Geithner and the Banks-Something Very Weird Here

[Kathianne]

They are trying to tank the banks, my guess so the government will end up 'owning' it:

http://news.yahoo.com/s/ap/20090421/ap_on_bi_ge/us_banks_stress_tests/print;_ylt=AtJ.vCPoiYXhYoGMoxmF9FeX.aF4;_ylu=X3oDM TB1MjgxN2UzBHBvcwMxNARzZWMDdG9vbHMtdG9wBHNsawNwcml udA--


AP Exclusive: Fed tests harder on regional banks

By DANIEL WAGNER, AP Business Writer
1 hr 1 min ago

WASHINGTON – The government's "stress tests" of 19 large banks take a harsher view of loans than of other troubled assets, according to a Federal Reserve document obtained by the Associated Press. That approach favors a few Wall Street banks while potentially threatening major regional players. Regulators will use the tests to determine which banks are healthy, which need more capital and which might fail if the recession worsened.
The Fed is scheduled to detail its methodology for the tests on Friday and release the results May 4.

The regulators' focus could spell trouble for big regional banks undergoing the tests. Their portfolios have more individual loans and fewer of the big pools of securitized loans that Wall Street giants specialize in....

The 'regional banks' are the ones that have not been in great trouble, even months ago. Many were forced to take the TARP such as Northern Trust and 5th/3rd. Now however, it appears the government is going to be non-transparent regarding the zombies, but lay these other institutions, who've been trying to give back the money they didn't want out to dry.

[Yurt]

who and how was any bank "forced" to take the tarp loans?

[Kathianne]

who and how was any bank "forced" to take the tarp loans?

Early on:

http://www.valueplays.blogspot.com/2008/10/wells-fargo-forced-into-tarp-plan.html

More recent:
http://online.wsj.com/article/SB123879833094588163.html


Obama Wants to Control the Banks
There's a reason he refuses to accept repayment of TARP money.
By STUART VARNEY

I must be naive. I really thought the administration would welcome the return of bank bailout money. Some $340 million in TARP cash flowed back this week from four small banks in Louisiana, New York, Indiana and California. This isn't much when we routinely talk in trillions, but clearly that money has not been wasted or otherwise sunk down Wall Street's black hole. So why no cheering as the cash comes back?

My answer: The government wants to control the banks, just as it now controls GM and Chrysler, and will surely control the health industry in the not-too-distant future. Keeping them TARP-stuffed is the key to control. And for this intensely political president, mere influence is not enough. The White House wants to tell 'em what to do. Control. Direct. Command.

It is not for nothing that rage has been turned on those wicked financiers. The banks are at the core of the administration's thrust: By managing the money, government can steer the whole economy even more firmly down the left fork in the road.

If the banks are forced to keep TARP cash -- which was often forced on them in the first place -- the Obama team can work its will on the financial system to unprecedented degree. That's what's happening right now.

Here's a true story first reported by my Fox News colleague Andrew Napolitano (with the names and some details obscured to prevent retaliation). Under the Bush team a prominent and profitable bank, under threat of a damaging public audit, was forced to accept less than $1 billion of TARP money. The government insisted on buying a new class of preferred stock which gave it a tiny, minority position. The money flowed to the bank. Arguably, back then, the Bush administration was acting for purely economic reasons. It wanted to recapitalize the banks to halt a financial panic.

Fast forward to today, and that same bank is begging to give the money back. The chairman offers to write a check, now, with interest. He's been sitting on the cash for months and has felt the dead hand of government threatening to run his business and dictate pay scales. He sees the writing on the wall and he wants out. But the Obama team says no, since unlike the smaller banks that gave their TARP money back, this bank is far more prominent. The bank has also been threatened with "adverse" consequences if its chairman persists. That's politics talking, not economics.

Think about it: If Rick Wagoner can be fired and compact cars can be mandated, why can't a bank with a vault full of TARP money be told where to lend? And since politics drives this administration, why can't special loans and terms be offered to favored constituents, favored industries, or even favored regions? Our prosperity has never been based on the political allocation of credit -- until now.....

[Yurt]

i still don't see who was "forced" to take the money....your first link tried to make this a mafia godfather scene...


After Mr. Kovacevich voiced his concerns, Mr. Paulson described the deal starkly. He told the Wells Fargo chairman he could accept the government's money or risk going without the infusion. If the company found it needed capital later and Mr. Kovacevich couldn't raise money privately, Mr. Paulson promised the government wouldn't be so generous the second time around.

then go without...unless you are claiming, by giving me this link, that the government said take this deal or die....

did the government say, if you don't take this deal, you will not live....

i want to know who our government forced or gave loans in order to provide protection

and i want to know who those government officials are....

[Kathianne]

i still don't see who was "forced" to take the money....your first link tried to make this a mafia godfather scene...



then go without...unless you are claiming, by giving me this link, that the government said take this deal or die....

did the government say, if you don't take this deal, you will not live....

i want to know who our government forced or gave loans in order to provide protection

and i want to know who those government officials are....

The government, under Bush mind you, basically told the bank if they didn't take the money, they could look forward to a series of yearly public audits, yeah, pretty Godfather like...

[Yurt]

The government, under Bush mind you, basically told the bank if they didn't take the money, they could look forward to a series of yearly public audits, yeah, pretty Godfather like...

what? do you have link for this?

