Tag Archives: Tarp fraud

Hey Guys, you still don’t get the picture

Banks are sounding surprised that the government won’t let them give back TARP money and free themselves of governmental restrictions. There are obviously some very smart people on Wall Street, far smarter than I, but it’s just as obvious that they weren’t studying political science and philosphy in college. If they had, those “soft courses” would have tipped them off to what was at stake last fall.

The government couldn’t care less if it doesn’t get back the $10 billion it loaned Goldman or the billions it forced on other banks – it’s just taxpayer money, after all. The point, the sole purpose of TARP was to grab ahold of the financial industry and twist it to the politicans’ whims. So having seized control, of course they aren’t going to relinquish it. The fun has just begun.

I saw some poor dolt of a business professor on the news tonight saying, “well, gee, they won the election so I guess we all have to accept more regulation – I just hope they don’t go too far.” That’s been the cry of businessmen and producers since the dawn of civilization – they produce and work in the vain hope that  the looters will restrain their greed. But it’s power these people are after, not money – they’ll always be enough of the latter for the people at the top, just ask Castro. Businessmen don’t see this and that’s going to doom them.

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Who cares, when there’s Gummint money instead?

Dodd bill bans commissions, perks for TARP companies.

Feb. 14 (Bloomberg) — New restrictions on executive pay at U.S. banks receiving federal aid may cause talented managers to flee to hedge funds and foreign-owned banks, say critics of the measure.

The limits, championed by Senate Banking Committee Chairman Christopher Dodd, were tucked into a $787 billion fiscal stimulus bill approved yesterday by Congress. President Barack Obama plans to sign the measure early next week.

The provisions go beyond the $500,000 cap announced by Obama last month, by restricting bonuses for senior executives and next 20 highest employees at companies that receive more than $500 million from the Treasury Department’s Troubled Asset Relief Program.

“The soon-to-be-law prohibits paying commissions, which are the lifeblood of a salesperson’s income,” said Scott Talbott, vice president for government affairs at the Financial Services Roundtable, a Washington trade group that lobbies on behalf of banks. “Non-TARP companies, like hedge funds and foreign firms, don’t have this restriction, so it will be easier for them to hire the top producers away.”

Dodd defended the restrictions as a proper response to reports of excesses at banks that received federal aid, including the award of a combined $121 million to four executives at Merrill Lynch & Co. just before the firm was acquired by Bank of America Corp.

“The decisions of certain Wall Street executives to enrich themselves at the expense of taxpayers have seriously undermined public confidence in efforts to stabilize the economy,” Dodd, a Connecticut Democrat, said in a statement. “These tough new rules will help ensure that taxpayer dollars no longer effectively subsidize lavish Wall Street bonuses.”

Sliding Scale

The legislation limits bonuses and other incentive pay at those companies on a sliding scale according to how much federal aid they receive.

Restrictions would apply to senior executive officers and the next 20 highest paid employees at companies that receive more than $500 million from TARP. Companies receiving between $250 million and $500 million would face restrictions on their senior executive officers and their next 10 highest-paid workers. The limits would apply to the top five employees at companies receiving between $25 million and $250 million.

The bill would also go beyond what the White House proposed by giving shareholders in all companies, not just those receiving “exceptional” assistance, an annual nonbinding vote on executive compensation.

Past Compensation

The Dodd amendment requires the Treasury Department to review past compensation paid to the top 25 employees of TARP recipients to determine if it is “contrary to the public interest.”

The plan requires TARP beneficiaries to create a company- wide policy regarding “excessive or luxury expenditures” such as corporate jets, entertainment and “other activities or events that are not reasonable expenditures for staff development.”

The bill “is making me nervous,” said Mindy Diamond, president of Chester, New Jersey-based Diamond Consultants LLC, which specializes in recruiting brokers. 

It’s just the beginning of the complete governmental control of our economy so I’m sure these measures will seem quaint in just a few years but here’s one happy thought: if the Dodd provisions were applied to municipalities, we’d finally see and end to police sergeants making 5X more in overtime than our First Selectman does in salary.

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Dealbreaker: How to solve the slump

Warning to my humor-challenged friends: sarcasm ahead.

How do you handle a flagging economy convulsing with the powerful seizures of acute (and badly needed) deleveraging? Why, by creating incentives to pour more debt into the system, of course. You have to make sure people are buying flat panel TVs and SUVs on credit without impediment, as is their god-given right as Americans. You have to encourage more deposit-less mortgages. You create the impression that low interest rates are an entitlement. Raising them to meet market needs is a crime.

You have to rev up the re-fi machine. People can’t afford their mortgage anymore? Give them a tax credit, a check and then kick the living shit out of the lender until she forgives a large portion of the debt. (We call that “modification” and not “nationalization” of the debt, but it’s the same thing. Want TARP money? No? Take it anyhow, unless you want to destroy the financial system in the United States you anti-American pig. And use it to lend lend lend, damnit, or there will be hell to pay).

And you talk the talk:

You don’t say borrowing. You say lending. You don’t say debt. You say credit. Example:

Incorrect: If we want to save this country, we have to increase the debt in this economy.
Correct: If we want to save this country, we have to increase the available credit in this economy.

Now get back to work (buying on credit) you American hating slackers.

Dodd Says Credit Card Companies Too Often Are Gouging Customers [Bloomberg]

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Why we should streamline foreclosures and get a move on

Several readers have informed me that the owner of 23 West End Avenue and that crazy Victorian on S. Park Avenue, both in Old Greenwich, is stripping them of everything he can before title passes irrevocably to his lender. Stealing appliances from a spec house in foreclosure is a time-honored tradition in the building trade, although usually it’s the unpaid sub-contractors who do the stripping in an attempt to recover something for their labor. But this builder has announced that he intends to take toilets, sinks, baths, window treatments (good riddance to those) and whatever else he thinks may have value. I suppose he’ll get away with this, things being what they are and banks so busy with thousands of other foreclosures but it seems like theft to me: he gave title to the house to the bank when he obtained a mortgage and it’s the bank, not he, who owns those things.

But more germane to the subject: getting inventory off the market, this kind of behavior just mucks up the work. I was going to show that house on Park Avenue, odd design notwithstanding, because at its new price of $1.495, there might be some value there. Now I won’t. I don’t want to get even peripherally involved with some nut case who thinks that the value of a used toilet is worth risking arrest and, even if we were to strike a deal, who knows what would be left in the house at closing? I’ll wait for him to be removed, thank you, and see what happens at the auction, if that ever happens and my client’s still interested.

I also find it telling that the listing broker can’t provide assurance that a bid of the full asking price would be acceptable to whoever holds the loan because, apparently, no one from whatever institution that is will communicate with her. So you’ve got a whack job in possession of the house, threatening to strip it (having already demonstrated a willingness and ability to do just that at 23 West End Avenue), a lender who’s pulling a Garbo, and an uncertain real estate market. Repeat this strange scenario several hundred thousand times across the country and you’ll have some idea of why our current housing market’s in the mess it is. Those areas that were hit hardest earliest – California and Florida, for instance – seem to have streamlined the process of foreclosure and sales in those states are recovering. We need more of that and not a new federal taxpayer-paid program to keep defaulting borrowers in homes they can’t afford. Tomorrow’s TARP announcement, with its promise to spend billions of our money on people like the builder described here, won’t help.

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