BAILING ON THE BAILOUT

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WHATEVER HAPPENED TO HELPING THE HOMEOWNERS?

NOW IT'S JUST ANOTHER REPUBLICAN PIG-OUT FOR BIG BIZ



Your Tax Dollars Are Buying Golden Parachutes Galore

As the sun sets on the Worst Presidency Ever, Dubya's boys are baling up money and tossing it right out the barn door: Your money. Even as you struggle to hang on to your job, your home, your car, your credit rating, your family and your dachshund, the outgoing Republican Administration is squeezing your wallet dry over the coffers of Wall Street.

Money that was supposed to go into buying up troubled assets and rescuing homeowners is going instead into the pockets of the best-heeled lobbyists and the best-connected corporations. As whole neighborhoods go under with chain-reaction foreclosures, not a dime is being spent to stop it, two months after the crisis blew up. Maybe Dubya and his cronies are too busy shredding incriminating documents. Maybe they're shopping their memoirs, like Sarah Palin. Maybe they just never gave a good godd*mn about middle-class America in the first place. In any case, this crisis is going to get a LOT worse before it gets better, thanks to Bushco.

Should we hang them? Unfortunately we can't because they write the laws. Stealing a loaf of bread from them is a capital crime. Them stealing a home, a pension, a college education from you and your kids will get 'em a $700 billion reward from the Treasury. Our Treasury. Remember, these folks don't even pay taxes. Why? Say it with me, folks: BECAUSE THEY WRITE THE LAWS!

You might think that after a huge electoral victory, we the people would be able to put a stop to this sh*t. Socialism for the rich is still socialism; only we don't get any of the goodies: We just pay for them. And pay for them. And pay for them. Until there is no more money left for socialism for us: No medical care, no college, no mass transit, no retirement. You know, all that commie sh*t.

So, write your current representatives in Congress and tell them to stop giving your money to corporations: Use it to bail out your fellow-citizens and small businesses. Do it now:

Sir:

I want my tax money to be used to rescue homeowners, small banks and local savings & loans, nobody else. Do it now, please. I will be watching to see what you do. I will remember, next election.

[Your Name]


Find & Write Your Representatives In Washington, D.C.

Senator Bernie Sanders Petition To Treasury Secretary Paulson: Fix The Problem


YAHOO NEWS
"Bush administration still working on $700B rescue"
Bush working? That's a new one!

' At a time when most administrations are getting ready to turn out the lights, the Bush administration is still struggling to get the biggest government rescue in history up and running. Treasury Secretary Henry Paulson, who is leading the effort, is facing a lot of criticism and second guessing at the moment over how well the $700 billion bailout program for the U.S. financial system is being handled. Paulson was scheduled to give an update on the effort on Wednesday. Critics are complaining that the administration is not being tough enough on the banks who are receiving the assistance, that the original centerpiece of the program — government purchases of troubled assets — has been left to languish and that homeowners struggling with mortgage foreclosures are not getting the help they need to stay in their homes. The Bush administration has already committed $250 billion of the money for the purchase of bank stock, giving financial institutions an infusion of cash that the government hopes they will use to resume more normal lending operations and address the most severe credit crisis in decades. On Monday, the administration announced that it was allocating another $40 billion as an investment in troubled insurance giant American International Group. Those decisions leave only $60 billion left to allocate of the first $350 billion in funds approved by Congress and that is before any money has been spent to buy troubled assets, which originally had been the administration's chief reason for requesting the bailout program, which Congress approved on Oct. 3. '

NY TIMES
"Lobbyists Swarm the Treasury for a Helping of the Bailout Pie"
Nice insectoid metaphor.

' When the government said it would spend $700 billion to rescue the nation’s financial industry, it seemed to be an ocean of money. But after one of the biggest lobbying free-for-alls in memory, it suddenly looks like a dwindling pool. Edward Yingling, president of the American Bankers Association, is concerned that there won’t be enough money left to help community banks once the lobbyists get their cut. Many new supplicants are lining up for an infusion of capital as billions of dollars are channeled to other beneficiaries like the American International Group, and possibly soon American Express. Of the initial $350 billion that Congress freed up, out of the $700 billion in bailout money contained in the law that passed last month, the Treasury Department has committed all but $60 billion. The shrinking pie — and the growing uncertainty over who qualifies — has thrown Washington’s legal and lobbying establishment into a mad scramble. The Treasury Department is under siege by an army of hired guns for banks, savings and loan associations and insurers — as well as for improbable candidates like a Hispanic business group representing plumbing and home-heating specialists. That last group wants the Treasury to hire its members as contractors to take care of houses that the government may end up owning through buying distressed mortgages. The lobbying frenzy worries many traditional bankers — the original targets of the rescue program — who fear that it could blur, or even undermine, the government’s effort to stabilize the financial system after its worst crisis since the 1930s. Among the most rattled are community bankers. “By the time they get to the community banks, there may not be enough money left,” said Edward L. Yingling, the president of the American Bankers Association. “The marketplace is looking at this so rapidly that those who have the money first may have some advantage.” '

YAHOO NEWS
"Critics say new federal mortgage plan not enough"
Oh, Hell, make it 700 TRILLION. It's only somebody else's money.

