By notjustdirt ( February 23, 2009 at 3:15 pm) · Filed under Geithner, Wall Street, bailout, banking, banks, bernanke, bailout, banks, bernanke, consumer debt, default, Federal Reserve, Geithner, mortgages, TARP, toxi assets, Treasury, Wall St
It’s great that President Obama has put someone in charge of accountability on how the stimulus money will be spent at the state and local levels. In addition, President Obama warned Governors and Mayors across the nation that they will be called out if they waste the stimulus money outside of its original intent.
However, who is watching Tim Geithner, US Treasury Secretary, Ben Bernanke, Federal Reserve Chairman and the US banks on TARP money?
Americans owe a total of $17.4 trillion in debt. $14.8 trillion in mortgages and the rest in consumer credit such as credit cards.
Source: http://www.plunkettresearch.com/Industries/BankingMortgagesCredit/BankingMortgagesCreditStatistics/tabid/233/Default.aspx
How hard is it to figure this out? The government and the banks know exactly who owes what and where.
How can the banks blame the American consumers in one hand and be asking for bailout and tell Congress to arrest defaults in the other? In other words, banks and banking policies have no need to change?
If default rate is at 10% of debt value, that’s only $1.7 trillion that is at risk in principal. TARP is allocating $0.7 trillion so the difference is only $1.0 trillion. Why don’t we just put the $1.0 trillion of assets into bankruptcy courts and public auctions? Also, make it mandatory for all loans to convert all ARMs to Fixed. Toxic asset gone! Confidence restored! Unless there are more US banks are not telling on the commercial side as it relates to businesses and other toxic paper arrangements. If so, shame on the banks and further prove the current players need to be removed and further regulatory change is necessary.
All those in Washington and media are just making a simple problem more complicated than it needs to be so they can keep the same people in the banking industry in power.
The Federal Reserve have the exact numbers. Look at this pretty map:
http://www.newyorkfed.org/mortgagemaps/
Looking at the Fed’s own sampling data:
the “A” Pool of debt has the following:
ARM mortgages:
60+ days late = 12%
In Foreclosure Proceedings = 10%
Foreclosed = 5%
Fixed mortgages:
60+ days late = 5%
In Foreclosure Proceedings = 4%
Foreclosed = 2%
the “Subprime Pool”:
ARM mortgages:
60+ days late = 22 %
In Foreclosure Proceedings = 16%
Foreclosed = 10%
Fixed mortgages:
60+ days late = 12 %
In Foreclosure Proceedings = 4%
Foreclosed = 2%
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By notjustdirt ( February 23, 2009 at 12:36 pm) · Filed under Geithner, Wall Street, bailout, banks, congress, economy, fdic, bailout, banks, citibank, congress, fdic, Geithner, government, Wall St
Tell the White House and Congress this is not how a free market system works. We don’t prop up businesses that are poorly managed and operated and have failed on their own. We don’t support Board of Directors, CEO’s and the shareholders that empowered them who have failed in their mission. They made their decisions and they need to be accountable.
Bankrupt companies go to bankruptcy courts. They go through restructure and new owners take over the parts of the businesses that work and scrap the parts that don’t.
We should not be taking lousy deals just so incompetency can contiue to exist and bring the rest of the economy down with it.
Write the White House and Congress: www.demoskratos.com
Source: Watch Video
From The Business Insider, Feb. 23, 2009:
So Citigroup (C) has proposed that the US taxpayer and other preferred shareholders convert up to $75 billion of preferred stock into common stock, thus bolstering the company’s tangible equity and putting it in less desperate need of a complete takeover.
And what will the US taxpayer get for this preferred stock conversion? 40% of the company for some of its $45 billion of preferred, say reports. The reports add that Citigroup’s goal here is to keep the US’s ownership under 50%, so this won’t be a de facto nationalization.
Well, that’s nice for Citigroup…and another ream-job for taxpayers.
Citigroup’s common equity is currently worth $10 billion. If the US were to convert all $45 billion of its preferred at the current stock price, it should end up with 80% of the company, not 40%.
For the US to convert $45 billion of preferred to common and only get 40% of the company, Citigroup’s existing common equity would have to be valued at $65 billion, not $10 billion, and the conversion price would have to be about $10 a share. Or the US would only be able to convert $4 billion of its $45 billion, which wouldn’t help Citigroup’s tangible equity ratio much.
So is that what Citigroup is trying to do here? Persuade the US goverment to convert to common stock at a price miles above the current trading price, screwing the US taxpayer yet again?
Or does Citigroup have some other secret plan up its sleeve whereby it can take up to $75 billion of debt (preferred stock) off its books and not end up diluting its current shareholders 90%?
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By notjustdirt ( February 21, 2009 at 5:52 pm) · Filed under eric holder, new york post, news corp, racial issues, attorney general, cartoon, chimp, coward, eric holder, nation, new york post, news corp, racial issues, rupert murdoch
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