Thursday, October 30, 2008

Time for the gummint to kick some ass

This is appalling.
The Treasury plans to invest up to $250 billion in a wide swath of U.S. banks in return for ownership stakes, which the government will relinquish when it is repaid.

Among other restrictions, participating institutions cannot increase dividend payments without government permission. They also are barred from repurchasing stock, which increases the value of outstanding shares.

The 33 banks signed up so far plan to pay shareholders about $7 billion this quarter. Companies generally try to pay consistent dividends and, at the present pace, those dividends will consume 52 percent of the Treasury's investment over the initial three-year term.

You mean that instead of using the money to increase lending and inject capital - the ostensible purpose of the bailout - they are planning on using 52% of that money to pay dividends? In which case they don't really need the fucking money from the Treasury, do they?

Banks have been making money hand over fist in recent years; look at the outrageous fees they charge and the low interest they pay the customers. I am of the opinion that their investors, having had such a cushy ride for a while at customer expense can bloody well feel some of the pain now.

Put another way, why do GOP politicians and servile pundits raise a hue and cry about redistribution of wealth only when it is distributed downward and not upward, as it has been quite rapaciously since reaganomics took over? Gross hypocrisy of the first order.

I wish Waxman and Cuomo every success:
New York Attorney General Andrew Cuomo is demanding information about executive compensation and bonuses at nine banks that have received federal funds under TARP, the U.S. Treasury's Troubled Asset Relief Program.

In a letter to each institution's Board of Directors, Cuomo warns the bonuses could violate New York's state fraudulent conveyance law.

"Obviously," he writes, "we will have grave concerns if your expected bonus pool has increased in any way as a result of your receipt or expected receipt of taxpayer funds from TARP."


h/t to Chris in Paris at Americablog for pointing all this out (here and here)
--the BB


johnieb said...


Paul said...

LOL. Thanks, johnieb. Somebody's gotta keep me honest.