Big Bank Bailout Payback Bamboozle

34 Banks Fail to Pay TARP Dividends

October 8, 2009

Blogging Stocks - 34 banks opted not to pay their quarterly dividends to the Treasury Department in August -- that's up from the 19 deadbeats for the month of May.

The biggest offenders were American International Group (NYSE: AIG), CIT Group Inc. (NYSE: CIT), First Bancorp (NASDAQ: FBNC) , Sterling Financial Corporation (NASDAQ: STSA), and UCBH Holdings, Inc. (NASDAQ: UCBH).

The Treasury Department provided the USA Today with a pretty condescending explanation:

"For some banks, it may be prudent to exercise their right not to pay dividends in a particular month, and we respect their right to do so. To draw any broader conclusions about the state of the banking sector from one month is highly premature and speculative."

Right: Just because banks aren't paying back the money they have an obligation to pay back doesn't mean there's a problem. Yeah, OK -- And my name is Ken Lewis and I'm "phenomenally good."

Critics charge that the Treasury Department was overly rosy in the predictions it made when it started doling out money. The banks that got TARP money supposedly passed stress tests and were deemed "healthy". But if they're healthy, why can't they pay their bills?

Of course, admitting that there is a problem would mean that the Treasury Department would have to admit making a mistake.

So instead we get absurd statements that explain to us dullards why "just because someone can't pay us they money they said they would, that doesn't mean they have financial problems."

Grayson Calls on American Public to ‘Unmask the Fed’

October 15, 2009

Raw Story - Florida Democrat U.S. Rep. Alan Grayson wants Americans to help him block Congress from confirming the Chairman of the Federal Reserve to his second term unless he hands over documents relating to the bailouts of financial institutions, including the rescue of Bear Stearns.

In the "Unmask the Fed" campaign, Grayson calls on constituents to sign petitions demanding that Fed Chairman Ben Bernanke "come clean" before senators re-confirm his appointment to the helm of the Federal Reserve.

Grayson wants access to the Bear Stearns rescue paperwork as well as the details of which financial institutions received $1.2 trillion in bailout money, how much each institution received, and what was promised in return. He's also seeking Fed documents that discuss the Bank of America/Merrill Lynch merger, transcripts of Open Market Meeting minutes, and the terms and conditions of Fed transactions not reflected in balance sheets from the past three years.

"[T]he Senate should know who got the $2 trillion the Federal Reserve has lent out over the last two years," the petition reads. "Only then will the Senate be able to judge whether he should keep his job."

Grayson and Texas Republican Rep. Ron Paul sent Sen. Chris Dodd, who chairs the Senate Banking Committee, a letter last week asking him to postpone Bernanke's re-confirmation hearings until the public has access to more information about the Federal Reserve.

"Without such an understanding, it is impossible to know whether Chairman Bernanke is fit to serve another term and fulfill the Federal Reserve's dual mandate to ensure price stability and full employment," the letter to Dodd read.

It continued: "Today, big banks are being bailed out and have a substantially lower cost of capital through an implicit government backstop even as Americans themselves are seeing their pay cut."

There are separate bills that would authorize an audit of the Federal Reserve that are picking up speed in both the House and the Senate, with bi-partisan support in both chambers. Paul sponsors the House version of that legislation, and Vermont Sen. Bernie Sanders is behind the Senate measure.

"The Federal Reserve has got to understand that this money does not belong to the Federal Reserve. It belongs to the American people," Sanders told Raw Story in an email from his spokesman. "As long as the Federal Reserve is allowed to keep the information on their loans secret, we will never know the true financial condition of the banking system."