It’s either gone surreal or we’ve entered the realms of financial pornography.
So far, at least 23 American banks signed up to fellate the US Treasury-demanded cash injections from the US$250 Billion intended to prop up the banks by buying stock in them and to encourage lending.
Well, that was the theory anyway.
The bottom line is that the onward lending to the floundering consumer and the anxious business owners isn’t happening.
In the last 24 hours, the US Treasury Secretary announced that TARP (the acronym for the program to purchase toxic assets from banks) isn’t working and has been shelved. Instead, the US Treasury will directly purchase shares in banks.
Or, apparently anyone else that needs money......like the big 3 US automakers lining up for US25 billion on the basis that as legacy companies they are too important to fail…..American Express looking at massive credit card defaults and a major purveyor of securitized credit card instruments, now imploding, has become a “bank holding company” in the same way as Morgan Stanley and Goldman Sachs, with greater access to federal funding.
But the real figures are likely to be mind-boggling. Forbes.com in an article entitled, “Washington’s $5 Trillion Tab”, dated 12 November 2008 cites data from CreditSights in an attempt to itemize where the money is going.
But what are we actually witnessing? For starters, a total lack of oversight as to where the money is going and a refusal to fully identify recipients of US Treasury largesse. Bloomberg's report of 10 November 2008 stated that the Federal Reserve was refusing to identify who was receiving US$2 Trillion dollars of loans courtesy of the American taxpayer or what securities the banks were pledging in return. Congressional oversight was allowed as part of the US700 Billion dollar TARP, but far more than this is being lent out in separate rescue programs that did not require congressional approval. Hardly surprising that Bloomberg filed federal legal proceedings in the US under the Freedom Of Information Act. And what else are we looking at? Crony capitalism, the evisceration of retirement savings and ultimately, a global increase in the retirement age.
© 2008 Sanjeev Aaron Williams All Rights Reserved
So far, at least 23 American banks signed up to fellate the US Treasury-demanded cash injections from the US$250 Billion intended to prop up the banks by buying stock in them and to encourage lending.
Well, that was the theory anyway.
The bottom line is that the onward lending to the floundering consumer and the anxious business owners isn’t happening.
In the last 24 hours, the US Treasury Secretary announced that TARP (the acronym for the program to purchase toxic assets from banks) isn’t working and has been shelved. Instead, the US Treasury will directly purchase shares in banks.
Or, apparently anyone else that needs money......like the big 3 US automakers lining up for US25 billion on the basis that as legacy companies they are too important to fail…..American Express looking at massive credit card defaults and a major purveyor of securitized credit card instruments, now imploding, has become a “bank holding company” in the same way as Morgan Stanley and Goldman Sachs, with greater access to federal funding.
But the real figures are likely to be mind-boggling. Forbes.com in an article entitled, “Washington’s $5 Trillion Tab”, dated 12 November 2008 cites data from CreditSights in an attempt to itemize where the money is going.
But what are we actually witnessing? For starters, a total lack of oversight as to where the money is going and a refusal to fully identify recipients of US Treasury largesse. Bloomberg's report of 10 November 2008 stated that the Federal Reserve was refusing to identify who was receiving US$2 Trillion dollars of loans courtesy of the American taxpayer or what securities the banks were pledging in return. Congressional oversight was allowed as part of the US700 Billion dollar TARP, but far more than this is being lent out in separate rescue programs that did not require congressional approval. Hardly surprising that Bloomberg filed federal legal proceedings in the US under the Freedom Of Information Act. And what else are we looking at? Crony capitalism, the evisceration of retirement savings and ultimately, a global increase in the retirement age.
© 2008 Sanjeev Aaron Williams All Rights Reserved
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