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« New Bank Bailout Bloomberg Video: Complete Interview With Bank of America CEO Ken Lewis. Broadcast Feb.25 | Main | Investment Bank Bailout: PBS Videos: Charlie Rose Interviews Morgan Stanley Chairman and CEO John Mack. Broadcast Monday Feb. 23 »
Wednesday
Feb252009

Bank Bailout Abuse Caught On Tape: TMZ & NBC Videos: Northern Mis-Trust Responds To Allegations Of Wasteful Behavior On The Taxpayer Dime. Millions Spent In 7 Day PGA Tour and Oscar Extravaganza

This 2 minute clip is Bloomington, Indiana native David Shuster with his take on the outrage in a segment called Hypocrisy Watch.

Pooled capital is back as Northern Trust makes the Erin Burnett bogus claim that no taxpayer bailout funds were utilized for their recent high-profile corporate events.  TMZ first broke the story yesterday that Northern Trust Bank, a recipient of $1.6 billion in taxpayer largesse from the first round of the government bailouts (TARP 1.0), spent over $10 million throwing lavish parties for employees and clients as part of their sponsorship of a PGA Tour event last week in Los Angeles.  Here are some of the details: as lead sponsor of the golf tournament, they ponied up over $5 million in prize money; an additional $5 million was spent on concerts by Sheryl Crowe and Chicago, luxury gifts from Tiffany plus 7 days of parties and resort lounging for hundreds of guests and employees. 

After the recent outrage over corporate-shindig malfeasance by AIG and Wells Fargo, one would think Northern Trust might have cancelled this golf-event sponsorship, around the time they decided to accept operating capital from you.  Instead, they forged ahead with Phil and Oscar, and now, in response to the growing outrage from taxpayers and Congress, they offer the following lie presented in picture by MSNBC:

 

A slightly longer version of their official response is available here.  It's the same specious argument that banking apologista, CNBC's Erin Burnett holds dear.  Congressman Brad Sherman explained it in simple terms to the failed bank CEOs assembled in front of Congress last week.  If you haven't seen the Sherman video yet, it should improve your mood substantially.

Apparently, Erin Burnett, Northern Trust, AIG, Wells Fargo and the rest of the financial miscreants believe that not a single American has a functioning brain.  The issue is pooled capital.  Whether spent on billion-dollar bonuses or golf and corporate extravagance, the source of the funds is the same.  You.

Another day another sucker.  Anyone getting angry yet.

After the jump, we have my complete hard-court record against Shuster plus another video on Northern Trust from Lisa Mitchell of NBC.

 

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Reader Comments (21)

Bank stank. First and entirely sick of all this.
Feb 25, 2009 at 5:28 PM | Unregistered CommenterEnough
The response from Nt is classic bullshit. I watched the Brad Sherman video. I recommend all see it as he explains the issue of capital sharing or pooling perfectly and angrily.

http://dailybail.com/home/2009/2/12/bank-bailout-congressional-video-house-rep-brad-sherman-will.html
Feb 25, 2009 at 5:31 PM | Unregistered Commentermortgage of mass destruction
This feels like noise to me. So what about $10 million. That's less than 1/2 a % of what they got from Paulson. But it does show they don't understand the public's anger.
Feb 25, 2009 at 5:33 PM | Unregistered CommenterTenerife
I want to see more than outrage from Congress. I am waiting for indicitments.
Feb 25, 2009 at 5:34 PM | Unregistered CommenterPuzo
Are you angry yet?

http://whatreallyhappened.com/WRHARTICLES/angryyet.html?q=angryyet.html

You should be! You've been lied to. Your tax money has been taken from you and spent under false pretenses. Your children have been sent off to kill and be killed in an illegal war launched without Congressional approval. You who fought in the war and think you came back home healthy, well, you've been lied to as well. Your health is all downhill from here (ask any Vet from Desert Storm), and your children will have a higher incidence of birth defects because that depleted uranium isn't as harmless as you were told it was. And those VA medical benefits you were promised? That was a lie too. Are you angry yet?
Feb 25, 2009 at 5:37 PM | Unregistered CommenterKansas is fucked
Someone linked you from our story. Nice site.

