Getbig.com: American Bodybuilding, Fitness and Figure
Getbig Main Boards => Politics and Political Issues Board => Topic started by: Soul Crusher on November 02, 2009, 11:12:22 AM
-
Geithner "Burned Billions" And Shafted Taxpayers (Again) In CIT
Henry Blodget|Nov. 2, 2009, 1:50 PM | 202 |2
PrintTags: Wall Street, Tim Geithner, Treasury
www.businessinsider.com
________________________ ________________
We had professor William Black on TechTicker this morning. A former regulator who handled the S&L resolution, Prof. Black remains appalled at how this latest round of bailouts has been handled.
Case in point? CIT Group. Once again, the white knight who stepped in to save the company--the U.S. taxpayer--gets completely hosed.
It didn't have to be this way, says Prof. Black. And the man responsible is Treasury Secretary Tim Geithner.
Peter Gorenstein: Another one of the nation's largest lenders has filed for bankruptcy. On the brink for months, CIT filed for Chapter 11 protection on Sunday.
The prepackaged plan allows CIT to restructure its debt while trying to keep badly needed loans flowing to thousands of mid-sized and small businesses. The plan keeps CIT's operations alive and makes it possible for the company to exit bankruptcy by year's end.
But here's the bad news: While senior debt holders will only lose 30% of their investment, we, the U.S. taxpayer, will lose the entire $2.3 billion we lent the company this summer.
William Black, professor at the University of Missouri-Kansas City School of Law is dumbfounded. "We put ourselves on the hook in a completely inept way where we lose first. We lose entirely as the taxpayers."
Black, a former top federal banking regulator, blames Treasury Secretary Timothy Geithner for negotiating such a bad deal on behalf of the American public.
His argument goes as follows:
The government was in no way obligated to lend the struggling CIT money and, in fact, initially refused to provide it bailout funds. More importantly, being the lender of last resort, the government should have guaranteed we'd be the first to get paid if CIT eventually filed Chapter 11. By failing to do so, "it's like he [Geithner] burned billions of dollars again in government money, our money, gratuitously," says Black.
Black believes the problem stems from regulators' fears that if the banks recognize a loss on the bad assets it will create a domino effect that will wipe out the entire financial system.
"If that's true we've got to get rid of capitalism," he warns, "because if we can't recognize losses in a capitalist system we have no future."
________________________ ________________________ ___________
Thank you Obama. You POFS!
-
"If that's true we've got to get rid of capitalism," he warns, "because if we can't recognize losses in a capitalist system we have no future."
Good point, although quantitative analysts and their Gaussian Copulas need to be shot first before we try that ;)
-
Good point, although quantitative analysts and their Gaussian Copulas need to be shot first before we try that ;)
Yet, when some kid robs an old lady and steals $20.00, he gets jail.
-
Print more money. Easy solution baby!
-
Whats a couple of billion these days anyway? The economy has hit bottom a few months ago and it's all sunshine and lollipops from here on anyway. ::)
-
Whats a couple of billion these days anyway? The economy has hit bottom a few months ago and it's all sunshine and lollipops from here on anyway. ::)
You're an idiot! The recovery started months ago! We are in a full-blown expansion now! Just look at the ISM numbers!
-
You're an idiot! The recovery started months ago! We are in a full-blown expansion now! Just look at the ISM numbers!
Damn, I must have been living under a rock. At least Im glad to hear things are getting better. How's unemployment? .0000005 %?
-
Print more money. Easy solution baby!
Bingo!