Monday, July 20, 2009

$23.7 Trillion in bailout obligations... What!?

It looks like all my dreams are coming true much sooner than I'd imagined (sarcasm, btw). Not only are the TARP bailouts going to cost the American people vastly more than the $700 Billion - It's being run in about as an opaque, inept and corrupt manner as even I could have imagined.

According to this report by Silla Brush at The Hill;
"Neil Barofsky, the special inspector general over the Troubled Asset Relief Program (TARP), will tell lawmakers on Tuesday that taxpayers are being left in the dark about what banks are doing with bailout money, don't know the value of the government's investments and will not know the full extent of how the money is invested.

Barofsky said that while the TARP program that Congress passed amounts to $700 billion, the total federal government support since 2007 for the economy and the financial sector could reach a far higher figure of $23.7 trillion. The government has committed significantly more money through a variety of other federal agencies and programs.

While some steps have been taken, “it has repeatedly failed to adopt recommendations that [Barofsky] believes are essential to providing basic transparency …” Barofsky intends to tell lawmakers, according to prepared remarks obtained by The Hill."
You read that right.

The "top watchdog" inspector overseeing the bailouts is noting that the total liabilities are in the range of $23,700,000,000,000 - this, notes Karl Denninger, is:
"nearly double the nation's GDP in debt commitments and more than 33 times the amount authorized by Congress."
His shock & outrage (and mine) continues by lamenting:
"How anyone can believe our banking system or indeed our nation's Treasury can survive the exposure of $24 trillion dollars, twice our GDP, is beyond me."
It's beyond me too...

This is insane. The counter-argument will, of course, be that TARP will make it's money back when it sells off the properties and gets a return on its investments. But you'd have to be a right twit to believe that, wouldn't you? The whole reason TARP was done in the first place was to kick trillions of tax-payer dollars to Hank Paulson's buddies at Goldman Sachs buy up houses that no one else wanted and which were overvalued to the point that they were deemed "toxic" - thus the "Toxic" Asset Relief Program. Well those houses aren't any less toxic now than they were before, and instead of banks losing a few billion, the American people (including all the ones like me who neither owned a house nor have a big stock portfolio/401k) are now going to be losing TRILLIONS instead.

Add to the criminally bad math actual crimes...
"In a separate report issued on Monday, Barofsky's office noted that banks have used government money for purposes other than increased lending, whether to build up capital cushions, repay debt or help finance acquisitions of other banks. His office is in the process of posting online responses to a survey of 360 banks receiving government aid.

Meanwhile, Barofsky's office has opened 35 criminal and civil investigations into issues including suspected accounting fraud, securities fraud, insider trading, mortgage servicer misconduct, mortgage fraud, public corruption, false statements and taxes."

And you get unadulterated awesome.

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