Paulson Starts Virtual Soup Kitchen; Starving Bankers Grateful...

[GRG55]

The Taxpayer's Airplane...

Could the outright theft of taxpayer's money get any more blatant than this? Is anybody going to put a stop to this nonsense? Ever?

Is there a better example of just how out of touch with reality the resident nitwits of expensively renovated Wall Street executive offices remain?

Convince me they haven't had plenty of time to sell this production position...

btw: The French-made Falcon is the top tier in private jets, rivalled only by the Gulfstream 550 and, for someone who has it all, the Boeing Business Jet. This is not cheap-azz Cessna Citation...

Citi going through with $50 mln plane order-source
Mon Jan 26, 2009 4:58pm EST

NEW YORK, Jan 26 (Reuters) - Citigroup Inc (C.N), which has received $45 billion of capital from the U.S. government, is going through with plans to buy a $50 million jet...

...The bank ordered a Dassault Falcon 7X two years ago and plans to accept delivery later this year, according to a person familiar with the matter...

[GRG55]

Re: Paulson Starts Virtual Soup Kitchen; Starving Bankers Grateful...

One of the arguments often used by people who disapprove of taxpayer-funded financial support for low income earners is that a welfare state runs the risk of creating a sense of entitlement among the "lower classes".

It would seem that developing a sense of entitlement isn't restricted to the working poor...

What Red Ink? Wall Street Paid Hefty Bonuses

By BEN WHITE
Published: January 28, 2009

By almost any measure, 2008 was a complete disaster for Wall Street — except, that is, when the bonuses arrived.

Despite crippling losses, multibillion-dollar bailouts and the passing of some of the most prominent names in the business, employees at financial companies in New York, the now-diminished world capital of capital, collected an estimated $18.4 billion in bonuses for the year.

That was the sixth-largest haul on record, according to a report released Wednesday by the New York State comptroller...

...Some bankers took home millions last year even as their employers lost billions...

...Many corporate governance experts, investors and lawmakers question why financial companies that have accepted taxpayer money paid any bonuses at all. Financial industry executives argue that they need to pay their best workers well in order to keep them, but with many banks cutting jobs, job options are dwindling, even for stars.

Lucian A. Bebchuk, a professor at Harvard Law School and expert on executive compensation, called the 2008 bonus figure “disconcerting.” Bonuses, he said, are meant to reward good performance and retain employees. But Wall Street disbursed billions despite staggering losses and a shrinking job market.

“This was neither the sixth-best year in terms of aggregate profits, nor was it the sixth-most-difficult year in terms of retaining employees,” Professor Bebchuk said.

Echoing Mr. DiNapoli, Professor Bebchuk said he was concerned that banks might be using taxpayer money to subsidize bonuses or dividends to stockholders. “What the government has been trying to do is shore up capital, and any diversion of capital out of banks, whether in the form of dividends or large payments to employees, really undermines what we are trying to do,” he said...

I originally started this thread under rant & rave, as I expected outrage at the numerous egregious examples of taxpayer money being squandered for the benefit of the usual suspects...as the thread title implied. The outrage has been surprisingly muted; everyone is either in shock, disbelief, just plain fatigued, or is wisely conserving energy [emotional and otherwise] to deal with their own personal situation?

Paulson has retired to live off whatever remains of his Goldman winnings. Geithner has acknowledged what iTulip predicted...only the taxpayer has the balance sheet to absorb all the bad debt [bad bank] if the banking system is to be saved. And it's probably time for FRED to consider closing this thread as the crisis has now moved into the inevitable next stage.

[c1ue]

Re: Paulson Starts Virtual Soup Kitchen; Starving Bankers Grateful...

GRG,

Are you expecting torches and pitchforks?

What you're posting is exactly what Dr. Michael Hudson said was going to happen.

[GRG55]

Re: Paulson Starts Virtual Soup Kitchen; Starving Bankers Grateful...

GRG,

Are you expecting torches and pitchforks?

What you're posting is exactly what Dr. Michael Hudson said was going to happen.

Pitchforks and boiling oil are best left for retro horror films. ;)




I had hoped:

• that the funding for solutions would not be left entirely in the hands of some of the chief perpetrators, and without any apparent accountability to anyone;
• that the solution would not involve the concentration of even more power in the hands of those institutions that amply demonstrated they are incapable of handling their previous level of responsibility;
• that a system with too many "too big to fail" private companies wouldn't create even bigger "too big to fail" private companies;
• most of all, that the citizens of the USA would expect from their elected government representatives something more than just "hope things get better".

Even EJ seems to have become more pessimistic, what with a description of Fed policy as analogous to termites...:p

I have spent much time in the USA and criss-crossed that nation by road, and air [including several long trips piloting my own aircraft] from Seattle to Florida, Boston to San Diego, and a good deal of territory in between. As many of my posts indicate I admire many things about the USA, and remain optimistic that its best attributes will allow it to come out the other end of this mess better than many other nations. However I am resigned to the expectation that the cost and pain will be greater, much greater, than was necessary...and just as the rest of the world generally benefits from what is best about the USA, we cannot insulate ourselves from the consequences of what is worst.

[GRG55]

Re: Paulson Starts Virtual Soup Kitchen; Starving Bankers Grateful...

Couldn't resist sticking in one more link. From iTuliper Jesse...funniest thing I read today [and like all good humor highly reflective of the current reality]

29 January 2009

Goldman Sachs Says the Banks Now Need At Least $4 Trillion in Bailouts


Can we get an estimate that assumes we nationalize Goldman Sachs, Morgan Stanley, Citigroup, and J.P. Morgan, place them in receivership, selectively default on their derivatives, sell all their assets, and criminally prosecute their executive management from the year 2000 under the RICO statutes?

[c1ue]

Re: Paulson Starts Virtual Soup Kitchen; Starving Bankers Grateful...

GRG,

My own admittedly very jaundiced view is that we're going to get the pitchforks.

But not until everything really has gone to h***.

50/50 that the vehicle for this is going to be a populist firebrand like that fellow in Germany.

[GRG55]

Re: Paulson Starts Virtual Soup Kitchen; Starving Bankers Grateful...

Having repeatedly dined at the taxpayer's soup kitchen, and not only avoided hunger and malnourishment, but apparently having regained health and vigor [judging by Wells Fargo's pre-annoucement, and this article in Time Magazine] the bankers are now balking at making a small donation to their generous benefactor.

The ungrateful wretches, eh...

Wanna bet that Newton's Fourth Law of Motion and Markets [What Goldman wants, Goldman gets] comes into play yet again?

Showdown Seen Between Banks and Regulators

WASHINGTON — As the Obama administration completes its examinations of the nation’s largest banks, industry executives are bracing for fights with the government over repayment of bailout money and forced sales of bad mortgages...

...Some of the healthier banks want to pay back their bailout loans to avoid executive pay and other restrictions that come with the money. But the banks are balking at the hefty premium they agreed to pay when they took the money...

...Both large and small banks have pressed the Obama administration to make it less costly for them to exit the bailout program by waiving the right to exercise stock warrants the banks had to grant the government in exchange for the loans. At a meeting last month, the chiefs of three of the largest banks separately asked Mr. Obama to direct the Treasury not to exercise the warrants, Mr. Fine said...