700 billion bailout fund, leaving the fund close to being tapped out.

Mark Zandi, an economist at Moody's Economy.com, estimated that the government will need an additional $400 billion to adequately deal with the toxic asset problem, seen by many analysts as key to finally resolving the banking crisis.

Zandi said the administration has no choice but to rely heavily on government resources because of the urgency of getting soured real estate loans and troubled asset-backed securities off the books of banks so that they can resume more normal lending to consumers and businesses.

"This is a start and we will see how far it goes, but I believe they will have to go back to Congress for more money," he said.

The Public-Private Investment Program that will be created was viewed as performing the same functions - selling bonds to finance purchases of bad assets - as a similar organization did for the Resolution Trust Corp., which was created to dispose of bad real estate assets in the savings and loan crisis of the 1980s.

According to administration and industry officials, the toxic asset program will have three major parts:

_A public-private partnership to back private investors' purchases of bad assets, with government support coming from the $700 billion bailout fund. The government would match private investors dollar for dollar and share any profits equally.

_Expansion of a recently launched Fed program that provides loans for investors to buy securities backed by consumer debt as a way to increase the availability of auto loans, student loans and credit card debt. Under Geithner's plan for the toxic assets, that $1 trillion program would be expanded to support purchases of toxic assets.

_Use of the FDIC, which insures bank deposits, to support purchases of toxic assets, tapping into this agency's expertise in closing down failed banks and disposing of bad assets.

Some industry officials said hedge funds and other big investors are likely to be more leery of accepting the government's enticements to purchase these assets, fearing tighter government restraints in such areas as executive compensation.

Administration officials, however, insisted Sunday that a distinction needed to be made between companies getting heavy support from the bailout programs and investors who are being asked to help dispose of troubled assets.

Romer said the partnership with the private sector will help ensure that the government doesn't overpay for the toxic assets that it will be purchasing.

"This isn't just another handout to banks," she said on CNN. "We very much have the taxpayers' interest in mind."

The administration's revamped program for toxic assets is the latest in a string of banking initiatives which have also included efforts to deal with mortgage foreclosures, boost lending to small businesses and unfreeze the market for many types of consumer loans.

In addition, the nation's 19 biggest banks are undergoing intensive examinations by regulators that are due to be completed by the end of April to determine whether they have sufficient capital reserves to withstand an even more severe recession. Those that do not will be able to get more support from the government.

The overhaul of financial regulation will be revealed by Geithner in testimony he is scheduled to give Tuesday and Thursday before the House Financial Services Committee.

In addition to the expanded authority to seize big institutions that pose a risk to the entire system, the administration is also expected to offer more general proposals on limiting excesses seen in executive compensation in recent years, where the rewards prodded extreme risk-taking.

The regulatory plan is also expected to include a major change that gives the Federal Reserve more powers to oversee systemic risks to the entire financial system.

The administration is working to unveil its proposed regulatory changes in advance of a meeting of the Group of 20 economic leaders, which Obama will attend on April 2 in London. European nations have complained that lax financial regulations in the United States set the stage for the current financial crisis.

http://apnews.myway.com/article/20090322/D973AFAO0.html

marketsmart · 03-22-2009, 08:28 PM

what a fucking joke.. if the govt wants to free up credit then just take the 1 trillion and loan it to people themselves at a low rate..

the banks are all bankrupt, they just dont want to admit it...

GetSCORECash · 03-22-2009, 08:32 PM

I'm ready for it. I expect the worst to come out of it.

A stock rally followed by a huge crash by the end of April.

LiveDose · 03-22-2009, 08:33 PM

I'm waiting for the part that talks about investigating members of congress that are a big part of causing this whole mess and removing them from certain commitees. Oh, that's right it will never happen....

The more government entrenches itself in the private sector and tries to artificially control things the more fucked and bleak the future will be.

LiveDose · 03-22-2009, 08:34 PM

Quote:

Originally Posted by SCORE-Cash

I'm ready for it. I expect the worst to come out of it.

