Bush Tax Break for Bankers Would End With Stimulus Package

We know that TARP, aka Bailout, funds helped PNC Bank acquire Cleveland’s National City Bank.  Did you know that PNC will also get a tax break out of the deal?

Several months ago, it seems the Bush Administration created a tax break which allows the healthy banks that acquire troubled banks to write down healthy portions of the troubled banks assets when figuring their tax bills.  It’s such a great deal that some banks are netting money – PNC is expected to net $5.1 billion more in tax breaks than it paid for PNC’s assets.

Let me see if I get this … A healthy bank gets free government money in the form of drastically reduced tax liability – even if it is healthy and doesn’t need it.

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Mary Jo Kilroy’s Committee Assignment Puts Her in Center of Economic Recovery Efforts

Freshman U.S. Rep. Mary Jo Kilroy has gotten a seat on the high profile House Committee on Financial Services chaired by Massachussetts Rep. Barney Frank.

Frank’s committee has taken center stage in combating the U.S. financial crisis.  The much and rightfully maligned Troubled Assets Relief Program, aka, $700 billion bailout, originated in Financial Services.  Frank also pushed for a bailout of the U.S. auto industry, but Senate Republicans killed that effort until the Bush Administration stepped in with $17 billion for GM and Chrysler late last month.

Kilroy and her fellow Congressional Democrats will be in a unique position very soon after President-elect Barack Obama takes office in a couple of weeks.  The original bailout bill called for $350 billion of the $700 billion total to be disbursed by the U.S. Department of the Treasury, led by Treasury Secretary Henry Paulson.  Paulson has been roundly criticized for the money not serving the purpose for which Congress intended – unlocking frozen capital markets.  The Government Accountability Office and an oversight arm of the committee which Kilroy now serves found several problems with how the money has been disbursed, chief among them accountability.  Bailout dollars have been used to pay out executive bonuses, sit as cash holdings and used by some banks to acquire others.

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Where Is All the Bailout Money Going? Banks Aren’t Telling …

The other day the Associated Press asked 21 banks who took in billions in U.S. taxpayer provided federal bailout money four questions:

1. How much of the money take has been spent?
2. What was it spent on?
3. How much is being held in savings?
4. What’s the plan for the rest.

Silence.  Here’s hoping that the New Year brings a Congress and Adminstration willing to force some transparency out of these corporate welfare cases and hold them accountable for real results and sound business practices.  In the meantime, we’ve got Cramer:

Jim Cramer Goes Ballistic on Bailed Out Banks

Text: Henry Paulson Testimony before House Financial Services Committee | November 18, 2008

(Source: U.S. Treasury Department)

Click this link for PDF of Sec. Paulson’s Testimony

Transcript: President-Elect Barack Obama and Michelle Obama on ‘60 Minutes’ | November 16

(Source: CBS News)

(Narration) Steve Kroft:Since Barack Obama was elected the 44th president of the United States 12 days ago, he has largely remained out of sight, getting high-level government briefings and conferring with his transition team. But he surfaced on Friday afternoon in Chicago, alongside his wife Michelle to give 60 Minutes his first post-election interview.

It covers a wide range of subjects including the economy, the ailing automobile industry, the government’s $700 billion bailout program, their visit to the White House, the emotions of election night and the quest for a family dog. You’ll hear all of it. But we begin with the president-elect and his thoughts about the new job.

Steve Kroft: So here we are.

President-elect Barack Obama: Here we are.

Kroft: How’s your life changed in the last ten days?

Mr. Obama: Well, I tell you what, there seem to be more people hovering around me. That’s for sure. And, on the other hand, I’m sleeping in my own bed over the last ten days, which is quite a treat. Michelle always wakes up earlier than I do. So listen to her roaming around and having the girls come in and, you know, jump in your bed. It’s a great feeling. Yeah. Read more

Bank Failures Surging in 2008

The last couple of times I’ve noticed that banks are failing it’s always on Saturday, as the FDIC quietly swoops in and takes over on a Friday afternoon.  It seems like it’s happening more and more often so I took a look at the FDIC’s website.  There is a spike this year, we’ve had 19 FDIC insured banks fail this year.  The record I found only went back to 2000, there is a chart below.  41% of the bank failures in the last eight years have occurred this year.  33% of U.S. bank failures since 2000 have happened since July of this year. 