' Once again, the government has offered another plan to help troubled homeowners. Once again, critics say it doesn't go far enough. The plan announced Tuesday by federal officials and mortgage giants Fannie Mae and Freddie Mac sounds sweeping in its approach: Borrowers would get reduced interest rates or longer loan terms to make their payments more affordable. But there's a catch. The plan focuses on loans Fannie and Freddie own or guarantee. They are the dominant players in the U.S. mortgage market but represent only 20 percent of delinquent loans. Sheila Bair, chairman of the Federal Deposit Insurance Corp., said the plan "falls short of what is needed to achieve wide-scale modifications of distressed mortgages." With the government spending billions to aid distressed banks, "we must also devote some of that money to fixing the front-end problem: too many unaffordable home loans," Bair said in a statement. Democrats on Capitol Hill aren't satisfied, either. "When the loan is chopped up into a million pieces and any investor can block a modification from happening, a program like this will only scratch the surface of the mortgage crisis," said Sen. Charles Schumer, D-N.Y. Still, government officials had no estimate of how many homeowners would be able to qualify. Fannie and Freddie own or guarantee nearly 31 million U.S. mortgages, or nearly six of every 10 outstanding. But they have far lower overall delinquency rates — under 2 percent. One reason the problem has been so tough to solve for borrowers such as Courtney is that the vast majority of troubled loans were packaged into complex investments that have proved extremely hard to unwind. Deutsche Bank estimates more than 80 percent of the $1.8 trillion in outstanding troubled loans have been packaged and sold in slices to investors worldwide. Most of those loans won't likely be helped by the new plan. '

BLOOMBERG NEWS
"Revised AIG Terms Begin Treasury Transfusions to 'Zombie' Firms"
Night Of The Living Deadbeats

' The revised bailout of American International Group Inc. marks a new phase in the government's effort to shore up financial markets: It's the first time cash from the rescue fund Congress created last month has been committed to a failing company. The Federal Reserve, which saved the insurer from collapse two months ago with an $85 billion loan, yesterday reduced that loan and offered lower rates, while the Treasury chipped in $40 billion from its bank-rescue fund to buy preferred shares. The new terms represent a departure for Secretary Henry Paulson, who until now has said he only wants to invest Treasury funds in ``healthy'' firms. Taxpayers are ``keeping the zombie alive,'' said Robert Eisenbeis, chief monetary economist at hedge fund Cumberland Advisors and former director of research at the Atlanta Fed. ``We keep getting deeper and deeper into these holes.'' The shift is likely to vastly expand political demands for saving dying companies in the name of financial or economic stability. The administration of President-elect Barack Obama may soon have to consider credit or capital injections for other insurers, automakers, even retailers as the U.S. slides deeper into what could be the worst recession in a quarter-century. ``Are you going to do General Motors and Ford, and, if you do those, are going to go on and do retailers?'' said William Isaac, former chairman of the Federal Deposit Insurance Corp. and now chairman of the Secura Group LLC. `` Where does it stop? That is a very difficult decision we are going to face as a country.' Vincent Reinhart, resident scholar at the American Enterprise Institute and former director of the Monetary Affairs Division at the Fed Board, said yesterday's expansion of the AIG bailout shows that ``no one knows the general principles'' behind the Treasury's trouble-assets program. First, Treasury said it would buy distressed assets. Then it began injecting capital directly into banks, and now, with AIG, into troubled financial institutions. ``Now we are outside solvent institutions. If you don't have a design principle it is very difficult to draw lines,'' Reinhart said. When the Obama administration takes over the Treasury, the new leaders ``can increase the size of these programs and the scope, and say we are only following logically the Paulson plan.'' ``The Fed and Treasury are saying there should be no penalty for bad performance,'' said Walker Todd, a former Cleveland Fed attorney who is now a senior research fellow at the American Institute for Economic Research in Great Barrington, Massachusetts. ``It creates the zombie finance phenomenon. The living dead keep on walking instead of taking a decent burial.'' '

ATLANTA JOURNAL CONSTITUTION
"Bailout link to frills rebuked"
So if "frills" cost $700 billion, how much is the good stuff?

' Treasury guidelines say participants must follow compensation restrictions contained in the law. Critics say the restrictions are weak. The law says executives should not have incentives to make risky investments. It also says an executive who receives a bonus based on false financial statements must repay it. Lastly, it says “golden parachutes” are not available for the top five executives of a company. Several news organizations have published stories saying that banks receiving funds from the bailout are using them to make acquisitions. They have also reported that companies are going ahead with plans to pay dividends to shareholders and bonuses to executives. '

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