A stock rally followed by a huge crash by the end of April.

Totally agree. People with brass balls will make an absolute killing before the market completely tanks out.

SBJ · 03-22-2009, 08:36 PM

Quote:

Originally Posted by Ethersync

"This isn't just another handout to banks," she said on CNN. "We very much have the taxpayers' interest in mind."

haha the funniest load of bullshit I've read in awhile!

Ethersync · 03-22-2009, 08:50 PM

Quote:

Investor on Private Public Partnership: "One would have to be a criminal to participate in this"

Say I am SAC Capital. I get to be one of the bidders on bank assets covered by the program

Citi holds $100mm of face-value securities, carried at $80mm.

The market bid on these securities is $30mm. Say with perfect foresight the value of all cash flows is $50mm.

I bid Citi $75mm. I put up $2.25mm or 3%, Treasury funds the rest.

I then buy $10mm in CDS directly from Citi [or another participant (BOA, GS, etc)] on the bonds for a premium of $1mm.

In the fullness of time, we get the final outcome, the bonds are worth $50mm

SAC loses $2.25mm of principal, but gets $9mm net in CDS proceeds, so recovers $6.75mm on a $2.25mm investment. Profit is $4.5mm

Citi writes down $5mm from the initial sale of the securities, and a $9mm CDS loss. Total loss, $14mm (against a potential $30mm loss without the program)

U.S. Treasury loses $22.75mm

Great program.

It's just a scheme to transfer losses from the bank to the taxpayer with an egregious payout to a middleman (SAC) to effectively money launder the transaction.

You've also transmuted a $30mm economic loss into a $36.75mm economic loss because of the laundering. So its incredibly inefficient.

How did fraud and money laundering become the national economic policy of the US?

One would have to be a criminal to participate in this.

http://www.nakedcapitalism.com/2009/...rtnership.html

$5 submissions · 03-22-2009, 08:55 PM

Quote:

Originally Posted by marketsmart

the banks are all bankrupt, they just dont want to admit it...

tony286 · 03-22-2009, 09:33 PM

The banks fail folks kiss your income good bye.

OrangeContent · 03-22-2009, 09:38 PM

I really hope things get better for everyone. I doubt that'll happen based on what I've read and seen these last few months. Common guys, stimulate this economy and start hiring!

Ethersync · 03-23-2009, 03:12 AM

Quote:

Originally Posted by tony404

The banks fail folks kiss your income good bye.

huh?

....

kane · 03-23-2009, 03:24 AM

Quote:

Originally Posted by marketsmart

what a fucking joke.. if the govt wants to free up credit then just take the 1 trillion and loan it to people themselves at a low rate..

the banks are all bankrupt, they just dont want to admit it...

Basically that would be creating one large government owned bank. Those that are screaming socialism now would come uncorked at a program like this. Plus the sheer magnitude of the infrastructure that would be needed to set something like this up would take them many months, possibly years, to complete.

We need banks. This might not be the best way to go about it, but it is a way to bring the private sector into this and allow the banks to get rid of the toxic assets and use the money they get for those assets to being making loans to consumers and businesses again.

After Shock Media · 03-23-2009, 03:25 AM

Quote:

Originally Posted by Ethersync

huh?

....

Everything is related to porn sales and thus our incomes.

Personally yes I am seeing a drop in porn sales assuming I discount new site additions and traffic. However due to the economy as a whole I have been making money in many other areas that were not available before and are very easy to get into offline - some that are almost so damn lucrative that one would think they should be illegal as it should not be common place to almost see a guaranteed 15-20% return on every dollar and not talking APR either. Then something else to consider is that many who are loosing jobs and or houses, most of which have now fucked credit are seeking housing and the banks do not rent out foreclosures (though they do pay companies to maintain them). So any who are able to take small risks on people, the rental markets are fucking strong right now.

We are currently in a period almost like no other and it is a money grab if you have an open mind and the best part is, you do not even need to be some wall street guy, banker, or other person getting some government handouts to be getting in on many of these things.

