Obama Sponsor of greed.

[Jim Craik]

Pete,

The Troubled Asset Relief Program (TARP) is a program of the United States government to purchase assets and equity from financial institutions to strengthen its financial sector that was signed into law by U.S. President George W. Bush on October 3, 2008. It was a component of the government's measures in 2008 to address the subprime mortgage crisis.

Pete, why don't you check stuff before you post it.

It's very easy.........................

I know that you and many Americans do believe (WRONGLY) that Obamsa was responsable for TARP, bacause Fox and other consevative "news" outlets continually blame him, but they are a bunch of liers.

Now it is true that as the junior Senator from Illinois, he and a majority did vote for it, but you are wrong to say that he could have vetoed it.

Who's the Hypocrite?

 

[Pete McCluskey.]

Jim ,was Obama president during the bank bailout?
Could he have made the decision not to bail them out?

 

[Jim Craik]

Pete,

Pay attention!

George Bush signed the bank bailout bill October 3rd, 2008.

Obama became President in 2009.

Pete if you keep this up, you will have to change your ("ACCURATE OBSERVATION") tag line.

But then you are in good company!!!!!!!


More Americans think Obama, Not Bush, Enacted Bank Bailouts, Poll Shows

<!-- body start -->

Nearly half of Americans incorrectly think President Obama started the the bank bailout program, otherwise known as the Troubled Asset Relief Program (TARP), a new poll shows.

Just 34 percent of Americans surveyed by the Pew Research Center correctly said that TARP was enacted by the Bush administration. Almost half -- 47 percent -- think Mr. Obama started the bank bailout, according to the survey, conducted July 1-5. There was no partisan divide on the issue.

The TARP program was created in 2008 to stabilize the financial system.

 

[Tom P]

Pete,

Pay attention!

George Bush signed the bank bailout bill October 3rd, 2008.

Obama became President in 2009.

Pete if you keep this up, you will have to change your ("ACCURATE OBSERVATION") tag line.

But then you are in good company!!!!!!!


More Americans think Obama, Not Bush, Enacted Bank Bailouts, Poll Shows

<!-- body start -->

Nearly half of Americans incorrectly think President Obama started the the bank bailout program, otherwise known as the Troubled Asset Relief Program (TARP), a new poll shows.

Just 34 percent of Americans surveyed by the Pew Research Center correctly said that TARP was enacted by the Bush administration. Almost half -- 47 percent -- think Mr. Obama started the bank bailout, according to the survey, conducted July 1-5. There was no partisan divide on the issue.

The TARP program was created in 2008 to stabilize the financial system.

No, Obama didn't start the bailout, a Democratic Congress and Senate (2007-2009) under GW drafted it up , passed it and gave it to GW. Until that point GW had 12 vetoes, 3 of which were overturned by a democrat super majority, had he vetoed TARP it would have been overturned by the democrat majority.

 

[Pete McCluskey.]

Jim ,was Obama president during the bank bailout?
Could he have made the decision not to bail them out?

Jim, you are doing what you are very quick to accuse others of,that is avoiding the question. Could Obama have made the decision not to bail the banks out?
I really do not know the answer.

 

[Tom P]

Jim, you are doing what you are very quick to accuse others of,that is avoiding the question. Could Obama have made the decision not to bail the banks out?
I really do not know the answer.

Sure he could have, the democrats still had control of the Congress and Senate until 2011. It was "Bush's fault" prior to January 2007, that's when the democrat majority took over. Bush was president but the democrats were driving the car. "Bush's fault" covers a lot of electorate ignorance.

 

[Jeff Young]

A lot of inaccuracies in this thread...

Let's start from the start. A whole host of factories conjoined to cause the meltdown in 2008. They ranged from the US government's policy to encourage home ownership as far back as the 50s in the form of tax beaks, to their guaranteeing of loans through Freddie Mac and Fannie Mae, to the government's decision not to regulate credit default swaps as securities.

But those were just pieces of the puzzle. Remember, most of the toxic loans were not with Freddie and Fannie, and were not backed or guaranted by the government. Banks were doing things like -- and it's the free market right? they should be able to do what they want! lol -- loans up to 120% of a home's value, or loans to people who had been through bankruptcies, or loans based on a person simply stating what their income was. Why did banks do this? Because the mortgage market changed fundamentally in the 2000s. It went from a low risk, low reward arm of banking operations to THE cash generator. Banks began to look for and find zillions of ways to make money off of a single loan transaction.

Let me explain. In a traditional mortgage situation, the bank would loan you $150k over 30 years and get say 8% interest. That has to cover all of the bank's costs, etc. and the margin is fairly low, but the risk is acceptable because the bank makes the call on whether to make the loan and is tied to the borrower for the entire loan period.

