The government wants to control the banks, just as it now controls GM and Chrysler, and will surely control the health industry in the not-too-distant future. Keeping them TARP-stuffed is the key to control. And for this intensely political president, mere influence is not enough. The White House wants to tell ’em what to do. Control. Direct. Command.
It is not for nothing that rage has been turned on those wicked financiers. The banks are at the core of the administration’s thrust: By managing the money, government can steer the whole economy even more firmly down the left fork in the road.
If the banks are forced to keep TARP cash — which was often forced on them in the first place — the Obama team can work its will on the financial system to unprecedented degree. That’s what’s happening right now.
Under the Bush team a prominent and profitable bank, under threat of a damaging public audit, was forced to accept less than $1 billion of TARP money. The government insisted on buying a new class of preferred stock which gave it a tiny, minority position. The money flowed to the bank. Arguably, back then, the Bush administration was acting for purely economic reasons. It wanted to recapitalize the banks to halt a financial panic.
Fast forward to today, and that same bank is begging to give the money back. The chairman offers to write a check, now, with interest. He’s been sitting on the cash for months and has felt the dead hand of government threatening to run his business and dictate pay scales. He sees the writing on the wall and he wants out. But the Obama team says no, since unlike the smaller banks that gave their TARP money back, this bank is far more prominent. The bank has also been threatened with “adverse” consequences if its chairman persists. That’s politics talking, not economics.
Think about it: If Rick Wagoner can be fired and compact cars can be mandated, why can’t a bank with a vault full of TARP money be told where to lend? And since politics drives this administration, why can’t special loans and terms be offered to favored constituents, favored industries, or even favored regions? Our prosperity has never been based on the political allocation of credit — until now.
Daily Archives: April 4, 2009
Californian gets six years for fatal texting car crash. Here in the Nutmeg state, she’d lose her boater’s license too!
Almost everyone who played any role in the fall of Boston’s John Hancock Tower seems to have come from Greenwich. This Reuters story lays out the players nicely – who lost (Greenwich’s Scott Lawler and his Broadway Partners) who won (Chip Kruger, founder of Greenwich capital who sold out to RBS and started Five Mile Capital) and who won by peddling the junk to third parties but still went belly up – Lehman Brothers, naturally. I can’t figure out how much, if anything, Kruger’s old firm GC lost but they were lenders on the loan, too. Excellent article for those of us who wouldn’t know a mezzanine loan unless it bit us. This one certainly bit Mr. Lawler, who, besides losing $500 million or so on this deal, is currently trying to unload Victor Borge’s former yard on Field Point Circle and a failed building project in Khakum Wood, both below cost. If you smell blood in the water, look at one of those places first.
According to Cityfile.com, Walt and Monica are offering up their Hamptons place, $350,000 for the summer. We can look forward to seeing them around the Round Hill Club this August, I guess – reader Horsejock, who passed along this link, says that the poor Noels have now been turned for membership from both the Beach Club in the Hamptons and the Bath and Tennis Club at Palm Beach. They don’t seem to be welcome in Mustique, either, so it’s the 19th hole on Round Hill for them. Or failing that, Donny Romeo’s hotdog concession at Tod’s. Ronny’s not particular about who he serves. In the alternative, Walt can summer in a country that doesn’t recognize U.S. extradition laws and start a new career – he does have that degree from Harvard, you know.
23 Stanwich Road: January, 2005. Ask: $1.995 million. Sold (in 6 days): $2.275 million.
April 2008, ask: $2.395 Today’s ask: $1.875
Hey, if Obama can do it, why not me? Reader OGRCC’s position that if you take money from US taxpayers you relinquish the right to govern your own affairs got me thinking. That’s not an unreasonable point OG makes, but let’s extend it. Take, for instance, this picture of young Europeans at play, copied from today’s New York Times:
The accompanying article says that Europe won’t supply more troops for Afghanistan, but that’s no loss – most NATO countries that have sent troops there did so with the express provision that they wouldn’t fight, so who needs them? And who needs NATO? We give them money, they won’t do as we ask, OGRCC and I are together on this: U.S. out of NATO, now!
The United Nations? We’re gone in sixty seconds.
Foreign aid to Africa? You’ve got to be friggin’ kidding me. Those dictators’ Swiss bank accounts are fat enough. Cut them off.
Is there room in this plan of donor control to address domestic policy? You bet there is:
Welfare recipients: if you’re single, under 25 and a high school drop out, no kids for you, ma’am. Abort or adoption, your choice, but no more mouths for taxpayers to feed. And all of you, regardless of age, will return to school. Maintain at least a C average and graduate from high school and obtain at least a two-year college degree or no bucks for you. Did I mention the mandatory weekly drug and alcohol testing? I just did. And if you’re not in school, you’ll be working to payback your debt to society. Possible replacing some of those municipal works mentioned next.
Municipal and state workers: We taxpayers will decide how many of you it takes to screw in a light bulb, not your union. And let’s talk about those pensions. Teachers are municipal workers and shall be treated as such, under my plan.
Social Security recipients: Hey Granny, you’ve already collected 1000 X more than you put in the system, so it’s off the shuffleboard court and back to work. You can babysit all those illegitimate children while their mommas are earning their GREs. Granpa, I see litter around that fountain you’re lounging in front of – pick it up!
There’s more, of course; much more, but if we implemented just these improvements we’d save enough money that we could cut taxes to the bone, allow people to keep most of what they earn and no one would need the government dole. Result? More freedom and, as government withered away, fewer politicians. I don’t know what we’ll do with Chris Dodd, but maybe Granpa will need some help with that litter.
My pal in Tucson. John Schneider, has some advice for his sellers that you can apply here in Greenwich:
It doesn’t matter what you paid, or what you put into it, or what you’d like to get for it,
If you want to sell it, the only thing that matters is what buyers are willing to pay for it.
Click on the link for a graphic example.
Owner of Irish land overlooking Ring of Kerry offers to swap for a luxury car. Word is that Dodd’s offered a limo with a government-paid driver, but Teddy Kennedy’s also in the running with a certain Oldsmobile Delmont 88 that has it’s own historical significance. Tough choice, especially if the Kerry himself tosses his mountain bike into the race.
(hat tip: Himself2Thou)
Wall Street types and real estate agents are finding new careers as strippers at “Gentlemen’s Clubs” (an oxymoron if I ever heard one) in New York City. The linked NY Post article only mentions opportunities for girls but I’ll bet there’s a market for Greenwich’s own Joe Barbieri to strut his stuff.
In 2005 and 2006 Riverside Lane (the road next to Hay Day) became hot. The little veterans capes that had languished in the low 3s and 4s forever suddenly started selling in the 700’s to builders who tore them down and put up new, larger houses in their place. And it worked, for awhile. New houses on the street sold for as high as $1.897 in 2006 (and “Finney Knoll, really part of the same street, sold as high as $2.1 or perhaps a tad higher) but then the market started ebbing and prices came back down. Subsequent sales were $1.7, $1.655, $1.639 and $1.580. And nothing in the past year or so.
31 Riverside Lane was built on a lot purchased for $759,000, full asking price, in May, 2006 and at the time it probably seemed like a wise choice. But the house built on it went on the market for $1.850 in August ’08, long after the bloom had faded, and has sat unsold ever since. It got a new broker yesterday and a new price, $1.590. I have my own opinion of that price but since I’m not buying, I’ll let a real purchaser say what it’s worth to her. But prices have certainly settled down from three years ago.