Money For Nothing, Chicks For Free
(Economy • Government)
Rewarding the big banking and auto-sector losers – whose short-sighted greed, ineptitude and lack of foresight brought us to this brink in the first place – seems to be paying us taxpayers just about the dividends we should expect, don’t you think?
Reminisent of the RTC savings and loan bailout of yesteryear, it seems to me about the equivalent of tossing billions of dollars of taxpayers’ money out of a 22nd story window.
Except if you tossed that much money out of a 22nd story window, quite a few taxpayers probably could be expected to pick some of it up, thereby exceeding stimulus benefits such as this:
Citigroup and Bank of America Corp., recipients of $90 billion in bailout funds from American taxpayers, are charging financial companies three times more to sell bonds under a U.S. – backed rescue program than government – controlled Fannie Mae and Freddie Mac pay to issue notes with similar maturities…Bank of America, which at $33.2 billion is the biggest issuer of government-guaranteed debt, paid itself and 10 co-managers 30 basis points to sell $8.35 billion of FDIC-backed bonds on Jan. 27, according to a filing with the U.S. Securities and Exchange Commission. The bank handled 93% of the bonds and collected at least $23.3 million in fees on the deal.
Citigroup, which has issued $19.6 billion of the notes, putting it third behind General Electric Capital Corp., paid itself and 12 co-managers $24 million, or 30 basis points, to underwrite the sale of $8 billion of bonds on Jan. 23 and Jan. 27, according to a securities filing. Citigroup distributed the bulk of the debt and paid itself at least $19.9 million in fees.
Get it? We’re basically contributing the money the IRS extorts from us to a couple of huge banks that really ought to be filing for bankruptcy, but instead now they can afford to extort money from the issuers of bonds, who sound suspiciously like government entities, which is to say, You and Me.
Call it an extortion circle-jerk if you like, and apparently we’re the jerks.
Meanwhile, down at Honest Bill’s OK Cars…
The price tag for bailing out General Motors and Chrysler jumped by another $14 billion Tuesday, to $39 billion, with the two automakers saying they would need the additional aid from the federal government to remain solvent.In return, the two companies also promised to make further drastic cuts to all parts of their operations, in the hope that they can eventually strike a balance between their bloated cost structures and a dismal market for new car sales.
G.M., for example, said it would cut 47,000 more of its 244,000 workers worldwide; close five more plants in North America, leaving it with 33; and cut its lineup of brands in half, to just four: Chevrolet, Cadillac, GMC and Buick.
OK, let me get this straight. So then if we agreed to give them another, say, $20 billion more than what they originally asked for instead of only $14 billion more, are they saying that they would then be willing to cut 100,000 more jobs instead of only 47,000?
Is that what we’re doing? Giving these people money straight from the Treasurery in order to induce them to fire as many of their employees as possible?
Because duh! we could make that happen much more quickly just by taking You-and-Me out of the equation as cuckolded middlemen, while allowing GM and Chrysler to just file for their inevitable bankruptcies sans government intervention, in the first place.
I swear to God, this RTC-re-run of a cluster(insert favorite expletive here) is almost exactly like watching a blind AIG board director try to feed a horse by stuffing hay up its ass.
→ B.Dunn, Feb 17, 2009, 05 36 PM
