BAILOUT SUPERSTARS: Obama, Jacob Lew And Citigroup
Robert Rubin wins again.
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By John Titus, creator of the new documentary Bailout.
Obama Keeps Top Bailout Recipient Citigroup In Charge Of U.S. Treasury
President Obama has picked former Citigroup executive Jacob Lew to replace Citigroup minion Timothy Geithner as Treasury Secretary.
“Tim seemed to view his job as protecting Citigroup,” said then-FDIC Chair Sheila Bair.
At Obama's Treasury, the “change you can believe in” is apparent only from the difference in roles played by Lew and Geithner with respect to Citigroup: Lew personally benefited from the corporate welfare lavished on Citigroup in the bailouts that began in 2008, whereas Geithner orchestrated the welfare on Citigroup’s behalf.
For 2008, Lew received an enormous bonus--$944,578--shortly after Citigroup posted a loss of $27 billion that year. Despite the unprecedented size of the loss, Citigroup was able to pay Lew’s bonus because it received $45 billion from the TARP program.
In fairness to the much-maligned TARP bailout, it is unclear whether Citigroup paid Lew’s bonus directly out of the $45,000,000,000.00 check it received from the Treasury as part of that program. That’s because Citigroup also received $2.5 trillion in loans from the Federal Reserve—where Tim Geithner worked when the loans began.
The Federal Reserve concealed the loans until a GAO audit forced their disclosure in 2011.
Nor is it clear whether Geithner directed that taxpayers ring-fence $300 billion in Citigroup’s toxic assets as a cushion against Lew’s bonus, which amplified what would have been merely a $27.699 billion loss into the full $27.7 billion loss actually reported by the bank that year.
Whatever the case, Lew felt the $944,578 bonus was enough of an issue that he concealed it from the public until 4 days after filing his ethics disclosure to join the White House.
It would not be the last of Lew's financial disclosure problems, which continued when Lew became Obama's budget director.
"Lew, as the president's budget director, appeared before Congress and continued to insist that President Obama's budget-which Lew had crafted-would not add to the debt of the United States," [Senator] Sessions said.
Historians expect Lew to ascribe blame for his fiscal obfuscation to the popular Turbo Tax software when he appears before the Senate.
If confirmed, Lew would be the most recent additon to a long line of Robert Rubin protégés in the Obama Administration and indeed controlling the White House itself.
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John Titus has practiced law in federal courts for more than 15 years.
Related from Titus:
Why Is The S.E.C. Concealing Massive Citigroup Fraud?
Jan 17, 2013 at 9:40 PM
Reader Comments (19)
He’s spent most of his career in government, with a brief detour to Wall Street, where he worked as a managing director for Citigroup from July 2006 until joining the administration as deputy secretary of state for management and resources when Obama first took office in early 2009.
Lew served as Obama’s director of the Office of Management and Budget from November 2010 to January 2012. He held the position previously from July 1998 to January 2001, in President Bill Clinton’s administration.
http://www.bloomberg.com/news/2013-01-09/obama-said-to-name-lew-tomorrow-as-choice-to-replace-geithner.html
[Brett] Loper [House Speaker John Boehner's policy director] found Lew obnoxious. The budget director was doing 75 percent of the talking, lecturing everyone not only about what Obama's policy was, but also why it was superior to the Republicans'.
Lew was incredulous when he considered the Republican proposal as a whole. The changes they were considering sounded simple. But the speaker's office was laying down general principles and looking to apply them to extremely complex programs. The devil was always in the details.
http://www.huffingtonpost.com/2012/09/13/jack-lew-obama-chief-of-staff_n_1879360.html
http://www.washingtontimes.com/news/2010/jul/28/omb-nominee-got-900000-after-citigroup-bailout/
http://politics.blogs.foxnews.com/2013/01/09/republican-senator-jack-lew-must-never-be-secretary-treasury/#ixzz2HdmhRj5e
http://www.bloomberg.com/news/2013-01-10/obama-says-lew-will-continue-as-master-of-policy-at-treasury.html
http://www.cnbc.com/id/42099554/Citigroup_Tops_List_of_Banks_Who_Received_Federal_Aid
http://dailybail.com/home/dylan-ratigan-with-author-ron-suskind-tim-geithner-ran-the-w.html
And yet Citigroup STILL had to declare a 1-for-10 reverse stock split to stay over $5 a share.
When reality caught up to Lehman Brothers, its balance sheet had a $600 billion hole in it. What is the real number for Citigroup? But no worries. Ponzi schemes last forever.
CIT Files for Bankruptcy, First Loser in Government Bailout
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Seeking Alpha’s Eli Hoffman puts yesterday’s CIT bankruptcy filing–the fifth largest in US history–in context:
CIT Group (CIT) filed for bankruptcy protection Sunday with broad support from its debtholders, but taxpayers will lose the $2.3B invested in CIT, marking the first definitive loss in the government’s rescue of the financial system.
