The Bailout: The Bond Billionaires Piggybacking The American Taxpayer For Another Gilded Ride

As the outlines of the "bailout" package come into focus, initially limiting the bailout to redeeming assets from American institutions, the fine hand of the influence peddlers are already all over the program. Hardly out the door, as the New York Times reported as of this writing (9/21/08):

"Even as talks got under way, there were signs of how very much in flux the plan remained. The administration suggested that it might adjust its proposal, initially restricted to purchasing assets from financial institutions based in the United States, to enable foreign firms with United States affiliates to make use of it as well." ($700 Billion Is Sought For Wall Street Vast Bailout" NYT 09.21.08)

Now who might they be referring to when signaling out "foreign firms with United States affiliates," and who would likely benefit most? Could it be an organization that has already enriched itself on the backs of the Freddie Mac-Fannie Mae bailout and the American taxpayer to the tune of $1.7 to $1.8 billion? While others were sinking, they saw fit to crow about their bonanza in the press (FT.com) and on CNBC (Please see: CNBC's Fawning Coverage Helping Bond Billionaires Fleece Main Street 09.15.08, referring in part to the Wall Street Journal's insightful editorial "Bailout for Billionaires" -- WSJ.com). Could it be the all powerful bond trader, PIMCO, with deep contacts throughout Washington and to the press?? Who just happen to be an affiliate of a foreign firm, Allianz, the German Insurance giant?

Wouldn't it be refreshing if someone in our Congress asked a few hard questions?

Comments

[RoveRoveRoveYourBoat]

Brovo...also google Robert Reich's 5-points of 9-21-08. The added requirement should be the humiliation of g.w. being required to roll back all tax cuts of the last 8-years.

[SCG]

" Corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed. "

- Abraham Lincoln, November 21, 1864

[jazz2]

Has naybody seen a list names of the individuals who threw this mess together? This whole thing looks like Cheney's secret energy meetings.

[habrow2]

Sure does. All of a sudden we are are on the brink of disaster. Perhaps we should invade wall street to find the weapons of financial disaster and the deck of cards that caused it. I sure would not give Bush and Paulson a no-bid hand to deal with it, whatever IT is.

[CriticalDune]

UBS/Credit Suisse/Deutsche Bank...It's a long list of possible foreign beneficiaries and I don't think PIMCO is at the top of it. Phil Gramm, McCain's top dog, is Vice Chair of UBS.

The Paulson Plan is DOA. Conservatives hate it. Progressives hate it. Main Street hates it. Bankers are the only ones who like it.

No deal will take place that does an end around review and remedy or doesn't give taxpayers equity or some other upside in the trade (as Dodd just proposed a few minutes ago).

[lejman]

spot on mr. learsy....no bailout comes without a benefit to the bush 1% in some way shape or form.
sickening and disgusting high stakes global monopoly money at the expense of the 99% manipulated masses.

[Catseyes]

This bailout is being rushed for Congress's approval is just like the rush to go to war. Can't wait...Can't wait....... Look what a debacle that was for all but the corrupt few. The best course of action is think it through. Wait until after the election, which is exactly why they don't want to wait because they may not have control of all that money if Obama gets elected.

[californiadreamer]

this all seems so choreographed to me. we had the housing bill last summer which was marked up by the banking lobby and was made ineffective for the homeowners looking to re-structure and then attempts here and there to shore up the financials. Now the government says the sky is falling and we must pass this immediately or else. the democrats show their opposition and speak of helping the homeowners at risk due to the drop in housing values but ultimately what will happen is that the lenders get to pawn off their bad debt and continue with business as usual. the democrats can say they tried, but they had to rescue the economic system and since each individual foreclosure doesn't mean much, well, so be it. the voter will vote for the lesser of two evils and the lobbyists will continue to provide money for their campaigns. the only hope is that this bailout won't work and the american people will be selling apples on the street and then decide enough is enough.

[Cogs]

Doom and gloom. We've got to hurry or it's 1929 again! Sounds like the fearmongers are at it again.

[vippy]

And yo cannot see where this is heading STILL?

[cigi]

I was watching the analysts this morning on CNBC and one of the "spinning heads" for Wall Street was "whining and sniveling" about the fact that Goldman and JP Morgan will now just be "regular" banks and that their employees would find that difficult to live with and quit. It seems no one on Wall Street wants to work for the "little people" that regular banks represent. Number one, what a mouthful of tripe! Goldman and Jp Morgan will save their butts by going under the regulation that regular banks have to follow...like having enough assets to cover your loans. Oh yeah, they won't be able to leverage every dollar they invest 30 - 40 times more than the investment may be worth.

The sadder point about the speaker's words this morning was the disdain and true "elitism" he showed by crying about the new rules while taking the tax payer's money to pay for a bunch of flaming incompetence in the Financial Industry overall. I am tired of all the "clever" MBAs and mental midgets on Wall Street who have been skinning all of us for the last 8 years! I weep not for Wall Street and I hope Executive Compensation is cut to shreds....just like the brokers, CEOs, who destroyed a lot of ordinary folks 401Ks, IRAs, Money Markets, etc. ACCOUNTABILITY belongs on Wall Street the same way it does on Main Street! Free Marketeers = the New Socialist Class of America!

[cylindar]

Yes, it would be refreshing.

[darthdarcy]

The banking community are a bunch of "deadbeats..!"

Rich Conservative Deadbeats..and Leeches..!

[gclue]

An obscure question: Does the purchase of these Mortgage backed securities by this bailout constitute a credit event? If so, what happens to the Credit Default Swaps written on those securities? If this does not constitute a credit event, then since the Fed is NOT a default risk, hence will never default, then does that mean who ever underwrote those Credit Default Swaps just got away with Billions in profit, courtesy of the Fed?

[January]

Your question makes sense to me. Anyone who has tried to collect on an insurance claim has met the settlement agent who just says, no, because he's sure there's some clause somewhere that holds him harmless. "Credit event" sounds like the kind of unanticipated consequence that any half-baked attorney could tie up in court from now until the cows come home.

As currency amounts to just paper, I suppose that derivatives, swaps, etc. despite being just paper have functioned as currency also. The question is to what extent they now have the same status as Confederate dollars. Absent a Confederacy, or in this case with a bankrupt insurance company, is the paper worth the ink printed on it? Or must Sherman march through Atlanta again until all the institutions have been leveled? Some are suggesting it will lead to violence.

[beaupritchard]

Why the rush ... let the deliberating body deliberate.

[SamEllison]

In this case deliberation means giving the lobbyists more time to pay for this legislation.
That's how it works.

[rubinoff]

Yup.