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View Diary: Bill Halter comes out swinging - SLAMS (!!) Lincoln for bailout vote (193 comments)

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  •  It seems to me like you're conflating.... (2+ / 0-)
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    wader, TooFolkGR

    ...TARP and the Fed's bailout actions, which aren't the same thing.

    •  Nope (0+ / 0-)

      TARP Loss Revised Down to $89B

      .....However, the number may just be an accounting sleight of hand, as it fails to include the estimated $370 billion in losses at Fannie Mae and Freddie Mac through 2020. At least the government is getting ready to end its entanglement with AIG: The Wall Street Journal says the government could start winding down its 80 percent stake in the insurance giant as early as next year.

      •  So where did your trillion figure come from?(n/t) (0+ / 0-)
        •  So you agree that there will be some cost? (0+ / 0-)

          I'll withdraw my trillion dollar guess, the truth is we'll never know, except that it will be costly.

          •  I agree there probably will. (0+ / 0-)

            It's hard to know exactly. One of the reasons we bought the toxic investments in the first place was because there was so much uncertainty about their actual value. We will very probably lose money on them, but it's hard to tell, as of yet, how much. So far things seem to be going better than expected.

            •  Oh, hogwash. (1+ / 0-)
              Recommended by:

              We bought the toxic assets to protect the too big to fail banks.

              •  the rest was an excuse (1+ / 0-)
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                to get the Gov't to buy at 100% value

              •  Err. (0+ / 0-)

                Yes. And the reason buying them helped was because there was so much uncertainty over their value. Again you seem to be reading mutual exclusivity into an area where two things are both true.

                •  All kinds of real estate have declined since, (0+ / 0-)

                  but you say that the deal made money? Show me.

                  If it was a winner, it wouldn't have needed a bailout. It's a black hole, we don't know the loss because the decline hasn't even stopped, and because propaganda has the True Believers bamboozled.

                  •  I beg your pardon? (0+ / 0-)

                    I never said the deal made money. You're developing quite a habit of arguing points people didn't make.

                    •  Excuse me (0+ / 0-)

                      The debate started with that claim, it wasn't made by you. At least we agree that it is a financial black hole.

                      The Office of The Special Inspector General for The Troubled Asset Relief Program

                      ‘Many of TARP’s stated goals, however, have simply not been met. Despite the fact that the explicit goal of the Capital Purchase Program ("CPP") was to increase financing to U.S. businesses and consumers, lending continues to decrease, month after month, and the TARP program designed specifically to address small-business lending — announced in March 2009 — has still not been implemented by Treasury. Notwithstanding the fact that preserving homeownership and promoting jobs were explicit purposes of the Emergency Economic Stabilization Act of 2008 ("EESA"), the statute that created TARP, nearly 16 months later, home foreclosures remain at record levels, the TARP foreclosure prevention program has only permanently modified a small fraction of eligible mortgages, and unemployment is the highest it has been in a generation. Whether these goals can effectively be met through existing TARP programs is very much an open question at this time. And to the extent that the Government had leverage through its status as a significant preferred shareholder to influence the largest TARP recipients to carry out such policy goals, it was lost with their exit from TARP."

                      To the extent that huge, interconnected, "too big to fail" institutions contributed to the crisis, those institutions are now even larger, in part because of the substantial subsidies provided by TARP and other bailout programs.
                      • To the extent that institutions were previously incentivized to take reckless risks through a "heads, I win; tails, the Government will bail me out" mentality, the market is more convinced than ever that the Government will step in as necessary to save systemically significant institutions. This perception was reinforced when TARP was extended until October 3, 2010, thus permitting Treasury to
                      maintain a war chest of potential rescue funding at the same time that banks that have shown questionable ability to return to profitability (and in some cases are posting multi-billion-dollar losses) are exiting TARP programs.
                      • To the extent that large institutions’ risky behavior resulted from the desire to justify ever-greater bonuses — and indeed, the race appears to be on for TARP recipients to exit the program in order to avoid its pay restrictions — the current bonus season demonstrates that although there have been some improvements
                      in the form that bonus compensation takes for some executives, there has been little fundamental change in the excessive compensation culture on Wall Street.
                      • To the extent that the crisis was fueled by a "bubble" in the housing market, the Federal Government’s concerted efforts to support home prices — as discussed more fully in Section 3 of this report — risk re-inflating that bubble in light of the Government’s effective takeover of the housing market through purchases and guarantees, either direct or implicit, of nearly all of the residential mortgage market.

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