On October 18, 2008, I read an interesting article in the Guardian.
It was so interesting that I blogged about it that day.
The title was Wall Street banks in $70bn staff payout.
The subtitle, even more interesting, was Pay and bonus deals equivalent to 10% of US government bail-out.
Unfortunately no one here in the States pays much attention to foreign media (they are libs) nor to my blog (the article is here, 10% of bailout money goes to... bankers' pockets, the original Guardian article is here).
So only now, 10 days later, do the voices of outrage emerge in the American media and blogosphere.
Meanwhile those who read my blog (and/or the Guardian) are way ahead.
But there is another interesting news happening now.
Associated Press: White House to banks: Start lending now.
WASHINGTON (AP) -- An impatient White House prodded banks and other financial companies Tuesday to quit hoarding billions of dollars flowing into their vaults from Washington and start making more loans.
"What we're trying to do is get banks to do what they are supposed to do, which is support the system that we have in America. And banks exist to lend money," White House press secretary Dana Perino said. While there are limits to Washington's power to affect banks' behavior, the White House decided it was time to use its bully pulpit.
"They (regulators) will be watching very closely, and they're working with the banks," Perino said.
Ohh, big words, sexy mama!
The White House is telling the banks to betta start lending money, or else! (said in a nasal gangster style from 1930's bad movies).
And, them regulators will be watching veeeerrrrry closely (said in a bad movie Nazi voice inflection - think Dr. Strangelove).
There's only one snag in all of this - you see, while the Europeans loaned err gave their banks money there was a stipulation that the money be used for certain things and not allowed to be used for certain things.
In America, we let the free market decide because government regulation is evil and socialism and commie and lib and... well, you get the picture.
So, in Yoo Ess of Ey, the president and his advisors and the FED decided to just... give the money to the banks.
Without any stipulations.
Without any rules.
Without any oversight.
"Here, take this money!", they said. Hell, they even forced banks that DID NOT want to take his bailout money to take it - because it would make the banks that did take it look bad. So the public now cannot spot which banks are bad and which are solvent and well run, as they all took the money - whether they wanted to or not.
So what is the money used for?
Again, quoting Guardian, "Pay and bonus deals equivalent to 10% of US government bail-out package"
So the bailout money is to reward the CEO's, bankers and their ilk for a job well done!
Congratulations - the bonuses this year for the bankers, managers, CEO's, CFO's are bigger than last year's!
So, other than making rich bankers even richer for a job well done, what else is the bailout money used for?
Associated Press: Uses for $700 billion bailout money ever shifting, dateline OCtober 25 2008.
WASHINGTON (AP) -- First, the $700 billion rescue for the economy was about buying devalued mortgage-backed securities from tottering banks to unclog frozen credit markets.
Then it was about using $250 billion of it to buy stakes in banks. The idea was that banks would use the money to start making loans again.
But reports surfaced that bankers might instead use the money to buy other banks, pay dividends, give employees a raise and executives a bonus, or just sit on it. Insurance companies now want a piece; maybe automakers, too, even though Congress has approved $25 billion in low-interest loans for them.
Three weeks after becoming law, and with the first dollar of the $700 billion yet to go out, officials are just beginning to talk about helping a few strapped homeowners keep the foreclosure wolf from the door.
As the crisis worsens, the government's reaction keeps changing. Lawmakers in both parties are starting to gripe that the bailout is turning out to be far different from what the Bush administration sold to Congress.
Lets see.
The reasons for the action keep changing, first being one thing, then the other, and finally people are realizing that they were sold a piece of bullshit.
This remind you of something?
WMD... reasons for Iraq War 2... meet the bailout.
Hello!
Bank executives hinted they might instead use it for acquisitions. Sen. Christopher Dodd, chairman of the Senate banking committee, said this development was "beyond troubling."
Sure enough, a day after Dodd, D-Conn., made the comment, the government confirmed that PNC Financial Services Group Inc. was approved to receive $7.7 billion in return for company stock. At the same time, PNC said it was acquiring National City Corp. for $5.58 billion.
Awwww, Doooddsy-woooobsy democrat from Conn. made some mewling noises.
Awwww, this development is "beyond troubling".
Can you remember Doooddsy-woooobsy what were the conditions of this money - our taxpayer money, MY GODDAMN FUCKING TAX MONEY - being given to the bankers?
Gee, you can't remember?
Me neither.
Because there weren't any.
Because the free market will sort it all out - no socialism for us Amrkans!
Business don't need no stinking rules or regulations, and we should trust the banks to do the right thing.
Wait a second here.
Who made this crisis?
Lets see... let me think for a second... was it perhaps... the bankers?!
So, to fix what they fucked up, we, the people of Yoo Ess Ey, decided to give you trillions of dollars... with no questions asked.
"Here, take this money!".
So, the money is used to pay the bankers bonuses, and it is also used to buy other banks.
Because if there is one thing that the crooked thieves - sorry - bankers and "investment" bankers have learned, it is that the government WILL bail out business entities which are too big to fail.
Or at least, the business entities that the government decides are too big to fail.
How big is the "not allowed to fail"?
No one knows.
So what is a banker to do with all this money that he was given?
Lend it to prospective homebuyers?
But everybody and their cat already got a loan. Who is left - the fuckers who couldn't get a loan even when EVERYBODY was getting one. That means that whoever is left now REALLY cannot be loaned money.
So, again - what is a banker to do?
Simple, of course.
Buy as much shit as possible, to make the bank bigger and Bigger and BIGGER!
Then, when the economy continues going straight to hell, the government will not allow that bank to fail - after all, they are "too big to be allowed to fail!".
So lets sum up.
The bailout money is used to pay bankers' salaries and more importantly bonuses, to the point that 10% of the bailout money is used to pay the bankers.
The bailout money is also used for banks to acquire other, smaller banks (many of whom are solvent and don't want to be taken over, BUT the big banks have all this cash now and they can simply move in and do a hostile takeover - nothing to stop them - enough cash is on hand).
So, we found out what the bailout money is used for.
What isn't it used for?
"An impatient White House prodded banks and other financial companies Tuesday to quit hoarding billions of dollars flowing into their vaults from Washington and start making more loans."
Oh, that's right!
The bailout money is not used for lending money - the whole point of the bailout!
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