bail out

The Luck of the Irish

4leafIt seems Ireland is basically insolvent. All hail the banks.

The Ireland "Dr. Doom":

WHEN I wrote in The Irish Times last May showing how the bank guarantee would lead to national insolvency, I did not expect the financial collapse to be anywhere near as swift or as deep as has now occurred. During September, the Irish Republic quietly ceased to exist as an autonomous fiscal entity, and became a ward of the European Central Bank.

Morgan Kelly is an Irish Economist who is predicting an 80% drop in Ireland home prices. He estimates their own bank bail out is sinking their nation:

This €70 billion bill for the banks dwarfs the €15 billion in spending cuts now agonised over, and reduces the necessary cuts in Government spending to an exercise in futility. What is the point of rearranging the spending deckchairs, when the iceberg of bank losses is going to sink us anyway?

What is driving our bond yields to record levels is not the Government deficit, but the bank bailout. Without the banks, our national debt could be stabilised in four years at a level not much worse than where France, with its triple A rating in the bond markets, is now.

Goldman Sachs Paid Out $4.3 Billion of U.S. Taxpayer Money to Foreign Companies

Senator Chuck Grassley has received documentation from Goldman Sachs showing the top recipients of AIG money. The grand total is $4.3 billion. Below are the recipients and their amounts. As you can see, they are all foreign entities. In other words, U.S. taxpayer money, used to bail out AIG which in turn was used to pay off Goldman Sachs went straight out of the country and into foreign banks.

  1. DZ Bank AG Deutsche Zentrale-Genossenschafts Bank: $1.8 billion
  2. Banco Santander Central Hispano SA: $484 million
  3. Rabobank Nederland-London Branch: $182 million
  4. Zurcher Kantonal bank: $200 million
  5. Dexia Bank S.A: $105 million
  6. Calyon-Cedex Branch: $200 million
  7. The Hongkong & Shanghai Banking Corporation: $173 million
  8. Depfa Bank Plc: $126 million
  9. Sierra finance plc: $223 million
  10. PGGM Pensioenfonds: $47 million
  11. Natixis: $2 million
  12. Zulma finance plc: $416 million
  13. Stoneheath Re CRDV G: $68 million
  14. Hospitals of Ontario Pension Plan: $94 million
  15. Venice finance plc: $216 million
  16. KBC Asset Management NVD Star Finance: $191 million
  17. MNGD Pension Funds LTD: $69 million
  18. Infinity finance plc: $277 million
  19. Barclays Bank PLC: $27 million
  20. GSAM Credit CDO LTD: $13 million
  21. Signum Platinum: $38 million

Here Comes Barofsky

Neil Barofsky, SIGTARP, the TARP inspector general, is gunnin' for Wall Street. So reports Reuters:

The special inspector general for the government's bailout program said he would probe whether securities sold by Goldman Sachs Group Inc (GS.N) led to losses at AIG and if the American taxpayer was a victim of fraud.

Gets better:

Barofsky said he is in touch with the SEC and will possibly coordinate with the Department of Justice "to see if there are cases of fraud and if AIG and as a result, the American taxpayers, were victims of similar types of fraud."

Barofsky made the comments in response to questions from the ranking Republican on the Senate Finance Committee, Charles Grassley, at a hearing examining the TARP.

$50 Billion "Too Big to Fail" Bail Out fund may be History in Financial Reform Bill

Looks like we might be seeing some movement to stop Too Big to Fail for real, or we might just see some politickin' instead. Bloomberg is reporting:

Senate Democrats likely will scrap a proposal for a $50 billion fund to wind down big failing companies in an effort to draw Republican support for financial- overhaul legislation being considered later this week.

Senators Susan Collins and Olympia Snowe, both Maine Republicans who are seen as potential supporters of the bill, told reporters yesterday they oppose the fund. Treasury Secretary Timothy Geithner told Collins that the Obama administration also is lukewarm to the idea.

Here's a bit of good news, GM to pay back the government

Looks like GM has recovered (unlike Detroit):

General Motors Co., steadily returning to health after its near-collapse in 2009, said Tuesday it plans to pay off its government loans by June — five years ahead of schedule — and could report a profit as early as this year.

Remember all of the controversy and blasting of the U.S. auto industry?

Here is the past and current financial situation. GM may report a profit this quarter.

Possible Bernanke Smoking Gun on AIG Bail out

The Huffington Post is reporting there is a potential smoking gun on Bernanke.

Bernanke overruled his staff advising him to not bail out AIG.

A Republican senator said Tuesday that documents showing Federal Reserve Board Chairman Ben Bernake covered up the fact that his staff recommended he not bailout AIG are being kept from the public. And a House Republican charged that a whistleblower had alerted Congress to specific documents provide "troubling details" of Bernanke's role in the AIG bailout.

Below is the CNBC interview with Sen. Bunning (R-KY):