Then again what the fuck would I know, I post on this board and that alone to most places me in a category of 99.9% idiots who know nothing. So please go back to how the government is screwing us, new world topics, assorted conspiracy theories, Obama's faults, Bush's faults, Republican and Democratic blocking and pork projects, and how you would fix this economy without even loosing sleep.

Shaze · 03-23-2009, 03:32 AM

time for the US dollar to tank even more!!! buy against the US dollar before the announcement if your a Forex trader!!

Ethersync · 03-23-2009, 03:45 AM

Quote:

Neville said...

Does anybody remember that the last people who brought in 3% equity partners to take control of an off-balance sheet hedge fund in a no-loss deal designed solely to absorb toxic assets at inflated prices, were sent to jail by the government for misleading the public? Their names were Andrew Fastow, Jeffrey Skilling and a raft of other managers, at Enron.

The goal of their off balance sheet partnerships was to conceal where and when the real losses had occurred and thus who was responsible for them, until some later date when they could either be transferred back onto the public (Enron's shareholders) in a way they would not notice, or at least after the Enron managers had a chance to unload their shares.

Now we have a virtually identical scheme, but this time it's being promoted jointly by the banks and the US Treasury. Once again the effort is to construct a vehicle into which toxic assets can be transferred at inflated prices, positioning the public to take the losses while disguising them in the short term, and giving the managers of our biggest banks a chance to both profit now and then sell out ahead of the public.

Perhaps Lay, Skilling and Fastow should be hailed as innovators in the field of public finance.

http://www.nakedcapitalism.com/2009/... 4017976998602

03-22-2009, 08:32 PM	#3
GetSCORECash Confirmed User Industry Role: Join Date: Mar 2008 Location: Miami Posts: 5,527	I'm ready for it. I expect the worst to come out of it. A stock rally followed by a huge crash by the end of April. __________________ \| skype: getscorecash \| ICQ: 59-271-063 \| New Sites: \| SCORELAND2 \| Roku Channel SCORETV.TV \| 60PLUSMILFS \| \| Big Tit Hooker \| Tits And Tugs \| Big Boobs POV \| Karla James \| \| Naughty Foot Jobs \| Linsey's World \| Busty Arianna Sinn \| Get SCORE Cash \|

03-22-2009, 08:33 PM	#4
LiveDose Show Yer Tits! Industry Role: Join Date: Feb 2002 Location: Somewhere Out there... Posts: 25,792	I'm waiting for the part that talks about investigating members of congress that are a big part of causing this whole mess and removing them from certain commitees. Oh, that's right it will never happen.... The more government entrenches itself in the private sector and tries to artificially control things the more fucked and bleak the future will be. __________________ Scammer Alert: acer19 acer [email protected] [email protected] Money stolen using PayPal

03-22-2009, 09:38 PM	#10
OrangeContent Confirmed User Join Date: Mar 2009 Location: US / Canada Posts: 381	I really hope things get better for everyone. I doubt that'll happen based on what I've read and seen these last few months. Common guys, stimulate this economy and start hiring! __________________ START A REVIEW SITE GOOD PRICES ON WRITTEN REVIEWS CLICK HERE quote (at) orangecontent.com \| ICQ: 564-113-756

03-22-2009, 08:28 PM	#2
marketsmart HOMICIDAL TROLL KILLER Industry Role: Join Date: Dec 2004 Location: Sunnybrook Institution for the Criminally Insane Posts: 20,419	what a fucking joke.. if the govt wants to free up credit then just take the 1 trillion and loan it to people themselves at a low rate.. the banks are all bankrupt, they just dont want to admit it...

03-22-2009, 09:33 PM	#9
tony286 lurker Industry Role: Join Date: Aug 2002 Location: atlanta Posts: 57,021	The banks fail folks kiss your income good bye.

03-23-2009, 03:32 AM	#14
Shaze Confirmed User Join Date: Oct 2003 Location: Cyberspace Posts: 2,662	time for the US dollar to tank even more!!! buy against the US dollar before the announcement if your a Forex trader!!