Nearly 90% of CIT’s bondholders voted in favor of the prepackaged bankruptcy, which CIT says will enable it to reduce total debt by $10B, significantly reduce its liquidity needs over the next three years, enhance its capital ratios and accelerate its return to profitability. Bondholders will receive about $0.70 on the dollar, a number that could have fallen as low as $0.06 had CIT entered a freefall bankruptcy. With $71B in assets and $65B in liabilities, CIT’s bankruptcy ranks among the largest in corporate history.
http://www.businesspundit.com/cit-files-for-bankruptcy-first-loser-in-government-bailout/
Flashback
Bailed-Out Banks Donating To Obama's Inauguration
Citibank executives, who are expected to ask for another billion-dollar federal bailout on top of the $45 billion in rescue funds they received in November, are trying to buy the goodwill of Barack Obama -- or they just want to help the president-elect throw the best inauguration party in history.
Of the hundreds of banks and firms which have received bailout money, Citibank
employees have contributed the most to Obama's inauguration fund -- at least $113,000 as of Wednesday.
Among those contributions is $50,000 from Ray McGuire, Citi's co-head of global investment banking, and $50,000 from Louis Susman, the recently-retired vice chairman of Citigroup.
more
http://www.huffingtonpost.com/2009/01/14/bailed-out-banks-donating_n_157960.html
What Recession? The $170 Million Inauguration
snip
Best Seats in the House
The biggest group of donors were none other than the recently bailed-out Wall Street executives and employees.
"The finance sector is well represented, despite its recent troubles," Ritsch said. "Those who worked in finance still managed to pull together nearly $7 million for the inauguration."
The donors will get some of the best seats in the house for the inauguration, as well as admittance to some of the best balls and other events.
in full
http://abcnews.go.com/Business/Inauguration/president-obama-inauguration-cost-170-million/story?id=6665946
Gen X says " WE ARE NOT PAYING" " WE ARE NOT PAYING!!!!!" The "Debt" owed to the "FED" goes to ZERO and we Start over WITHOUT the FED. and the INCOME TAX. WE ARE NOT SLAVES. We will not work until we drop and still die in DEBT.
My children are not DEBT SLAVES.
http://www.nakedcapitalism.com/2013/01/ian-fraser-something-sinister-about-the-lack-of-prosecutions-at-lehman-brothers.html
I did see it but couldn't get the video to load. The post that went along with the video said it was Valukas' first interview since the Lehman bk report. If that's true, then the video was with Steve Kroft of 60 Minutes. But that interview happened in April 2012, so I thought maybe it had something to do with the S.E.C. since that's really the Lehman story in a nutshell: on-site regulators look the other way as Lehman commits accounting fraud and punishes employees who raise questions about accounting fraud.
Criminality and punishing truth tellers who try to do their jobs would certainly tie in with the appointment of Mary jo White to head the S.E.C., but the post scarcely mentioned that, as I recall. Go figure then.
http://www.reuters.com/article/2013/06/18/us-citigroup-taxes-insight-idUSBRE95H03E20130618
(Reuters) - Over the past few years, Citigroup Inc has been grappling with an unusual problem - how to incur more U.S. taxes.
The third-largest U.S. bank tried to buy the foundering Wachovia Corp in the fall of 2008 in part because the deal would have brought it more taxable domestic income, a person familiar with the matter said.
In February this year, it agreed to buy a portfolio of about $7 billion in credit card loans to Best Buy Co Inc customers from Capital One Financial Corp - and taxes played a role in the bank's decision to do the deal, Chief Executive Michael Corbat said in March.
Citigroup is even reclassifying overseas profit as money that it might bring back to the United States, an odd move in an era in which many American companies try to keep much of their foreign income abroad to avoid paying higher U.S. taxes on the profits.
The bank is not feeling generous — it is just looking to use up $55 billion of tax credits and deductions, known as deferred tax assets, as of the end of March.
It had accumulated them from losses and foreign tax payments largely during and after the financial crisis. About 95 percent of these future tax benefits are in the United States.
Realizing these benefits over time could be worth some $27 billion to Citigroup today, or about $9 per share for a stock that trades at around $50 a share, according to John McDonald, a veteran bank analyst at Sanford C. Bernstein.
Using all these assets will free up more than $40 billion, about one-third, of the bank's capital. Citigroup could then return more capital to shareholders through stock-boosting moves like share buybacks.
Deferred tax assets arise because U.S. companies have to keep two sets of books - one for the financial markets, and a second for the Internal Revenue Service. The bank recognizes items including costs, such as expected losses on loans, at different times on the two books.
http://www.policymic.com/articles/36373/university-of-maryland-delta-gamma-sorority-email-goes-viral
A thespians rendering of said letter. This shit is just hilarious.
http://www.grantland.com/blog/hollywood-prospectus/post/_/id/74970/heres-that-famous-actor-reading-the-insane-sorority-letter-viral-video-you-ordered-starring-michael-shannon