Geithner lies to America over Bank fees

Follow "State Of the Nation" original posts at Desk of Brian:

http://sites.google.com/site/thedeskofbrian/state-of-the-nation/geithnermisleadsamericaonbankfeesplantorecoupaigloss

Taxpayers from top to bottom will get a proverbial rear-ending as the government attempts to recoup losses from their bad decisions.

Attempting to save AIG is the latest debacle revisited in Washington

Reuters reports how the White House will spin penalizing large banking and finance firms as Treasury Secretary, Timothy Geithner speaks out:

"Those contracts were outrageous. They should never have been permitted," Geithner said in testimony to the U.S. House of Representatives Ways and Means Committee.

Geithner and the administration fail to acknowledge that these "outrageous contracts" were approved when the "bailout funds" were agreed upon. In fact, most of the executives at AIG were hired to work for a dollar with a bonus plan attached.

"Now, if you join with us in passing this proposed fee on our largest financial institutions, then you'll be able to say, as we do, that the American taxpayer will not pay a penny for what happened at AIG," Geithner said

Most egregious is how the taxpayers will be covering their horrible decisions. These "bank fees" and penalties will be passed on to the consumer. Building up their slush fund by highjacking money from these firms will start the whole cycle over again.

Again, we are treated like morons.

Americans need to grapple with the hard realization that recovering from this financial disaster is a long, painful process and government intervention is not the solution and in fact, deepens the pain for all of us.

http://news.yahoo.com/s/nm/20100204/bs_nm/us_usa_geithner_aig_2

President Obama's failures

Let's be clear that this list would look nearly identical if we were reflecting on the McCain administration. The differences between those two candidates were nominal in many ways and America would likely have seen similar "Big Government" mistakes with another Republican administration.

Foreign Policy & the Apology Tour

After several speeches (and a couple of submissive bows)a humble President attempted to appeased world leaders that resent America, but found little change in sentiment. Many countries see us weaker and more vulnerable now than under President Bush, even though they despise Obama less.

Intrusive Government

The fall of 2008 marked a coming together of both parties, both McCain and Obama, President Bush's administration and the treasury to unite in a financial spending and intrusion unlike anything in our history. The stimulus spending, takeover of GM/Chrysler, IMF contributions, payouts for terrorists and now health care all illustrate President Obama envisions a large, massive federal government to moderate its citizens.

Ignoring the People

Poll after poll have illustrated the people do not support a government takeover of health care. Townhall meetings, Tea Party protests and Independent voters have been marginalized and demeaned. Information is so widely accessible, yet our politicians still treat the populous as a gaggle of middle-schoolers.

Broken Transparency Promises

Broken promises and campaign rhetoric have even awaken loyal Democratic supporters to the lack of debate, closed door deals and sellouts to big business, big pharma, and others. Bills were promised to be available for days before votes yet thousands of pages of legislature has been passed without being read.

Afghanistan

Dithering over troop deployment to Afghanistan angered supporters of the war and ultimately betrayed the anti-war supporters. McCain would have had an "all in" aggressive campaign which may or may not have had any better focus or results.

Bankers, Insurance Companies, & Auto Workers are Voters Too

Demonizing businesses at every turn as well as outright penalizing them justly and unjustly has cost the President some serious political support. It will always be easy for a politicians to vilify some enigmatic figure at a large corporation while ignoring the government's responsibility or corruption in Congress.

Teleprompter reliant

President Obama is arguably the most dynamic speech giver in our history...WITH a teleprompter. When he's "off the cuff" we stutters, staggers into a dull, drab and ineffective manner. As this curtain as been pulled back, we've discovered he's not a gifted orator, but more of a professional motivational speech giver.

Terrorism

Months after trying to send a hundred or so Gitmo prisoners to Yemen for release, the Yemeni terrorist group struck on Christmas nearly killing hundreds, if not thousands. Janet Napolitano and the President did little to show Americans they are serious about fighting "man-made violence" with "overseas contingency plans."

Not a Unifier at all

Probably one of the biggest disappointments is the divisive nature of the White House and the endless blame game. The Democrats had total, absolute control of Congress and the endless in-fighting couldn't even be quelled. Americans saw through this facade as they tried to blame the Republicans as obstructionists.

A year later we are witnessing all of the mistakes of the Bush administration with a new added desire for a European style socialism. The economy's collapse is not been squelched, but prolonged by endless government spending.