Here's what changed in the 2000s. Banks began to make the loan, then package and sell them as a security. That divorced the bank from the day to day risk of a default and encouraged the banks to just make more and more loans -- both 1st mortgages and then the boom in home eequity/seconds -- in order to generate more revenue. As the market heated up, the competition became fierce. BofA with a ton of overhead had to compete with small shops offering low rates and no points who simply made the loan, bundled it up and sold it.

Banks/lenders became totally divorced from the risk of the mortgages they were actually making.

What happened next? Banks and investment firms began to trade these securities consisting of packaged mortgages, and engaged in hedging transactions called credit default swaps that were in fact bets that the mortgages would default.

So banks ended up with tons of assets on the books that were effectively securities tied to the value of housing prices.

Just like every other bubble, this began to burst in 2007 and then into 2008. Housing prices had become superheated and far exceeded real worth and began to come crashing down.

This had a liquidity killing effect on banks. Note that last sentence. It is really what the September 2008 collapse was about.

What happened was this. Banks had these assets on their books. Since a bank's ability to loan is set at a loaned fund to asset ratio, as the value of the bank's assets went down, the less the bank could loan out.

And the poop hit the revolving blades in September 2008. Banks ran out of loanable funds. The credit markets totally shut down for 4-5 weeks. From the above, I don't think any of you really understand the nature of the crisis we were facing. "Letting banks fail" was simply not an option.

Why you say? Because it wasn't just the banks that would have failed. Millions of legitimate businesses, city and state governments, etc. depend on credit to operate. When the banks could no longer lend, these entities that borrowed short term to make payroll, pay for supplies, etc. were nearly killed. I had a 60k line of credit at the time that I used to make quarterly estimated tax paymens and then would pay off when I got a distribution from the law firm. Bank cut it 40% one day without telling me. Small example of the much bigger problem.

The banks that did have loanable funds weren't lending as they feared the worst -- that Citi and BofA go under.

For a 4-6 week period in 2008, you could not borrow money.

Bush, Paulson, Obama, whoever, all had not choice. All would have done the same thing. And they and the Fed did carry the day in getting the credit markets "unstuck." We were on the edge of financial collapse (my law firm at the time was BofA's largest outside counsel) and just barely pulled back.

None of this has anything to do with Obama's speech in Kansas. He's right by the way. We totally overvalued the services provided on Wall Street. That drove the creation of new and "ingenious" ways of making money off of routine, mundane transaction. There is no reason a stock researcher should get a $600k bonus, or whatever. It was insane.

So I'm sorry, but it's not that I don't see any hypocrisy, it is that there isn't any. Bush/Obama had no choice with TARP. The alternative was not an orderly bankruptcy of the nation's largest financial instititons. It was meltdown and chaos.

And after holding their noses and saving these guys (and us) from disaster, later saying that the forces that drove us to the brink need to be reformed is not "hypocrisy." It's smart.

 

[Terry Oxandale]

I don't think anybody would have made a different decision. Allowing the huge impact on you and me would have been intolerable, regardless of how it would eventually be perceived by those watching Wall Street. Same with the automotive market. How many individual incomes were at stake with a defunct American auto manufacturer? Now that it's back on it's feet, one could say, "good job". If it had gone ahead and failed, then, "you're outta hear!", so this is why nobody else would have done anything differently. We are fooling ourselves to think anybody else in office during the last 3 years could have done any better, or any worse. But it's easy to opine on things that never happened, and explain why they shouldn't have happened, when nobody really understands all the complexities.

 

[Jeff Young]

Yes he could have. Congress passed TARP and appropriated the funds. The Treasury Department doled them out. The Treasury Department is part of the executive branch and the President could have stopped that.

Fortunately, neither he nor Bush did that.

Tom P's posting is wrong too -- these plans were actually written in Treasury and presented to Congress as "must haves." But it didn't matter. Congress, the Bush Administration, the incoming Obama Administration and the Fed all say the looming apocalypse and took the necessary (distateful) steps to avoid it.

Jim, you are doing what you are very quick to accuse others of,that is avoiding the question. Could Obama have made the decision not to bail the banks out?
I really do not know the answer.

 

[Pete McCluskey.]

Does all that mean yes Obama could have said no to the bailout?

 

[Tom P]

Yes he could have. Congress passed TARP and appropriated the funds. The Treasury Department doled them out. The Treasury Department is part of the executive branch and the President could have stopped that.

Fortunately, neither he nor Bush did that.