Erin Burnett may be stupid but she's nice to look at.
Feb 25, 2009 at 5:40 PM | Unregistered CommenterTMZ stooge
Are they seriously expecting us to believe that our tax money was not used for this.

This so completely screwed-up.

@tenerife

It's purely symbolic. $10 million or $100, They shouldn't waste our money.

Rip these bastards, DB.
Feb 25, 2009 at 5:46 PM | Unregistered Commenter12 cent mudpies
TMZ did the first productive report they have ever done. I hate that show.
Feb 25, 2009 at 5:48 PM | Unregistered Commenterguest


http://dealbook.blogs.nytimes.com/2009/02/23/how-to-lose-55-percent-invest-in-tarp/

TARP investments are certainly “troubled.” And Washington, it turns out, isn’t the best short-term investor.

The government’s investments in the nation’s ailing banks, made through the newly coined Troubled Asset Relief Program, or TARP, have taken a huge hit since the program started making capital injections last October. Thanks to last week’s stock market sell-off, the government is now sitting on a paper loss of at least 55 percent, or $107.7 billion, on the $195.5 billion invested under the TARP program.
Feb 25, 2009 at 5:50 PM | Unregistered CommenterTupalo
This board is full of a bunch of complainers. Did any of you make a phone call to Congress today or any elected official?

What about yesterday? OK, how about last week. Stop complaining and call and tell someone how you feel.
Feb 25, 2009 at 5:52 PM | Unregistered Commenterputzes
Meanwhile, in real news Eastern Europe is about to implode.
Feb 25, 2009 at 5:55 PM | Unregistered CommenterComrade Dope
To the Bastards We're Bailing Out: The spotlight is on you - though you all continue to push every limit, to take all you can, and think we won't notice, too late. We're on to you and your fuzzy math, your shell game with funds that shift from the taxpayer to your lavish events. Your bullshit will no longer be accepted here.
Feb 25, 2009 at 6:22 PM | Unregistered CommenterAngry Jones
Angry Jones - I'm right there with 'ya. The "Bastards We're Bailing Out" have an incredibly whiny reply: But we ALWAYS fly first class when the corporate jet is unavailable - there's no way we and our fat wallets (we DO have bonus money to spend, you know) can fit in coach. And what, do you expect us to stay at a cheap motel - do you have ANY idea about the LOW-LIFES who stay in those places, not to mention the bed bugs. These events are important marketing tools for us - these are investments in our growth - it all comes at a cost. You just don't understand.

GREAT PR, guys - another fabulous investment.
Feb 25, 2009 at 8:11 PM | Unregistered Commenterhula
There is a chance that they didn't NEED the money and Paulson made them take the money so as not to show which banks REALLY NEEDED the money. Although that was the stupidest fucking idea anyone could come up with. NATIONALIZE the damn insolvent banks, clean them up and spit them back out. If you did that with one bank the frickin stock would set ALL KINDS of records.
Feb 25, 2009 at 8:41 PM | Unregistered CommenterHereHere
nice looking website!
you write well. you capture the anger.
you should organize a hugongous call to washington. and then do it again. and again...

ring a ding ding!!
Feb 26, 2009 at 1:40 AM | Unregistered Commenterwho? who? who!
@who

Thanks for stopping by and seeing what we're trying to accomplish here. Funny that you mention a massive phone campaign targeted at Washington. I agree that, of all the protest concepts, it's likely the easiest to organize and most time-effective manner of making our voice heard. It won't touch the symbolic purity of the Chicago Tea Party, but it's difficult to compete with genius.

I wrote this a few weeks back.

http://dailybail.com/home/2009/2/3/bailout-news-ww-ii-edition-taxpayer-iwo-jima.html

Snip:

"We have a program building behind the scenes for letting Washington know what you think. But we have to achieve critical mass first. It's going to demand that a million of you, from teenagers to seniors call Congress and The White House on one day. It's one of the things we have in the works and we'll be announcing details soon in collaboration with partners."

So we are working on the idea and trying to line up substantial partners before we announce. It sure wouldn't hurt if we had someone with a pulpit who was willing occasionally to mention the million-call movement as it progressed to reality. Perhaps someone with a high-profile show on msnbc.

But who, who could that be.

