Category Archives: Federal bailout
The Treasury Department is preparing a Chapter 11 bankruptcy filing for struggling U.S. automaker Chrysler that could come as soon as next week, according to a New York Times report.
People with direct knowledge of the action told the newspaper that the U.S. Treasury has an agreement in principle with the United Automobile Workers union, whose members’ pensions and retiree health care benefits would be protected as a condition of the bankruptcy filing.
Wonder when GM will do the same? From the NYT writeup linked above:
Moreover, Fiat of Italy would complete its alliance with Chrysler while the company is under bankruptcy protection.
The only major question that remains unresolved is what happens to Chrysler’s lenders, who hold $6.9 billion in company debt. The government’s most recent offer, presented Wednesday, would give the company’s lenders about 22 cents on the dollar, or $1.5 billion, and a 5 percent equity stake in a reorganized Chrysler. Earlier this week, a steering committee of the lenders proposed that they receive 65 cents on the dollar, or $4.5 billion, and a 40 percent equity stake.
Officials at Chrysler and the Treasury were not immediately available for comment.
Timmy G looked a little pissed off at all the grilling he was getting.
Bennie Bernanke got down right hostile at one point. From the WaPo link above:
Earlier, Bernanke came the closest that anyone is likely to see to flashing public anger when responding to some hounding from Rep. Donald Manzullo (R-Ill.), who was demanding a “simple yes or no” from Bernanke, Treasury Secretary Tim Geithner and N.Y. Fed President Bill Dudley on a complicated matter.
“Not one of you three can give me a yes or no?” Manzullo thundered.
“That’s because it’s a poorly posed question,” Bernanke zinged back. Naturally, Bernanke’s facial expression remained unchanged.
The members of the committee, especially Maxine Waters, were not in a happy place today. They looked and sounded highly pissed off. Ms Waters is a democrat, but that didn’t stop her from going off on Geithner.
You can read Bernanke’s opening statement here.
Oh, and I finally got Sirens Chronicles back to normal, graphics and all. Happy Happy Joy Joy! 😉 I am checking on strengthening the security on the site.
Both parties deserve credit for hosing up the banking, credit and financial markets. Mother Jones has a very nice timeline that shows all the changes made to our laws and regulations, starting with of course the 1913 Federal Reserve Act which created our national banking system. The timeline points fingers at the executive branch and the congress critter that wrote the bills and/or regulations that slowly put us into this very large shithole we find our nation in now.
Nomi Prins, a former Wall Streeter who worked for Bear Stearns, has her take on wtf went down here. Ms. Prins lays the blame at many feet, among them:
Newt Gingrich. The 1994 Home Ownership and Equity Protection Act was the birth of the sub-prime lending. I have never liked Newt, and in many ways he reminds me of Weathervane McCain.
Phil the fuckwit Gramm and his infamous Enron Loophole within the Commodity Futures Modernization Act of 2000 . Need I say more?
The failure of Congress to pass the Predatory Lending Consumer Protection Act of 2001.
Pointing fingers now will only serve to show us where not to go from here on out. I am not a financial guru and have never claimed to be, but it isn’t rocket science to say what and who screwed the pooch.
MoJo has a piece up by James Ridgeway entitled; How to fix it, take the Fed Public. In it he says the following, which some might construe as gasp…socialism!!! :
What form could a Fed overhaul take-if Congress and the next president had the guts to do it? One option would be to make the bank part of the Treasury Department, a scheme that has been floated by various economists. Under such a plan, the Fed would be subject to congressional oversight and the heads of the regional Federal Reserve banks-who wield considerable power through the Federal Open Market Committee, which sets key interest rates-would become government appointees as well.
A move to Treasury, points out William Greider, author of Secrets of the Temple: How the Federal Reserve Runs the Country, would place the body that functions as the fulcrum of the national economy firmly within the constitutional system of checks and balances. “The grand bargain that ought to be pursued is more leverage for more accountability,” says Financial Markets Center founder Tom Schlesinger.
As a socialist-minded progressive, I don’t mind this idea one damn bit. Ridgeways piece is short but chock full of interesting information. I still say its quite simple….if you socialize the losses, so too should the profits go back into the Federal ‘kitty’. Fuck those free market sons of bitches.
They won’t tell us what the agreement is of course, which is total and complete bullshit. Jon Tester, a blue dog btw, had some choice words during one of the hearings this week, and I agree with him. From the NYT:
“I’m a dirt farmer,” said Senator Jon Tester, the Montana Democrat who still lives on his family homestead. “Why do we have one week to determine that $700 billion has to be appropriated or this country’s financial system goes down the pipes?”
My question is why are the Dems rushing to judgment? Why can’t they ask some hard questions and demand answers before they sign on the dotted line? Again, from Tim Egan’s blog on the NYT:
There is certainly a food chain of greed, from the lowliest house-flipper in the Southern California exurbs to the Hamptons hedge fund manager. We all put reason in a box and buried it for a time. But before $700 billion is committed to a secretary whose decisions “may not be reviewed by any court of law or any administrative agency,” as the original draft of the bailout states, it’s worth remembering where the biggest heist took place, and how Wall Street dragged down the rest of the country once before. You could hear the echoes of history in Tester’s question, riding the fierce urgency of now at a time when the Great Depression and all its gloomy atmospherics are in the air again.
Five bucks says the folks losing their homes, or those little stockholders or mom and pop investors won’t get any protection in this ‘bailout package’, just the greedy bastards that caused it. Jon Tester and I probably agree on very little, but I trust him on this issue. From The Great Falls Tribune:
Tester said he’s worried about the nation’s financial health and stays awake at nights thinking about it.
“A lot of people’s investments in the future are tied up in the financial markets, and we’ve got to try to make sure that the folks who invested honestly are secure,” he said. “The way we originally got here is because of greed and speculation, and we need to make sure that the people who pay the price are the greedy buggers and the speculators.”
We need to protect the honest folks and fuck those greedy bastards like they have been fucking us. And rushing to judgment will only mean this isn’t the final word on bailing out these assholes, Tester again:
“I fully feel the urgency. Every time we’ve made a spur-of-the-moment decision that we didn’t do our due diligence on, it has been a wreck, but the truth is, we have to be given the time to do this right, or you’ll be up here in a year or two asking for another $700 billion or more,”
Amen brotha, a-fucking-men.