Today, Wall Street soared mightily because Obama sent trillions of taxpayer dollars in gifts.
Yesterday, Obama accepted yet another invitation from 60 Minutes . This time Obama’s star turn did not include his muscular, scowling, lantern-jawed wife. She was busy with her own pretend garden of arugula.
The not serious Obama laughed heartily and repeatedly. Why not? He’s having a great time on TV and at dinners with $100 a pound steak paid for by American taxpayers and Chinese creditors.
Obama is not a serious man. Obama’s “plans” are not geared to help the economy, but rather aimed at political goals. When the bill arrives to be paid, like the $100 a pound steak, American taxpayers will once again have to pay.
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Today Obama released the old George W. Bush Paulson plan on “toxic assets”. No surprise. Obama is the Third Bush Term. Franklin Roosevelt in the first couple of days completely restructured the failed finance system. Barack Obama is dedicated to band-aid the corrupt mess that passes for a finance system.
Today Barack Obama’s ventriloquist dummy and tax cheat, Tim Geithner, released a “plan” for Bad Bank Assets.
Paul Krugman, the former favorite Nobel prize winner of the Hopium addled, assessed the “plan” yesterday in a widely circulated blog post.
If the reports are correct, Tim Geithner, the Treasury secretary, has persuaded President Obama to recycle Bush administration policy — specifically, the “cash for trash” plan proposed, then abandoned, six months ago by then-Treasury Secretary Henry Paulson.
This is more than disappointing. In fact, it fills me with a sense of despair.
Krugman measures the surge wall of Obama’s Katrina
And now Mr. Obama has apparently settled on a financial plan that, in essence, assumes that banks are fundamentally sound and that bankers know what they’re doing.
It’s as if the president were determined to confirm the growing perception that he and his economic team are out of touch, that their economic vision is clouded by excessively close ties to Wall Street. [snip]
Right now, our economy is being dragged down by our dysfunctional financial system, which has been crippled by huge losses on mortgage-backed securities and other assets. [snip]
And so the plan is to use taxpayer funds to drive the prices of bad assets up to “fair” levels. Mr. Paulson proposed having the government buy the assets directly. Mr. Geithner instead proposes a complicated scheme in which the government lends money to private investors, who then use the money to buy the stuff. The idea, says Mr. Obama’s top economic adviser, is to use “the expertise of the market” to set the value of toxic assets.
But the Geithner scheme would offer a one-way bet: if asset values go up, the investors profit, but if they go down, the investors can walk away from their debt. So this isn’t really about letting markets work. It’s just an indirect, disguised way to subsidize purchases of bad assets.
Remember when Big Pink was mocked for the argument “Obama is the Third Bush Term”?
The likely cost to taxpayers aside, there’s something strange going on here. By my count, this is the third time Obama administration officials have floated a scheme that is essentially a rehash of the Paulson plan, each time adding a new set of bells and whistles and claiming that they’re doing something completely different. This is starting to look obsessive.
Remember when Big Pink was attacked for the statement that Obama is a boob and a dud?
But the real problem with this plan is that it won’t work. Yes, troubled assets may be somewhat undervalued. But the fact is that financial executives literally bet their banks on the belief that there was no housing bubble, and the related belief that unprecedented levels of household debt were no problem. They lost that bet. And no amount of financial hocus-pocus — for that is what the Geithner plan amounts to — will change that fact.
Big Pink is not alone in denouncing the TOTUS Boobery Tim foolery:
Chinese Premier Wen Jiabao softly announced a couple of weeks ago that his government, which holds nearly $700 billion in U.S. treasury bonds, was concerned about the wisdom of Obama’s policies.
Over the past week the combination of alarming economic news and lighter-than-air presidential showbiz appearances and gaffes has multiplied. Last Thursday the U.S. government announced a colossal $1.2 trillion bailout plan to rescue America’s banks. That same evening Obama appeared with Jay Leno on NBC’s “The Tonight Show.” The first sitting president ever to appear on the show made an unintentionally insulting gaffe, laughingly comparing his poor bowling skills to those of the physically disadvantaged competitors of the Special Olympics. The day before, on March 18, the president took part in the NCAA picks on ESPN. No sitting president has ever done that before either. [snip]
President Franklin Delano Roosevelt, who inherited the worst economic crisis in American history and eventually led the nation out of it, was famous for his joyous good cheer and infectious love of life. But his national media appearances, though many, were never trivial. FDR’s legendary fireside chats were all serious lectures to and engagements with the American people to discuss the nature of the many problems facing the country and explain why the president was taking the actions he regarded as appropriate to solve them.
