December 23, 2008 8:48 AM
Who knows where the bailout money went? Don't ask the banks
Thanks to online banking, you can have a down-to-the-penny accounting of just how much money you have in your account.
But if you want to know what the banks are doing with the $700 billion in federal bailout funds? Well ...
After receiving billions in aid from U.S. taxpayers, the nation's largest banks say they can't track exactly how they're spending the money or they simply refuse to discuss it."We've lent some of it. We've not lent some of it. We've not given any accounting of, 'Here's how we're doing it,' " said Thomas Kelly, a spokesman for JPMorgan Chase, which received $25 billion in emergency bailout money. "We have not disclosed that to the public. We're declining to."
The Associated Press contacted 21 banks that received at least $1 billion in government money and asked four questions: How much has been spent? What was it spent on? How much is being held in savings, and what's the plan for the rest? None of the banks provided specific answers.
"We're not providing dollar-in, dollar-out tracking," said Barry Koling, a spokesman for Atlanta, Ga.-based SunTrust Banks Inc., which got $3.5 billion in taxpayer dollars.
Some banks said they simply didn't know where the money was going.
"We manage our capital in its aggregate," said Regions Financial Corp. spokesman Tim Deighton, who said the Birmingham, Ala.-based company is not tracking how it is spending the $3.5 billion it received as part of the financial bailout.
The answers highlight the secrecy surrounding the Troubled Asset Relief Program, which earmarked $700 billion - about the size of the Netherlands' economy - to help rescue the financial industry.
The Treasury Department has been using the money to buy stock in U.S. banks, hoping that the sudden inflow of cash will get banks to start lending money. There has been no accounting of how banks spend that money.
EARLIER:
Stop me if this is a surprise.
Associated Press reports that banks getting taxpayer bailout funds doled out nearly $1.6 billion in salaries, bonuses and other benefits in 2007.
That amount, spread among the 600 highest paid bank executives, would cover the bailout money given to 53 of the banks that have shared the $188 billion that Washington has doled out in rescue packages so far.Some banks trimmed their executive compensation in the face of faltering performance that foreshadowed the current economic crisis, but they still granted multimillion-dollar packages. Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, the AP review of federal securities documents found.
Such bonuses amount to a bribe for executives "to get them to do the jobs for which they are well paid in the first place," said Rep. Barney Frank, the Massachusetts Democrat who chairs the House Financial Services committee.
"Most of us sign on to do jobs, and we do them best we can," said Frank. "We're told that some of the most highly paid people in executive positions are different. They need extra money to be motivated!"
December 22, 2008
12:28 PM
Ben-End Corporate welfare writes:
Any one up for a tax revolt? Really, let's not pay our taxes for 2008. Now that is change I can believe in.
December 22, 2008
12:34 PM
history buff writes:
http://www.youtube.com/watch?v=MJJN9qwhkkE
December 22, 2008
12:44 PM
SASQUATCH writes:
At today's prices, GM's total market capitalization (market price X c/s outstanding) is a pissant $2.27 billion. Yet this same company is in line to grab the lion's share of the recently announced $17.4 billion bailout downpayment. Chrysler, which is a private company with no market capitalization (although there is some value involved) gets the rest. Combined, they are getting 7.7X their market cap via a taxpayer bailout. Is the taxpayer getting his money's worth? Here's a better plan:
Why not just buy the combined mess (at market rates) for a few billion dollars, break it up, and then give the different plants and various facilities to Toyota (with a market cap of over $100 billion), Nissan, Volkswagen, BMW. Honda, Subaru, etc. and be done with it--thereby avoiding the next $100 billion in needed bailout money. We could even pay each successful participating transplant $1-2 billion for their trouble and to ease the financial burden that could accompany the ownership transition. Jobs would saved and we could exit with a new and improved auto industry without savaging the taxpayer.
As to the other money going to financial institutions, bonuses should be completely out of bounds--they weren't earned or deserved--and dividends should be capped or frozen. These firms should not be allowed to purchse Chinese banks as did one big player. These constraints will likely compromise their ability to function as businesses while participating in capital markets, but that's a price rightfully demanded by the new owners--the taxpayers.
The TARP was originally targeted as a way to surgically remove toxic assets from the system. In just a few short weeks, however, it has morphed into a "whater it takes" free (money) for all with new rules every 10 minutes. Nobody is accountable, nobody is responsible and there is no transparency. This both troubles me and pisses me off. Adam Smith must be doing flips in his grave.
