Hold the grammar and punctuation, just a rant with a side of huh, seriously, wtf?
As sub-title, we're sticking with: 'Dumb, Dumber and The Big Ignoramus.'
Stab at who is leading this group of brainiacs.
Some of the bailouts have been necessary. I'm gonna go ahead and put that one out there. There have been failure bailouts in so many industries that really, each one deserves to be debated on its own merits.
The airlines have been getting help for years and I'm ok with that. It's been just a few billion every few years since September 11th, and we need viable air travel so it passes.
The autos are less straightforward; you've got union issues, pension and healthcare issues from overpromising for too long, as well as serious management problems. It's made more murky by Cerberus owning Chrysler as well as 51% of GMAC. And the mammoth PE firm Cerberus is not a company that we want to be rescuing, at all. Trust me. Private Equity is a twist of the tongue from what used to be known as LBOs, leveraged buy-outs. These firms do nothing productive save enrich themselves as they drive once-stable business to the point of bankruptcy once their cash hoards have been plundered by the PE pirates. Still, given the magnitude of the rescues offered to the banks and insurers, I give a mild pass to bailouts for the autos. Though, this pass is offered with a hope that the attched conditions can help the industry get realistic about it's future obligations as well as drive the unions back into negotiations on concessions.
However, this bank stuff is another enchilada entirely. I'll give you an example I haven't written about yet but really angers me, AIG. It's a virtual black hole, around $150 billion at last check. And AIG was NOT originally going to be saved. Treasury was steadfast in saying 'no' until the final night before declaring bankruptcy, then suddenly had a change of heart. Look no further than GS for why. It turns out that goldman sachs had used AIG to hedge hundreds of billions of their asets. So if AIG went down then goldman would lose the billions it paid AIG in insurance payments on those assets in the form of CDS premiums. Their was concern for Goldman's solvency were this to have occured.
On the first day of the AIG conservatorship, goldman received a $37 billion dollar check from AIG/the taxpayer. Since then, hedge funds who also used AIG to insure their assets have received about $40 billion of your children's money. European banks and other US institutions have received the remaining $60 billion in payouts from AIG/the taxpayer.
Again, I will offer that there are reasons to save certain companies. It's the money to Bank of America, aig, goldman, citi, that really enrages me, and likely for the same damn reasons you are enraged too. I don't mind re-capitalizing the relatively good banks. PNC has gotten a bunch of cash and that's ok I suppose . After all, if you're giving our money to the banks, you had better give a fair share to the banks that didn't screw up.
But Citi, AIG and Bank of America are never-ending black holes of stupidity. BAC's acquisition of countrywide and merrill lynch has proven to be the among the most poorly considered and ill-timed bank purchases ever. Then the government, our shrewd tax stewards at work, buys the idiot who had already bought the stupid. Translated: merrill and countrywide managements were just plain dumb by nature. And then our government became leader of all brainiacs with its decision to support bank of america. And just to demonstrate that our lack of intelligence was not a fluke, please see our previous purchases of AIG, Citi as well as Phony Mae and Fraudie Mac.
Citi, AIG, and Bank of America all played a bad hand and lost, and they should fail and their shareholders and bonholders pay the price. Not the taxpayer. All three were so poorly manged that they, and their stakeholders alone, should be held accountable.
DailyBail