Checks balanced

I'm having a hard time playing optimistic after that last post, but I caught a good story today too...

In spite of Citigroup's success in exchanging re-election donations for feigned ignorance at the executive branch, the judicial put a bitta smackdown on their asses today.

The SEC, who is appointed by representatives of the people to keep the stock market humming along for the good of the people made a deal with Citigroup. This deal was to close the books on their part in a massive toxic mortgage scam. The deal looks like this:
Citigroup sold $1 BILLION in bunk mortgages to its customers. Knowing they were bunk and unlikely to be re-paid, Citi bet against them.

The investors lost $700 MILLION.

Citi earned $160 MILLION. (Good to be 'in' on it!)

In exchange for this blatant disregard of both ethics and rules, the SEC was going to charge Citi with negligence and fine them $285 MILLION.

Negligence... Well, I guess they should've tried harder to not screw their own customers over.

Luckily, this plea deal from the Executive had to be checked over by the Judicial. And, apparently, Citi was unable to bri*ahem* lobby Federal Judge Jed "Not on My Watch" Rakoff into seeing this as a fair and reasonable punishment for a billion dollar scandal.

(Think maybe the fine was fair? Let me take a shot at illustrating this. When a man is arrested with a kilo of heroin, they don't just take 250 grams of it and tell him he is a *bad* man, that he should have a nice day, and if he is ever in need of a job he's always welcome at the station. No. They take ALL the heroin, everything the guy owns and throws him in jail for at least a significant portion of his life.)

Judge Rakoff decided he thought maybe a closer look was necessary. He said:
"The court concludes, regretfully, that the proposed Consent Judgment is neither fair, nor reasonable, nor adequate, nor in the public interest"
"Although this [settlement] would appear to be tantamount to an allegation of knowing and fraudulent intent... the SEC, for reasons of its own, chose to charge Citigroup only with negligence"

Now THAT is some good solid judgin'...

THIS is whyipaytaxes.
read more:Citigroup-SEC $285m toxic mortgage deal rejected(bbc)

Of the people, but not for the people

This is it, folks... We've lost control of our government.

You guys will remember this little thing we liked to call the TARP, right? Everybody got their britches in a bundle over the "unprecedented" amount of $700 BILLION to be loaned to Wall Street to ostensibly avoid worldwide economic collapse.. Nobody liked it, but at that time, Bush was the lamest of ducks with at least one foot out the door and something [supposedly] HAD to be done.

That the economy eventually collapsed in every realistic and measurable way is irrelevant, but I certainly had to bring it up.

Notice my use of the quotes around "unprecedented" in the paragraph above. I use these quotes because there was plenty of precedence. In fact, the very same banks we bailed out were already into us for a LOT more than $700 BILLION at that time!

Prior to the TARP, the Fed had already made loans to the banks at a total cost that amounted to $7.77 TRILLION! In your face, puny little $700 BILLION.

Bullet points. Too frustrated to make paragraphs:

Magnitude

• $7.7 TRILLION is more than half the value of everything our country produced that year
• Our 6 largest banks turned their share into $13 BILLION in profit
• Morgan Stanley alone borrowed enough ($107 BILLION) to pay off a tenth of nation's delinquent mortgages
• Bank of America took $91.4 BILLION of these secret loans while simultaneously taking $45 BILLION from the TARP funds
• Banks that were declared too big to fail grew even larger
  
• Our largest banks enjoyed more profits in the last 2.5 years than they did in the 8 years preceding the crisis
• All the while, they continue to spend MILLIONS lobbying to derail or weaken laws designed to keep them in check
  

Transparency

• The loans to the banks were undisclosed
  
• The profits earned by the banks were undisclosed
• Shareholders, the "owners" of the banks were not told (Where did the profits go?!?)
  
• Taxpayers, the people that have given the authority to the Fed to watch over our money were not told
• Congress, which was actively writing an overhaul to our financial regulatory system was not told
• These loans were provided with no protections or guarantees for the taxpayers
  

THEY LOANED OUR MONEY VALUED AT MORE THAN HALF OF EVERYTHING OUR COUNTRY CAN MAKE IN A YEAR TO PRIVATE COMPANIES WITHOUT EVER TELLING ANYONE! The Fed knew, the Bank Managers knew. Not even the owners of the banks knew!

THIS is whyipaytaxes.
read more:Wall Street Banks Earned Billions In Profits Off $7.7 Trillion In Secret Fed Loans Made During The Financial Crisis(tp)

Our support of major utility companies

Just an interesting graph to share...

Not only are these 13 fabulous companies NOT paying a dime in taxes, but they are actually receiving our tax dollars to support their operations.