That's my 2 cents.
December 22, 2008
12:50 PM
gr8fuldude writes:
HBuff -
Back at 'cha. I am shocked, shocked to see that bailout money is being wasted in such a manner.
http://www.youtube.com/watch?v=nM_A4Skusro
BTW on your company lunch this week, try the wood-fired shrimp. My wife tried it yesterday and loved it.
December 22, 2008
1:29 PM
history buff writes:
I wish I could get a bailout.
http://www.youtube.com/watch?v=LHacDYj8KZM&feature=related
December 22, 2008
2:06 PM
history buff writes:
Just because the economy is going down the tube, it doesn't mean we can't enjoy the Christmas season.
http://www.youtube.com/watch?v=uv80tjuzMps
December 22, 2008
2:10 PM
Shaggy writes:
Heres the real kicker.
Now that they got the bailout we are not even privy to know if they are even loaning it out or where it is going, even though we are the loaners.
This bailout BS is the biggest piece of BS since Barry started running his campaign.
I have no idea why Bush has been pushing to bailout everyone unless he is afraid to let them fail under his watch.
Now Barry wants to spend over a trillion in new stimulus money.
Me bets inflation will set in soon.
Hello to a ten dollar loaf of bread.
December 22, 2008
2:12 PM
Shaggy writes:
Ooops forgot the link.
Wouldn't want to be accused of being a liar @ RTL.
http://hotair.com/archives/2008/12/22/surprise-banks-wont-tell-where-bailout-money-goes/
December 22, 2008
2:19 PM
Shaggy writes:
Heres a better link.
http://news.yahoo.com/s/ap/20081222/ap_on_bi_ge/meltdown_secrets
What a joke our represenatives have become.
I bet these execs are laughing their arses off at the stupidity of our Government to blindly sign a blank check to them without having to provide any kind of credibility.
This is exactly why we are in this mess because the Banks didn't require any accountability.
They just wanted the books to look good.
December 22, 2008
2:38 PM
Anonymous writes:
Any chance these execs can be lined up for a public shoe throwing event???
December 22, 2008
3:37 PM
Sally Johnson writes:
Hey all you bailout ranters, visit http://www.rantrave.com/Rant/I-Have-Had-It-with-THE-Bailout.aspx, post your comment and help support our nationally prominent ranter Coloranter Raver who rants near daily about issues of national political and economic concerns!
December 22, 2008
3:43 PM
Very Punny writes:
Anon @2:38 - I would suggest a good old fashioned stoning instead. I would even provide music. I would suggest (you'll love this)..."We Will Rock You"...
December 22, 2008
4:13 PM
Forest writes:
Sas, excellent thinking. YOU should get a hefty bonus for your input. I value your 2 cents worth at about $10 million.
Punny- I love it, take a $mil from TARP for, ah heck, no reason, just take it, everyone else is!
Whenever someone in power panics at a crisis, the smart money yells 'throw money at it (us) to save the day'(and make yourself look good). Gee, this makes me think about the 'global warming crisis'. Emergency! emergency!, do something big and do it fast, no time for thinking, we gots us a real 'mergency!!!
sheeeshhh
December 23, 2008
8:46 AM
JMH writes:
You mean there is no accountablity and oversight from the Bush administration? Will suprises never end? I'm just shocked!!!
Actually knew this would happen! Can't wait for an adult to finally be at the helm in this country... Is it just me or is it taking forever until January 20th?
December 23, 2008
9:10 AM
Tree writes:
JMH-
"I'm just shocked". I'm still laughing from the movie clip 8dude posted yesterday from Casablanca.
8dude- Post that scene again!!
December 23, 2008
9:17 AM
Tree writes:
JMH-
"I'm just shocked". I'm still laughing from the movie clip 8dude posted yesterday from Casablanca.
8dude- Post that scene again!!
December 23, 2008
1:35 PM
SASQUATCH writes:
WHO IS RUNNING THIS TRILLION DOLLAR FANDANGO ANYWAY...BERNIE MADOFF?
Where is the money...who got the gelt? A trillion dollars and no money trail to follow? No wonder why SS and Medicare are broke!
And now Obamba wants another trillion dollars? To who and for what? Where? Why?
Why didn't we put Kozloski, Ebbers, Skilling, Lay and Rigas in charge? At least the money trail led directly to them and they were around long enough to arrest!
Who is in the wheelhouse here? Is this the USA or the Exxon Valdez?