Tuesday, January 13, 2009

Obama Wants To Give Away $350 Billion To Banks

And newspapers continue to call this giveaway a "bailout".

The media is running with the "Hey, hes better than Bush" angle to explain how *this* $350 billion will be better used than the first $350 billion, which was never used to buy troubled assets as Paulson insisted must happen or the whole sky would fall. No one in the media has questioned why Paulson's dire prediction about the downfall of the global banking industry (that he said would occur if no troubled assets were bought) never came to pass. No media account I have uncovered has questioned why the banks were given $350 billion in exchange for non-voting stock and said banks seemingly didn't use any of that $350 billion to lessen the credit crunch by, say, lending it to folks who wanted credit at a decent interest rate. If that did that, of course, that would end the "credit crunch" crisis that banks have created because...surprise...they are the ones who control the terms regarding how credit is issued.

Picture this.

Bank A, B and C issue loans to borrowers who cannot truly afford their mortgages (both subprime lenders and lenders whose loans are based on minimal, inconclusive or even fraudulent documentation regarding their ability to pay said loans for the life of the mortgage)

Bank A, B and C then re-package said loans and sell them amongst themselves

Real estate market implodes, houses are worth less than the amount borrowed to purchase them, ARMs start re-setting, and generally speaking, reality sets in.

Banks panic and say they are sitting on troubled assets, after they started the trouble by issuing loans they never should have issued and purchasing mortgage securities that they sold amongst themselves in a huge Ponzi scheme.

Treasury Secretary Paulson insists that the federal government are the only ones who can buy these troubled assets (replace "can" with "will" and I agree).

The House of Representatives gets screamed on by its constituents and initially refuses to pass the bailout bill

The stock market collapses because the elites can always sell off a bunch of stock and create a short term drop in the Dow

Constituents get shaken up and convince the House of Reps to pass the giveaway bill. The Senate, filled to the brim with multi-millionaires, is already on board

Paulson gets the first $250 billion.

Bush next authorizes the release of the next $100 billion

Most of it is used to buy non-voting stock in "ailing" banks, NOT to buy troubled assets

The sky does not fall.

Bush then asks for the $350 billion

The general electorate in America screams "You're nuts"

The Bush gang says "Hey, Congress, let that extra $350 billion go, so Obama can spend it, he seems trustworthy"


Here is where the cult of personality goes off the rails. Obama can read a cue card awfully well and he seems like a swell guy, but that has nothing to do with the banks "needing" this $350 billion giveaway for a bank-created emergency.

I'm against it.

I'm against Bush getting it and I'm against Obama getting it.

Come on, America. Don't let this stand.

And are there any honest journalists left willing to risk their career to fight this?

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