And thanks again for the kind words about the site.
Feb 26, 2009 at 3:34 AM | Registered CommenterDailyBail
Another thought on the call idea. I tried an experiment last week via twitter and calculated risk that attempted to get 1000 people to call the Treasury and leave a message for Geithner. I have no idea how many people called but it got decent play on Twitter for a few hours and at least 50 people sent me emails through this site saying they had indeed called.

So my guess is that at least 250 and perhaps as many as 500 left a message for Timmy that day. And I seriously doubt that Treasury gets 500 calls from complaining taxpayers in a normal month let alone 1 day.
Feb 26, 2009 at 3:48 AM | Registered CommenterDailyBail
This post was the first of my articles to be picked up by Seeking Alpha.
Feb 26, 2009 at 2:21 PM | Registered CommenterDailyBail
Reprinted from seeking alpha comments:

"Thanks to everyone for their comments. A few thoughts: I agree with those who correctly point out that $10 million is chump change. This story and the outrage it has caused for most people is purely symbolic: i.e. how dare those jerks spend our money on this extravagance, especially in a deepening recession.

Notice I said for most people. Honestly, for me I could care less about the $10 million. I had no plans to write about this story on my site until Northern Trust issued their official response.

Once the response was published however, I quickly became enraged. I have a strong reaction to lies generally and this case is no different.

They should have simply said what Augustus and ChipSeal offered above: 'Yes, we did use some of the TARP funds for our coprorate junket. Events such as these are vital to the successs of our ongoing business, and we use events such as these to solidify our relationships with clients, etc.'

I would have been fine with the above truth. However, they decided to preface any such statements with the initial bogus claim that 'No taxpayer funds were utilized in these events. In other words they tried to use the non-pooled capital argument that erin burnett used about the billions in bonuses ($20 billion in fact) payed out in 2008.

And I couldn't allow them to offer this lie as an excuse without writing about it. If no one highlights the fallacy of their argument about pools of capital, then this logic has an oppportunity to gain further traction, and can then be used next time when the issue is billions in bonuses.

Hope this helps to clarify my thoughts for readers."
Feb 26, 2009 at 2:22 PM | Registered CommenterDailyBail
And the final installment:

"I failed to include the link above about Citi's off-balance sheet issues. The following bloomberg article from last summer discusses the issue soundly, however I know i have read recently that the figure has grown to $1.2 trillion. And again all market at par. That is an $800 billion dollar loss just waiting to happen, whenever the regulators make them put these assets back on the books.

It's Enron on steroids and no one seems to know about it or mention it.

The FASB delayed by 18 months their rule requiring banks to return these assets to the sheet. It's regulatory forebearance at it's finest. 'We can' t make them do it now, it would completely annihilate any remaining real capital an drequire the taxpayer to fork over at least $200 billion more.'



Here are the best links on the off-balance sheet crap:

http://globaleconomicanalysis.blogspot.com/2008/07/citigroups-11-trillion-in-mysterious.html

http://www.bloomberg.com/apps/news?pid=20601109&refer=home&sid=a1liVM3tG3aI


And here is the link on the FASB decision to delay implementation of the new rules by a year. Trust me it won't happen in November of 2009 either. Expect another delay. It's an important read.

http://www.bloomberg.com/apps/news?pid=20601009&sid=a4O4VjK.fX5Q


And finally, regarding Citi, we haven't discussed the mis-marking of the assets they keep on the books in level 2 and level 3 categories. This is also a mess and highlights an additional $200 billion in writedowns tht must be taken whenever they get serious about marking these toxic assets to market.

http://www.bloomberg.com/apps/news?pid=20601009&sid=a4O4VjK.fX5Q

Feb 26, 2009 at 2:34 PM | Registered CommenterDailyBail
GE's ratio is out of this world. I sold my shares in GE a lot higher from these levels after I saw the numbers and the crazy leverage ratio. Keep up the great work and reserach. This is very valuable stuff.

Also, Citi's balance sheet looks really bad too. Great to be short. C will be likely wiped out. As far as common shares. Good to see Kingdom Investments lose all their money on this C fraud. It was all arab money anyway. Go Down C!!
Feb 26, 2009 at 3:12 PM | Unregistered CommenterSanta Monica Monster

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