I suppose... With only $4.8 billion in profits, they need our tax money more than the schools do...

THIS is whyipaytaxes.
Read more: You’re paying taxes, so why aren’t energy companies?(reuters)

It ain't tricklin' down folks!

According to the Congressional Budget Office, since 1979:
After-tax income increased by 275% for the wealthiest 1% of Americans
After-tax income increased by 18% for the poorest 20%

in 2005-2007, right before the Great Recession, the top 20% of the population earned more after-tax income than the entire bottom 80%...

The obvious case that some will make in light of these statistics is that they deserve it. They work harder, they make the right decisions.
Am I to believe that I am that much lazier and that much more ignorant?It feels like I work really hard every day; I'm certainly very tired at the end of a day...
I certainly don't see a 275% increase in my after-tax income ANYtime soon.

Maybe the wealth isn't trickling back down after all...

Don't get me wrong... I don't feel entitled to an increase in my income. If you think about it on a world wide scale, I live a pretty fantastic life full of wonderful toys and comforts beyond the wildest dreams of billions of people.

What drives me nuts is that a vast amount of the 'wealth' in this country has been pooled among 1% of Americans and they have turned our elections into a war of campaign donations while appointing themselves to positions of power so they can use tax payer's money to 'bail' each other 'out.'

They've even stopped paying a reasonable amount of taxes. Again, don't get me wrong, I'm a staunch opponent of high taxes for everyone and loathe big governments.

Alas, we all have to pay our share of taxes to keep the system going. It wasn't until GE paid absolutely $0 (ZERO) in taxes on $5.1 BILLION in profits in 2010 that I realized maybe, just maybe, not everyone was paying their share of taxes.

The statistics from our own government:
http://www.cbo.gov/ftpdocs/124xx/doc12485/10-25-HouseholdIncome.pdf

Outra GE ous

Steve Breen

A Bailout I Can Get Behind

Bush tax cuts remain in effect. $859 BILLION is the cost.

In this case:
cost = not taking $859 BILLION from us

read more: US tax cuts: Obama signs compromise deal into law(npr)

More surgery for Dick!

Ex-Vice President Cheney in hospital with chest pains(bbc)

I'm only going to say one thing:
We've spent more taxpayer dollars on heart surgeries for this guy than some of us will pay in for our entire lives.

THIS is whyipaytaxes.

Thain to destroy CIT next

If you're anything like me, you'll suddenly discover that a thin layer of slime has covered you while reading this story: Former Merrill Lynch boss appointed CIT chief (bbc)

I'm not going to spend much time explaining why John 'How About Some Bonuses!' Thain costs taxpayer dollars. I already have. (twice)

But I will say this: He's gonna fit right in at CIT. These people know a thing or two about making taxpayer money disappear. Literally.

THIS is whyipaytaxes.

It should be mentioned that they are paying this man $6 MILLION a year. Some of that pay is in delayed stock but I'm not sure that is an appropriate amount to pay someone whose previous position was at the helm of a company he drove into the ground while lying to the shareholders in order to ensure BILLIONS of dollars in bonuses for him and his cronies.

Trading down

I was afraid of this. I've been complaining of the dolts who accidentally hiked into iran a few months ago. The fact that our State Department has to spend the time, money and political capital to get these assholes back blows my mind. There's a reason I've never accidentally hiked into Iran: Because I know better than to put myself in a position where that might happen.

Now, in addition to being a strain on State, there is a very likely chance that there will be a prisoner swap to get these people back. Iran'll get important comrades-in-arms, we'll get three douchebags who will end up writing books about the ordeal, having launched themselves into the spotlight.

THIS is whyipaytaxes.

Tell me more about the TARP

Thank heavens... Our government has finally decided that it might be in their interest to look into why just a few of our officials were able to funnel $180 BILLION of taxpayer money into AIG. Apparently some documents have come to light that were not submitted to the TARP Auditor.

AIG needed this money because they decided early on to pay the face value on their policies long after it was discovered that the face values were fictitious numbers made up by people who were content to drive their employers out of business in exchange for bonuses.

AIG paid much of this money to the folks at Goldman Sachs.

Goldman Sachs is the former employer of the few officials who funneled the $180 BILLION into AIG.

While I may be a bit taken aback by the fact that out of an entire country full of people, the only place we can find employees for the Fed and Treasury is Goldman, I'm not implying any dirty goings on. I don't know what happened and I don't know what decisions were made under duress, what decisions were about as wise as could be expected considering what they knew at the time and the tremendous pressures they faced.

I am a bit curious to know why those few officials did not provide all the information they had to the TARP auditor, why some documents are just coming to light now. Perhaps these documents were overlooked.