Tom P's posting is wrong too -- these plans were actually written in Treasury and presented to Congress as "must haves." But it didn't matter. Congress, the Bush Administration, the incoming Obama Administration and the Fed all say the looming apocalypse and took the necessary (distateful) steps to avoid it.

No it isn't
The bill was drafted by Congress, while the idea may have come from Treasury.

This from the Huff Post.
A bi-partisan majority in Congress responded by enacting the Troubled Asset Relief Program. The debate over this issue was heated. On October 3, 2008, when TARP became law, one member of Congress even went so far as to say, "I don't think it is too much of a stretch to say this may be the day America died.

The "bi-partisan" vote was actually Aye 241 democrats 19 republicans. No 166 republicans I guess it would have been seen as bi-partisan if one republican had vote aye.

 

[Jim Craik]

Jim, you are doing what you are very quick to accuse others of,that is avoiding the question. Could Obama have made the decision not to bail the banks out?
I really do not know the answer.

Pete,

I'm sorry if you get the impression I was avoiding the question, but if you go back and look, I answered them several time.

Right after the first post, in post #2, I said when the tarp passed when Bush2 was President.

In post #16 I said that when TARP passed Obama was the junior Senator from Illinois.

In post 21 I again gave the date tarp was signed by Bush. I then added statistics showing that most Americans wrongly thing Obama signed tarp.

In post #23 I again said the date that Bush signed the tarp bill.

So, Pete I really thought I had answered you many times, perhaps you just missed posts 2, 16, 21 and 23.

 

[Jim Craik]

Jim, Obama was president when the banks were bailed out,in his state of the union address he said bailing them out was a necessary evil.

He could have vetoed the bail out so at the end of the day it was his choice.

So I guess that makes him a hypocrite.
Do I think the banks are greedy? I think most are, but not all.[/QUOTePosted by Pete

************

Pete, Obama could not "veto" the bill as he was not President, George Bush was President, only the President can veto the bill and he signed it.

But as Jeff posted, Apparently later after becoming President he could have stopped any more funds, that I do not know.

But thank goodness they did not. If you question that, just Google Herbert Hoover 1929.

He refused to save the banks and the world economy tanked.

 

[Jim Rosenthal]

A couple of things: Pete, Obama could not have said no to the bailout. By the time he became President, it already existed and we were all stuck with it. Now- as the junior senator from IL, he could have voted "no". But that bill was going to pass. It had to. There was NO other choice at the time.

Do I think ALL banks are greedy? No, I don't, as I pointed out above. But I think the ones I mentioned- Bank of America, Chase/Morgan, WF (ought to be known as WTF IMHO) are very much greedy. I think they are also very poorly managed. Too big to succeed, as my friend Jon pointed out. And don't even get me started on Gold Man Sacks and the rest of the Wall Street investment bankers... what a bunch of fuckers.

For what it is worth, I think that economic history is likely to show that the TARP program will turn out to be a reasonable and prudent decision, in the long run. I also think that after TARP is paid back and the bailout money is back where it started, the banking industry will still have a shitty reputation, which it will deserve. Like I said further up, banking used to be a respected profession. Well, it still is, if you look hard enough. But you have to look DAMN hard.

 

[Jim Craik]

Pete,

Here is an analogy for you.

Suppose there was this guy, and his son made a mistake, he stole some money and got arrested.

Now this guy is angry, but as a father he knows his son is basicly a good kid. He does what he must, he goes down, bails out his son and repays the money.

So Pete, by bailing out his son, would you call the father a hypocrite if he then called his son among other things "greedy"?

 

[Tom P]

If bailing out the banks was taken by the banks in the proper way, no lavish parties, no huge bonuses, etc, etc, maybe people would have taken it a little better. But I for one, got the feeling that the banks, (not all but some) were going "hey fuck you, we're going to party", not even trying to hide it. That pissed me off!

 

[Pete McCluskey.]

Pete,

Here is an analogy for you.

Suppose there was this guy, and his son made a mistake, he stole some money and got arrested.

Now this guy is angry, but as a father he knows his son is basicly a good kid. He does what he must, he goes down, bails out his son and repays the money.

So Pete, by bailing out his son, would you then call the father a hypocrite if he then called his son among other things "greedy"?

Good analogy Jim, no I would not call the Father a hypocrite.

 

[Jim Craik]

Thanks Pete,

Sorry, I sometimes let things bother me way more than I should.

 

[Terry Oxandale]

Hats off to you guys for a very interesting string on this subject. I thoroughly enjoyed the points/counterpoints, without watching the discussion degenerate into an unpleasant experience.

 

[Jim Rosenthal]

Yeah, this one stayed civil. Good for everyone.