Fleecing of the public continues unabated

[Donnachaidh]

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/04/23/ED1Q1773I4.DTL

We are being robbed big-time, but you can't say we haven't been warned. Not after the release Tuesday of a scathing report by the Treasury Department's special inspector general, who charged that the aptly named Troubled Asset Relief Fund bailout program is rife with mismanagement and potential for fraud. The IG's office already has opened 20 criminal fraud investigations into the $700 billion program, which is now well on its way to a $3 trillion obligation, and the IG predicts many more are coming.

Special Inspector General Neil M. Barofsky charged that the TARP program from its inception was designed to trust the Wall Street recipients of the bailout funds to act responsibly on their own, without accountability to the government that gave them the money.

He pointed to the example of AIG, which has acted as a conduit of funds to the banks it had insured without being required to tell the government what it is doing: "Failure to impose this requirement with respect to the injection of yet another $30 billion into AIG would not only be a failure of oversight, but could call into question the credibility of the government's efforts."

:snip:

For all of its criticism of the original program, designed by the Bush administration, the report was equally severe in denouncing the Obama administration's plan to partner with hedge funds and other private capital groups to buy up the "toxic" holdings of the banks. Charging that the plan carries "significant fraud risks," the inspector general's report pointed out that almost all of the risk in this new trillion-dollar plan is being borne by the taxpayers.


More at the link above --

[dkf]

1. We are not "giving" funds, we are loaning funds at 5% interest

which is higher than some mortgage rates nowadays.

[ThomCat]

3. Are they actually being expected to pay it back.

Or is it a write-off?

If we aren't being told where the money is going, then how do we know who is supposed to pay it back?

[glitch]

4. Default looms rather large on the horizon.

and they don't have enough covering assets to seize should they do so. We'll have to see.

[truedelphi]

5. Me thinks the episode of the South Park

series called "Margaritaville" explained everythig nicely. With quite a few laughs thrown in.

According to Kucinich, the Banks that get the Billions and billions in funds might not ever offer any of it as loans to normal people, but might instead save it till they can buy up utilities. Then once there are no longer any public-owned utilities, and they can send us all hugely increased bills for things like our monthly water useage, they probably will pay the money back.

But we the tax payers and consuemrs, are so screwn.

[dkf]

6. They are supposed to be paying interest on it and pay the entire thing back in 3 years.

Like I said...its a loan.

Except for Citibank because they are turning theirs into common stock, which diluted all the current shareholders. Eventually the Government will sell their shares of common stock back to the public.

[xchrom]

2. recommend

[D-Lee]

7. Here are some questions which should interest DUers

First, doesn't it look as if the Repugs and Tea Baggers want to make a fuss NOW about TARP spending -- BEFORE the funds are repaid?

A lot of banks and institutions seem to be planning to pay back early to get out from under restrictions and transparency ... which will take a lot of steam out of the complaints about how much the program costs (and reduce the deficit).

Second, the banks and financial institutions are complaining about transparency and financial reporting requirements. What I don't understand is -- given that so many issue stock and are subject to SEC reporting requirements -- what exactly is it that they feel they should not have to disclose? And whatever that information might be, shouldn't it be disclosed in reports to shareholders and the SEC?