Security Pacific Bank of Los Angeles and Franklin Bank of Houston, Texas became casulties on Friday.  I’m looking at these numbers, the jobless rate, the housing bubble, Ford’s and GM’s woes – the list goes on – and I’m thinking that all Barney Frank, George Bush and Henry Paulson have done is throw $700 billion at Wall Street. 

The U.S. Government Lie: $700 Billion Bailout

When the U.S. government begins renaming terrible things like killing civilians with misplaced bombs “collateral damage,” we should all know we’re in trouble. When the media doesn’t challenge this government gobbledy-gook but rather adopts it, we’re in bigger trouble. The de-sensitizing has begun. Read more

Warren Buffet: Bailout Goodhousekeeping Seal of Approval?

A CNBC pundit just told America that Warren Buffett is the Bailout’s ‘Good Housekeeping Seal of Approval’ for making deals during the “crisis.”  Buffett made a new deal today with GE.  He’s already made this deal since Paulson’s bid to become King Shit of Economic Mountain. 

Buffett does support the Bailout Bill, but as for these deals – Buffett’s just doing what Warren does best – he’s finding the value and investing.  He’ll make out like a bandit, only he’s the sort of investor that reaps honest profit.

Still not sold on the bailout …

What Crisis? Dow Posts Third Biggest Gain Ever – Most Americans Don’t See the Sky Falling

Look, I know the stock market isn’t “the economy.”  But days like this will make it all the more difficult for Washington’s politicians to convince voters that $700 billion should be staked to bailout Wall Street’s financiers.

I was in a meeting today previewing a presentation I developed to communicate with a group of people over a thorny issue.  At one point, a colleague said to me, “Pelikan, you’re gonna like this.”

“Are we trying to educate or notify? This first part is good – you’re educating, but then you move to notifying.”

My colleague knew I’d like that feedback because she said she heard a political pundit using the same language to describe how the Bush Administration failed to get public support for the bailout.

I don’t know where she heard that analysis, but it’s good.  I still have yet to discuss this whole “crisis” with more than a couple of people who are four-square behind it. 

I think that pundit was right.  Henry Paulson said just in the last couple of months that the issues in the credit and banking system were “manageable.”  Then all of a sudden there’s a plan to make him king of the financial mountain.

There’s another reason why regular folks are skeptical.  It’s the rush.  The Bush Administration has a very poor record when it comes to public policy decisions hastily rammed down their collective throat:

1. WMD & Al-Qaeda running rampant in Iraq – There were no WMD and Al-Qaeda didn’t exist in Iraq until we destabilized the country.
2. Patriot Act – Constitution shredded
3. U.S. Official Torture Policy – Thanks to Dick Cheney, David Addington and John Yoo, Constitution shredded, treaties pissed on, FBI and Dept of Defense ignored, innocent people tortured along with bad guys who were tortured and gave erroneous information, Amerian moral authority erroded.

Now, 30 days before a presidential election, with less than a week to consider the problem, the Bush Administration wants to fork over $700 billion to investment bankers?

This can’t be good.

John McCain and the Bailout

The truth is, neither Sen. John McCain nor Sen. Barack Obama had any natural affinity to add value to the work of fashioning the bill for the proposed $700 billion bailout of Wall Street. What each did have was the opportunity, as titular heads of their parties, to take the temperature down, reassure and convince holdouts, and stay out of the way.

What wasn’t needed at such a serious time in our nation’s financial history was for either one of them to turn Washington into one more campaign stop. That’s what McCain did.

Today, after the House defeated the bailout bill, McCain released a statement, which said, in part:

I returned to Washington last week to work on a bipartisan rescue plan. It was the only plan at that time on the table but lacked enough support to pass. It also lacked sufficient accountability and transparency to justify expenditure of the taxpayers’ money.

