Bank Bailout Puts Taxpayers At Risk
EmailABC News’ Betsy Stark reports: It all feels less frantic than the government’s rescue of the financial system a couple of months ago — and we can thank the government’s many aggressive actions for the lack of panic. But the enormous losses that continue at Citi and Bank of America, and the sorry state of their stocks, are evidence of a banking system still in critical condition. The government fell short of nationalizing the two banking giants — as it did with AIG and Fannie and Freddie — but when you look at what’s happened, the government may not have nationalized ownership of the banks but it sure seems to have nationalized risk. As part of the deal to stabilize Citi and BofA, U.S. taxpayers are now on the hook for "limiting" Citi’s losses on up to $301 billion in troubled assets and insuring BofA’s losses on up to $118 billion in risky assets. That’s on top of the $45 billion in TARP cash each bank has received outright. By my back-of-the-napkin math, the government has now committed half a trillion dollars in taxpayer money to prop up two banks private investors have been fleeing. BofA’s total market cap has dropped to $37.5 billion, Citi’s is just $21 billion — considerably less than what taxpayers have invested in them. If you start with the premise that each is too big to fail, then the government is doing what it has to do. But the worrisome thing is it’s hard to see the bottom for these banks and others. With the economy continuing to decline and unemployment continuing to rise, it is reasonable to expect more loan defaults on everything from mortgages to credit cards. And if banks are forced to use their cash to cover losses rather than make loans, well, how does the economy get out of its vicious cycle and grow? So now what? FDIC chair Shelia Bair, who has a penchant for speaking forthrightly while others dance on the head of a pin, said today the government needs to buy these bad assets that are draining bank reserves and investor confidence. In other words, the TARP needs to go back to Plan A, which is get the toxic assets off bank’s books so they can be transparently healthy again. But we are quickly learning how far $700 billion in TARP money may not go. Many analysts think the financial industry alone could devour that money and more, never mind the auto companies, the steel industry, etc. who also want help. As Fed Chairman Ben Bernanke reminded us just this week, a healthy economy begins with a healthy financial system.
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Taxpayers at risk ???
hahahahahahahahahahahahahahahahahah
When has anyone considered the risk of the taxpayer?
touching…. but hilarious!!!
hahahahahahahahahahahahahahahahahahah
Posted by: Omentum | January 16, 2009, 2:13 pm 2:13 pm
When Ben Bernanke speaks … no one listens. He’s an idiot.
Posted by: Gotterdammerung | January 16, 2009, 3:59 pm 3:59 pm
this whole economic mess really disgustes me! wallstreet, banks, corporations doing whatever they want to get ultra rich at the expense of the workers & this country! They have gammed this whole free democracy thing, and the gov’t helps them out and ignores the crooks! I’m strickly cash & carry now, & will only buy made in America or Canada quality goods & foods. I refuse to line the pockets of these unpatriotic crooks, & buy shoddy products from the jobs they shipped out of the USA!!!!
Posted by: disgusted in Ohio | January 16, 2009, 11:43 pm 11:43 pm
I owe back taxes and that amount has significantly been increasing because of penalties and interests. although i have made payments already but i still can’t catch up. the government is using my tax money to bailout these big companies. i filed an offer of compromise but they rejected it because they claim that i can fully pay $140,000 in 10 years or so. this means i will not have a life for 10 years and be a slave of the government.
why don’t they just give the bailout to the taxpayers. with the money, we can either put it the bank to save it thereby boosting the banking industry; … or we can spend the money so it goes into our economy. we buy stuff, the retailers and manufacturers will benefit from it and improve their business. with the increase in demand for products, they need to hire more people. but if they give the money to the big corporations, it stays at the top and less of it trickles down to us, the masses.
Posted by: frustrated from california | January 17, 2009, 1:06 am 1:06 am
Many news reports have covered the Trillions of dollars lost in the stock market. There have been many reports on the hundreds of billions of dollars lost by various financial institutions. What I would like to know is who’s making a killing on all of this catastrophe? Most of us know that hedging and short selling is a powerful financial tool, especially in the hands of big institutions and other financial powerhouses. Can Betsy Stark shine some light on this?
Posted by: hallart | January 21, 2009, 3:58 pm 3:58 pm
ah the stupidity of it all ! let them eat cake. they made the problem, now let the swim in their own dirt. DONT bail out nobody, after all they still want their bonuses, whereas the working stiff gets zero bonuses, just a pink slip. i really would express myself better if i cold let loose, but i must refrain from bad language!!!!!!