Unfortunately as we look ahead, we see the same old faces, games, rules and end games.

Latest Obama tax to be passed along to you

This week the President spoke on his intentions to punish banks to recoup TARP funds and stop excessive bonuses. President Obama pleased the masses as he demonized bank executives in an effort to collect $90 billion over the next ten years.

Why is there a shortfall? Simple, from the GM, Chrysler, AIG deals that have yielded nothing in return as well as the banks that have folded without returning any government funds.

The first fact that Americans need to understand: companies are NOT taxed, only individuals because all corporate taxation is passed onto the consumer.

Translation: President Obama and Congressional Democrats are about to levy a $90 billion tax on our bank accounts and transactions.

FOX News reports:

Goldman Sachs borrowed approximately $10 Billion
Goldman Sachs paid back $11.1 Billion
Goldman Sachs has paid back 100% of loan plus interest.
Goldman Sachs will be subject to the Obama Bank Tax


General Motors borrowed approximately $85 Billion
General Motors has paid back only $3.5 Billion
General Motors still owes over $80 Billion
General Motors will NOT be subject to Obama’s Tax


Is Obama an enemy of bankers, banking or their practices?

Of course not. Robert Rubin, the famous banker from Citigroup sits at his right hand as an advisor. Countless individuals through the administration and the treasury are from Goldman Sachs and other banking entities.

This is classic "good cop - bad cop" tactics to tax Americans.

ATM fees, banking fees, transaction fees, overlimit fees, bounced check fees -- anywhere a bank can pass along their portion of this $90 billion is where it'll hit you.

Accounting for the Truth

Bank profits drive the stock market faster than other industry stocks like manufacturing. This is one reason while the banking collapse corresponded and drive the Wall Street nose dive.


So one question that has troubled me greatly is how quickly the banks have recovered from their meltdown.


I have read a few economists and heard some reference to accounting changes that now project profits for these banks that still owe the government billions.


Yalman Onaran wrote this on Bloomberg.com, compiling the inside quotes and analysis that I've been searching for: (http://www.bloomberg.com/apps/news?pid=20601109&sid=alC3LxSjomZ8):

"Analysts who have examined the quarterly profits and government tests say that accounting rule changes and rosy assumptions are making the institutions look healthier than they are. "

Accounting rule changes?

"Citigroup’s $1.6 billion in first-quarter profit would vanish if accounting were more stringent, says Martin Weiss of Weiss Research Inc. in Jupiter, Florida. “The big banks’ profits were totally bogus,” says Weiss, whose 38-year-old firm rates financial companies. “The new accounting rules, the stress tests: They’re all part of a major effort to put lipstick on a pig.”


In this article (http://www.moneyandmarkets.com/big-bank-profits-are-bogus-massive-public-deception-33228) Weiss really covers the shady books of pumping up the "toxic assets", moving their horrible performances from quarter to quarter, and the real meaning of "credit value adjustment."

From Onaran's piece:

"Further deterioration of loans will eventually force banks to recognize losses that their bookkeeping lets them ignore for now, says David Sherman, an accounting professor at Northeastern University in Boston. Janet Tavakoli, president of Tavakoli Structured Finance Inc. in Chicago, says the government stress scenarios underestimate how bad the economy may get."

One area that they are referring to is the collapse of the commercial real estate market. Businesses are closing in strip malls at a rapid pace and lendors are getting stuck with bad loans.

"Banks are writing off commercial real estate loans now at a bigger rate than in the last 20 years," said Kathy Boyle, president of Chapin Hill Advisors in New York. "It's a double-whammy. Banks have another shoe to drop on their balance sheets, and regional banks tend to have a much bigger exposure."

Goldman Sachs and JP Morgan now have political allies and ties to government policy to help shield them from the pending collapse. How can we evaluate the Stock Market without talking about politics? How can a company such as Citigroup report a profit yet owe the government, the taxpayers - you and me - 50 billion dollars?

The FDIC is running out of funds to bailout banks. But we can rest assured this isn't over. We can try to avoid the large corporate banks with the local choice, but their smaller capital makes them more vulnerable to collapse.

I don't know that I have answers, but I feel closer to asking the right questions and getting names of the economists asking similar questions.

http://www.cnbc.com/id/32085576

http://www.philly.com/philly/business/20090920_More_bank_failures_are_likely.html