[Kathianne]

what? do you have link for this?

http://online.wsj.com/article/SB123879833094588163.html


APRIL 4, 2009
Obama Wants to Control the Banks
There's a reason he refuses to accept repayment of TARP money.
By STUART VARNEY

I must be naive. I really thought the administration would welcome the return of bank bailout money. Some $340 million in TARP cash flowed back this week from four small banks in Louisiana, New York, Indiana and California. This isn't much when we routinely talk in trillions, but clearly that money has not been wasted or otherwise sunk down Wall Street's black hole. So why no cheering as the cash comes back?

My answer: The government wants to control the banks, just as it now controls GM and Chrysler, and will surely control the health industry in the not-too-distant future. Keeping them TARP-stuffed is the key to control. And for this intensely political president, mere influence is not enough. The White House wants to tell 'em what to do. Control. Direct. Command.

It is not for nothing that rage has been turned on those wicked financiers. The banks are at the core of the administration's thrust: By managing the money, government can steer the whole economy even more firmly down the left fork in the road.

If the banks are forced to keep TARP cash -- which was often forced on them in the first place -- the Obama team can work its will on the financial system to unprecedented degree. That's what's happening right now.

Here's a true story first reported by my Fox News colleague Andrew Napolitano (with the names and some details obscured to prevent retaliation). Under the Bush team a prominent and profitable bank, under threat of a damaging public audit, was forced to accept less than $1 billion of TARP money. The government insisted on buying a new class of preferred stock which gave it a tiny, minority position. The money flowed to the bank. Arguably, back then, the Bush administration was acting for purely economic reasons. It wanted to recapitalize the banks to halt a financial panic.

Fast forward to today, and that same bank is begging to give the money back. The chairman offers to write a check, now, with interest. He's been sitting on the cash for months and has felt the dead hand of government threatening to run his business and dictate pay scales. He sees the writing on the wall and he wants out. But the Obama team says no, since unlike the smaller banks that gave their TARP money back, this bank is far more prominent. The bank has also been threatened with "adverse" consequences if its chairman persists. That's politics talking, not economics....

[Yurt]

that is crazy

[Kathianne]

that is crazy

And now Obama et al are changing the preferred stock to common, giving the US gov't voting privileges in 'private' banks, that were forced to take gov't money, that they didn't want or need.

[emmett]

And now Obama et al are changing the preferred stock to common, giving the US gov't voting privileges in 'private' banks, that were forced to take gov't money, that they didn't want or need.


Very dangerous! Can you believe this is even happening?

[Kathianne]

Very dangerous! Can you believe this is even happening?

I've never been a 'conspiracy' person, quite the opposite. In this case, the actions are forcing me there. Between the banks and what seems to be manipulations of the stock market, well...

[Agnapostate]

What was Rush calling them? "Possess tests"?

In any case, federal governmental ownership of banks cannot be sustained for any significant period of time. Any legitimate nationalization would necessarily require subsequent mutual credit banking at a decentralized level to remain functional. I would suggest a steeply progressive capital assets tax be imposed until such a period wherein nationalization and subsequent decentralization can be established. The same goes for other segments of the means of production that have been mismanaged by their masters amongst the financial class.

[Kathianne]

Drying up the money supply?

http://www.ibdeditorial.com/IBDArticles.aspx?id=325207949387991


Why Is Venture Capital Under Assault?
By SCOTT S. POWELL | Posted Tuesday, April 21, 2009 4:20 PM PT

President Obama and Treasury Secretary Geithner recently declared a need to regulate venture capital firms on the grounds they pose systemic risk to our economy. Nothing could be further from the truth.
Venture capital is focused almost entirely on new technologies of small startup companies, the failure of which assuredly has no effect on the larger economy.

Not only does venture capital in Silicon Valley and elsewhere pose no systemic risk, it provides an essential engine of value-added innovation, invention and job creation. Perhaps more than any other differentiating attribute of American capitalism, venture capital makes our model the envy of the world.

Favors Big Business

So why would the Obama administration say they want to regulate venture capital firms? Some suggest that it may be an end run in the undeclared war on wealth because venture capital can create enormous fortunes outside of taxable income. But there are several other plausible answers....

[Kathianne]

Why the banks first? This is why:

http://online.wsj.com/article/SB124035637935940943.html


OPINION: BUSINESS WORLDAPRIL 22, 2009
GM Is Becoming a Royal Debacle
By HOLMAN W. JENKINS, JR.

It's good to be the king -- until you start tripping over your own robe.

So King Barack the Mild is finding as he tries to dictate the terms of what amounts to an out-of-court bankruptcy for Chrysler and GM. He wants Chrysler's secured lenders to give up their right to nearly full recovery in a bankruptcy in return for 15 cents on the dollar. They'd be crazy to do so, of course, except that these banks also happen to be beholden to the administration for TARP money.

Wasn't TARP supposed to be about restoring a healthy banking system? Isn't that a tad inconsistent with banks just voluntarily relinquishing valuable claims on borrowers? Don't ask.

Kingly prerogative also conflicts with kingly prerogative in the case of GM's unsecured creditors, who are the sticking point in agreeing to a turnaround plan by the drop-dead date of June 1. His retainer, Steven Rattner, has delivered word that the king's pleasure is that these unsecured creditors give up 100% of their claims in return for GM stock.

It may also be the king's pleasure, he advised, to convert at some point the government's own $13 billion in bailout loans into GM stock....


Guess who will pick up the tab for a crushed GM and the banks? Yep, our kids and grandkids.