What a pompous ass. Guess what, John? Apparently the plan “lacked enough support to pass” after you left Washington as well. Since well over 100 Republicans voted against the bill, either McCain didn’t work hard enough or he still has a problem with conservatives. Read more

Bailout DOA on U.S. House Floor

American People – 1  Fat Cats – 0

Their Profits are Theirs, For Awhile, Their Losses Are As Well

• Bailout Fails 228-205 – New York Times

Monday Morning Bailout Blues

World Markets

• World Markets fall as U.S. seen taking time – Associated Press
• Stocks in Europe, Asia slump – Bloomberg
• European central banks cut sales of gold – Financial Times
• Britain nationalizes Bradford & Bingley – Reuters

U.S. Bailout News

• Lawmakers face difficult vote on Bailout – Washington Post
• Bailout plan in hand, House braces for tough vote – New York Times
• Boehner’s standing with conservatives tested – Congressional Quarterly
• Obama, McCain express cautious support for plan – Washington Post
• On bailout, candidates were surely themselves – New York Times
• Bailout effects to be felt in weeks – Associated Press
• Op-Ed, Paul Krugman: The 3 a.m. call – New York Times
• Lots of money and uncertainty – Washington Post
• Op-Ed, Michael Barone: Do markets work or don’t they? – Washington Times
• Analysis: Dr. Paulson’s tough medicine – Washington Post
• Analysis: First step on a long road – New York Times
• Op-Ed, Lawrence Summers: A bailout is just a start – Washington Post
• Op-Ed, Robert Samuelson: Bankrupt economics – Washington Post
• Op, Ed, Joel Berg: No rescue for the hungry – Washington Post
• Treasury would emerge with vast new powers – New York Times
• Foreclosed properties a suburban headache – Chicago Tribune
• Op-Ed, Clarence Page: How to avoid next bailout – Chicago Tribune

Video: Henry Paulson on ‘60 Minutes’ September 28

Watch CBS Videos Online

Bailout Deal Bullet Points & Coverage – Sunday A.M.

Bush Administration and Congressional officials came to terms on the proposed $700 billion Wall Street bailout early Sunday morning reports the New York Times, Washington Post, and other media outlets. Find clips of the stories this morning after the bullet points of the deal’s terms. The media are reporting that Congressional staff worked through the early morning hours of Sunday and will continue to work until the deal is in bill form. Votes in both houses of Congress are expected late Sunday or early Monday.

Highpoints of Bailout Deal

• The $700 billion would not be released in its entirety at once. Funds would be made available to Treasury in a first installment of $250 billion, a second installment of $100 billion, and a final installment of $350 billion. Congress would have the right of refusal at each step of the process.
• Pay limits will be put in place for executives of companies who make use of the government bailout.
• A Congressional oversight panel will be empowered to oversee Administration and Treasury implementation of the bailout.
• In some cases, the federal government will receive an equity stake in companies participating in the bailout.
• Conflict-of-interest rules will be implemented for firms who contract to help Treasury run the bailout.

Bailout News

• Breakthrough reached in negotiations on bailout – New York Times
• Lawmakers reach tentative deal on bailout – Washington Post
• Lawmakers reach deal on bailout – Wall Street Journal
• U.S. reaches outline bailout deal – Financial Times
• U.S. Congress reaches tentative deal on bailout – Xinhua

Financial Crisis News Update – Thursday Late Night

Deal Now Stalled on Capitol Hill

• Tentative Accord Fails at White House Meeting – New York Times
• News Analysis: McCain’s Peril in Wading In – New York Times

  Senator John McCain had intended to ride back into Washington on Thursday as a leader who had put aside presidential politics to help broker a solution to the financial crisis. Instead he found himself in the midst of a remarkable partisan showdown, lacking a clear public message for how to bring it to an end.

• Leaders Wrangle over Bailout Terms – Wall Street Journal
• Wrangling holds up U.S. bailout – Financial Times
• Fed keeps banks afloat as money market crisis deepens – Reuters
• White House meeting fails to yield bailout deal – Washington Post

WaMu Fails

• JP Morgan to acquire WaMu deposits – Financial Times
• WaMu is largest U.S. bank failure – Reuters
• JP Morgan Chase purchases WaMu – Washington Post

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