What I AM saying: Its a heck of a coincidence and it doesn't hurt to take a look at what really happened in the heat of the moment.

THIS is whyipaytaxes.

Upgradin'

Another story I missed from long ago. As it turns out, they've extended the $8,500 a pop we've all been spending on a few of us who can buy houses.

But wait, its even better this time... We're also giving $6,500 to existing home buyers so long as they've lived in their current home for 5 of the last 8 years.

Yes. Not only are we using the general fund to help people become homeowners, but now we are also using it to help people who have become bored with their current homes.

Houses for those more fortunate than I...

THIS is whyipaytaxes.

From many, to few: Home Edition

Congratulations fellow non-home owning taxpayers! It appears that we will once again be able to spend our hard earned taxes on something that will have absolutely zero benefit to us! Yay!

I tried. I tried to be a liberal. I've always been a conservative at heart after growing up in an area that was heavily supported by state welfare checks. But I like people and think that everyone having a fair shake in life is a noble cause. And, for some crazy reason, I don't think that the whole world should believe in the same god as me. Which, as we all know, if you don't believe in Rush's god, then you don't belong in the republican party.

But to announce that billions of taxpayer dollars should be spent on tax credits for people who make their home more energy efficient blows my mind. These people already have homes! By no means does that make them rich, but what the hell do I care if someone 5 states away decides to re-insulate their attic next summer? Why does money, given to the government by all taxpayers, need to get spent on a select portion of the rest? We've already given them significant tax breaks when they bought the home. We've already bought and installed energy efficient windows for them in 2009.

Hell, I'd feel better if we were to create a plan where we help people with inefficient homes buy better homes so we can move some homeless people into the old homes. Next time you find yourself complaining about a drafty window, think about how drafty a cardboard box under an overpass must get! [en: I'd feel better, but I'd still be bitchin' about it...]

This plan is not official and was merely a suggestion by POTUS. One who apparently thinks that hiring a handful of illegal immigrant carpenters to install doors made in China so that homeowners are more ready to heave a sigh of contentment is a good way to stimulate the economy.

Still better than George W[MD] Bush!

THIS is whyipaytaxes.

Read more: Obama’s ‘Cash for Caulkers’ May Help Insulation Sales, Dow Says (BLOOMBERG)
P.S. - Well, fucking bully for Dow!

Cash for clunkers on a grand scale

I was waiting for someone to figure it out. The first calculation I found comes from the Rochester Institute of Technology:

Every vehicle GM sells costs $12,200 of taxpayer money.
Every vehicle Chrysler sells costs $7,600 of taxpayer money.

Meanwhile, for every vehicle Ford sells, they don't expect you and I to pay their expenses. After all, they are a for-profit PRIVATE company. Unlike Chrysler and GM.

Don't get the math wrong, I'm sure there is a bit of forecasting and estimating going into those numbers. Its not like the costs will go up every time they make a sale, in fact, the more they sell, the less per vehicle cost of the tax burden. I just found it shocking that a reasonable estimate sets the cost of producing cars HIGHER than the MSRP!

Government subsidized auto industry...

THIS is whyipaytaxes.

read more: Each GM car sold costs taxpayers $12,200, RIT says (RBJ)

Interest swaps

Its a damn fine thing that we were able to bail out the banks long enough to for them to come calling on the bogus investments they sold to us as interest swaps and whatnot.

Follow the money:
Banks sell interest swaps to government agencies, pensions, school districts, and others that use taxpayer money to pay their bills. The idea is that they'll magically get lower interest rates on money borrowed because this banker in a really nice suit told them it would.
taxpayers 0 Banks 1

Suddenly, that very same banker almost goes out of business. A true travesty of justice as we picture him trading in that really nice suit to feed his family. Instead of letting them realize the consequences of their failures, our government uses taxpayer money to pay their bills for them.
taxpayers 0 Banks 2

Now that everything is running smooth, it comes time to think about how big of a bonus the banker in a really nice suit will get. Wait a minute, I know. He can tell all his interest swap customers that not only did they not get the lower interest rates, but things are so tough out there that they suddenly owe the banks MILLIONs of dollars.
taxpayers 0 Banks 3

Thats right. A fabricated product did not perform as promised. Though rather than losing your investment in the product outright, you actually owe more now!

THIS is whyipaytaxes.

read more: Auditor general looks to ban swaps(marketplace)

So long and thanks for all the cash

With the collapse of CIT was the elimination of any hope of getting the $2.3 BILLION taxpayers gave to them under Dubya's TARP fund.

You kinda gotta wonder where all that cash went... I mean, I know you're not supposed to. Its easier if you just don't think about it and try to forget it while wondering what team Brett Farve is playing for this week.