Why cancel it? Because it won’t solve the problem and it will waste more taxpayer money. I know nothing about politics, but my hunch is that people won’t be too happy when they find out that more of their money is going to enrich further hedge funds and private equity firms whose partners make bigger bucks — one of them made $3.7 billion in 2007 alone — than the bankers who got $16 billion in bonuses from taxpayer pockets in 2008.
Obama is looting the economy to help his friends (remember when Big Pink was attacked for saying just that?):
Here’s what the toxic waste plan looks like to me. Three of the world’s wealthiest investors came up with an idea to use taxpayer money to enrich themselves even more. These three have already played the U.S. for suckers:
PIMCO’s Bill Gross who already talked the U.S. into bailing out his investments in Fannie Mae (FNM) and Freddie Mac (FRE) and now manages two big government investment programs,
Berkshire Hathaway’s (BRK.A) Warren Buffett whose 20 percent stake in Moody’s (MCO) makes him strangely mute about Moody’s role in giving toxic waste AAA ratings which fueled the financial crisis, and
Goldman Sachs Group’s (GS) Lloyd Blankfein whose firm got $12.9 billion in bailout money from American International Group’s (AIG) $170 billion bailout fund.
Their plan is simple: private investors get the profits from buying toxic waste and taxpayers cover the losses. How so? The FDIC would run an auction for a lender to sell, say, $10 million worth of residential mortgages. If the winning bidder — a hedge fund or private equity firm — paid $8 million, the FDIC would lend money to pay for those mortgages and then would cover 75 percent of the investor’s losses. Treasury would contribute 80 percent of the rest of the cost of the loans.
As I see it, this means that hedge funds and private equity firms will pay virtually nothing for the assets, the taxpayer will incur most of the losses and all the profits, if any, from buying these assets will go to the hedge funds and private equity firms. And since the FDIC and the so-called Public Investment Corp. — the public/private partnership that will buy the assets — can only buy $500 to $750 billion worth of the loans, you’ll create two other programs whose details have not been worked out.
The Toxic Plan, like Obama and Geithner, is toxic:
What’s wrong with this idea? Here are six things that come to mind:
It’s too small to buy enough of the toxic waste. If my estimate is correct, there is $13 trillion worth of toxic waste — mortgage-backed securities and collateralized debt obligations — that’s been issued. This $1 trillion program only buys up 8% of that total. This is not enough to make a difference.
It does not deal with the pricing problem. [snip] …it will leave taxpayers with an enormous loss. The pricing problem could make the whole idea a non-starter since neither buyer nor seller will agree on a price.
It’s a government program for the already wealthy. Berkshire Hathaway, PIMCO, and Goldman Sachs are already very wealthy and your program will grant such investors government contracts to manage these assets. And it looks like they could get to invest as well so there’s a good chance they’ll have inside information from their advisory role that they can use to enrich themselves further.
Taxpayers are likely to lose money. This plan is too heavily skewed to enrich the private interests who will invest in these assets. As the example above illustrates, the government will take the risk if private investors overpay and the collateral for the government loans is illiquid and likely to be worth little — therefore government loan losses will likely be high as well.
Lack of detail could spook investors. [snip]
Money that could be lent directly will go into a black hole. Perhaps the worst part of the plan is that it’s not going to get credit flowing into the economy. By creating new banks, the money being used to prop up the zombie banks could be lent directly to those individuals and businesses who would be in a position to use that money wisely and pay it back. Instead, the hundreds of billions of dollars from your toxic waste proposal will go to zombie banks that will not get enough toxic waste relief to boost lending.
Obama can’t be trusted and Obama is a boob.
Obama can’t be trusted and Obama is a boob. And as Democrats know – because we said it enough and yelled it enough – during the George W. Bush years: The fish rots from the top.
Obama can’t be trusted and Obama is a boob and Obama is toxic. It is not just the plans that are toxic.
Like a fisherman who pulls in a three-eyed fish from a toxic lake, the solution is to throw the corrupt Chicago crimelords, and Obama back into the slimy waters of Lake Michigan along with his lantern jawed, muscular, scowling, wife.