Posted by: george alicea | January 23, 2009, 9:32 pm 9:32 pm
How is owing back taxes anyone else’s obligation other than the person who failed to pay them. This sense of entitlement is evident everywhere: federal government, state government, private industry, public corporation and even the American citizen. Own up for your mistakes and don’t expect anyone to bail you out. I resent the this whining and crying…enough of the whoa-is-me attitude. I work hard, sometimes 60-70 hours per week because I recognize the direct correlation between effort and reward. The harder I work, the further I get ahead. I pay taxes and I live within my means. I set aside over 17% of my income in emergency savings accounts, 401k retirement investments, IRA investments, and I donate to charities to aid those less fortunate, along with volunteering time to aid those same charities I support financially…keep in mind this volunteer time is addition to the 60-70 hours per week. This is possible because I put forth the effort. You’ll say “it’s easy to save 16% when you make a lot of money”. NEWS FLASH: I don’t make a lot of money. Here’s a secret…I budget and live within my means. I go without immediate gratification in hopes of securing a promising future, built on effort, sacrifice and dedication. You know what…I don’t complain about long hours because it is a choice. I don’t complain about not driving a Lexus and perfectly content going from point A to point B in my pre-owned car. A car is not an asset…it loses value with each passing mile. It gets me from here to there and that is its purpose. And frankly, if I do want to drive a BMW or Mercedes, don’t proclaim that this is unfair b/c that is complete b.s. You want fair? Match me hour for hour, effort for effort and you can have it too. Why should you have what I have if you put in less time than what I do? Your problems are just that…yours. There is plenty to go around for everyone and never have I complained about having to pay my dues. I’m COMPLAINING NOW. NEWSFLASH -THE PROBLEM IS A SPENDING PROBLEM, NOT AN INCOME PROBLEM. IF YOU SPEND MORE THAN YOU MAKE….YOU WILL FAIL. I don’t get everything I want and anytime I think I want something, I delay purchasing to seriously consider if this is a need or a want. We want and want and want, yet what we buy doesn’t make us any happier. This is utter Chaos. I don’t want a handout and I don’t want to be responsible for a bailout. I take full responsibility for ensuring my own self sufficiency and I would greatly appreciate it if everyone did the same. Lend a hand to a neighbor when they are down and go out of your way to give more than you receive. I’m a generous person for only so long and when temporary support becomes a permanent drain, that’s when I shut off the support valve.
In closing, take pride in being a productive and contributing citizen. Temporary joy is found in the guilty pleasures of this world but pause for a brief moment and look at what has come to those who put their faith and happiness in these things: these things are temporary and what is here today, can be gone tomorrow….just look at my 401k account.
We have allowed God to be removed from all facets of life and look at where it has gotten us. This new administration has already made progress in reducing his presence even further. No amount of acquisitions will fill that void within…only one can and he promises treasurers far greater than any on this earth.
“Such is the end of all who go after ill-gotten gain; it takes away the lives of those who get it.” Proverbs 1:19
“Better to be a nobody and yet have a servant than pretend to be somebody and have no food.” Proverbs 12:9
“Though I am free and belong to no man, I make myself a slave to everyone, to win as many as possible.” 1 Corinthians 9:19
“Therefore we do not lose heart. Though outwardly we are wasting away, yet inwardly we are being renewed day by day. For our light and momentary troubles are achieving for us an eternal glory that far outweighs them all. So we fix our eyes not on what is seen, but on what is unseen. For what is seen is temporary, but what is unseen is eternal.” 2 Corinthians 4: 16-18
“For you know the grace of our Lord Jesus Christ, that though he was rich, yet for your sakes he became poor, so that you through his poverty might become rich.” 2 Corinthians 8:9
“But by faith we eagerly await through the Spirit the righteousness for which we hope.” Galatians 5:5
“Make it your ambition to lead a quiet life, to mind your own business and to work with your hands, just as we told you.” 1 Thessalonians 4:11
“If a man will not work, he shall not eat.” 2 Thessalonians 3:10
“Christ Jesus came into the world to save sinners – of whom I am the worst. But for that very reason I was shown mercy so that in me, the worst of sinners, Christ Jesus might display his unlimited patience as an example for those who would believe on him and receive eternal life.” 1 Timothy 1:15-16
“There will be terrible times in the last days. People will be lovers of themselves, lovers of money, boastful, proud, abusive, disobedient to their parents, ungrateful, unholy, without love, unforgiving, slanderous, without self-control, brutal, not lovers of the good, treacherous, rash, conceited, lovers of pleasure rather than lovers of God – having a form of godliness but denying its power. Have nothing to do with them.” 2 Timothy 3: 1-5
“Now faith is being sure of what we hope for and certain of what we do not see.” Hebrews 11:11
“Do not forget to entertain strangers, for by so doing some people have entertained angels without knowing it.” Hebrews 13:2
“Show me your faith without deeds, and I will show you my faith by what I do.” James 2:18
“The world and its desires pass away, but the man who does the will of God lives forever.” 1 John 2:17
“This is how we know what love is: Jesus Christ laid down his life for us. And we ought to lay down our lives for our brothers.” 1 John 3:16
“This is the confidence we have in approaching God: that if we ask anything according to his will, he hears us. And if we know that he hears us – whatever we ask – we know that we have what we asked of him.” 1 John 5: 14-15
Posted by: Handouts Aplenty | February 6, 2009, 10:43 pm 10:43 pm