But... You kinda gotta think about it... That's a lot of money to give to someone who 3 months later comes to you and says paying you back just isn't gonna work out for him anymore.

Maybe we should be breaking some knees...

THIS is whyipaytaxes.

My cash, for your clunker

The Senate has approved another $2 BILLION for the CARS program. (read more)

Much like all the other schemes giving away the tax money we all pay to only a select few who qualify, this is getting ridiculous. Lucky are the douchebags who both purchased a shitty gas guzzling vehicle more than a year ago AND can afford to buy a new car now...
I, for one, could afford a new car now, especially with $4,500 of your money, but the piece of junk sable in my driveway, a true clunker, is rated at 19 miles per gallon, so I don't qualify.

For those of you who think we're saving the environment:
1.) In certain circumstances, businesses are getting the credit with as little as a 1 mile per gallon improvement in fuel economy over the traded in vehicle. (read more)
2.) I for one can't wait to find out that the entrepreneurial spirit amongst the car dealerships and scrap yards is alive and well in the U.S. as it is in Germany. They've been running their own Cash for Clunkers program for most of this year. This week, their law enforcement shut down their program after finding containers of 'clunkers' ready to ship to Africa to be re-sold. Rather than getting these clunkers off the road, we're simply putting them on other roads, and allowing the dealerships and scrap yards to double dip the profits. (read more)

For those of you who think we're saving our economy:
1.) Now that dealerships are moving their old inventory under this program, the price of vehicles is going up again, making it harder for most folks that can buy a car to get a great deal.
2.) I don't have facts and figures, but I heard a story on NPR that in Germany, Toyota has outsold all other vehicles in their cash for clunkers program. The statistics in the U.S. aren't yet available, but I'm sure its not all American made cars being sold.

Taking from many, giving to few...

THIS is whyipaytaxes.

Fine

Bank of America gets $25 BILLION from taxpayers to facilitate the purchase of Merrill Lynch.

In spite of promising its shareholder it wouldn't, BOA summarily gave $3.6 BILLION of it to the management team at Merrill, apparently for the real bang up job they did driving it out of business.

Now, rather than letting the investigation of this douchebaggery unfold, BOA is settling with the government for $33 MILLION.

Not bad. $33 MILLION to cover up a $3.6 BILLION dollar scam. Not bad at all.

THIS is whyipaytaxes.

read more: Bonus fine for Bank of America(bbc)

Commercials

So, do you all love the new GM commercials we've created? We're really running the Chevy commercial trying to clear out all '08 and '09 models frequently and that one about gigantic GMC trucks is a hoot!

Hell, I'm just glad we're past the point where GM was blowing sunshine up our asses about how they weren't going out of business, they were getting down to it.

Yes. I realize that it is reasonable and necessary for GM to start running commercials again, especially if we ever want GM to pay the government back for ensuring the livelihood of it as a private enterprise. However, it will be a looong time before I'll stop bitching about everything GM does as a ward of the state.

THIS is whyipaytaxes.

To the rescue

No thanks to the government who has poured lavish amounts of taxpayer dollars into its competitors, it seems as though CIT will not have to file for bankruptcy this week. Apparently the bondholders have decided to double down and buy some more bonds that will then be exchanged for equity.

Why its good:
1.) Now, small and medium businesses across the country should be able to stock their shelves for the holidays instead of having a going out of business sale for the holidays.
2.) This should make it possible for CIT to pay back the $2.33 BILLION we gave them under the TARP.
3.) Apparently the credit markets are moving a bit again if they were able to drum up what they needed to get by.
4.) Banks are saving themselves without handouts from the government! (Was I premature in my bitching? Did our leadership say no because they knew CIT didn't really need it? I have my doubts; I'm still pretty certain that it was a matter of not having any close friends/ex-employees in the administration...)

Now, if only there was a way to get the CEO to loosen his death grip on the company and bring it back around to a fully functioning bank...

THIS is whyipaytaxes.

read more: CIT Grabs a Lifeline(tbm)

Conflicts of cozy interests

Am I the only one uncomfortable with the White House Chief of Staff sitting in on JPMorgan Chase's board meetings?

In an era where our federal government is handing out taxpayer dollars to private entities, picking and choosing which banks should fail and which banks will succeed, it seems wrong to have government officials at the highest levels getting so cozy with one particular bank. I'll bet that CIT wouldn't be forced into bankruptcy if they too had the opportunity to have the President's right hand man over for a visit...

I would guess this: Investing in JPM stocks is probably a pretty safe bet over the long term, 'cause they are apparently going to continue to get what they ask for...

THIS is whyipaytaxes.

read more: In Washington, One Bank Chief Still Holds Sway(nyt)