Something Is Wrong With Tarp.
Spoke to a small town banker on the Downeast Coast of Maine to learn a strange fact about how Treasury is handling the $700 billion TARP. His bank has a clean balance sheet,
several branches, private stock issue, with a local, sophisticated board spanning families and generations, and it does a deal of business in commercial, real estate and autos. When TARP was announced in late September, the Maine bank board's opinion was that it was not for us, we don't need a hand-out, we don't want government interference, we don't like the whole idea of taking tax-payer money. But then they listened to advisers who said that the government was urging everyone to apply, that there was no stigma, that the government would have a light hand, especially since they owned a healthy bank. The application was accepted quickly and soon $26 million showed up in a ribbon. The bank had been unable to make as many loans as it wanted before TARP, because businesses had grown so cautious, reluctant, fearful that expansion will leave them short if the recession depens and lengthens. Now with the $26 million on hand, they can't do more than bank it. My banker source shrugs. "Maybe they're lying to us and the economy is much worse than even the TV says. We can't be sure, so we'll keep it. It's very cheap money. We sold them preferred stock at
5%. We'll buy it back after three years. Cheap money. The only thing is, we aren't allowed to pay our CEO more than $500,000 per year. Not a problem, not close." I am amazed. Why is Hank Paulson pushing tens of millions to healthy small town banks? This is Downeast Maine. Downeasterners are cagey, dour, penny-pinching, conservative, friendly and suspicious. The bankers think there is something wrong with TARP. I agree and asked my professionals. Aaron Task, Yahoo Finance, writes that TARP is the greatest redistribution of wealth upwards in history. The Feds are shoveling cash into the hands of the already rich. The people who get to stroll on the Titanic Boat Deck (above, portside and starboardside) are getting all the money for themselves. There is little evidence that it is showing up in tax-payer's hands or borrower's hands. As in Maine, no one much wants to borrow because we are all so frightened of worse ahead. Aaron says that a source tells even in California, where they are desperate for the TARP money is not getting through the hands of the bankers. They are banking it.
TARP UnBankers.
The Wall Street Journal is running a "Chump for a Day" feature with a blog for seven workers in finance who have lost their jobs over the last year and are now searching for work. I read carefully through the stories, and when I came across Lehman, Bank of America, M&A, Bear
Sterns, Citi, I blinked and waited. Bank Draculas. Bear Stern set us up for panic, Lehman panicked us, and Citi is drinking our blood. These are the pros who lost the money we are now all looking for and then shipped out on the Titanic (right and below, April 10, 1912, leaving Southhampton for the Twlight Zone). Now they are unemployed along with tens of thousands of others. Sure, it is collective blame to say that these seven are the problem, but someone is the problem. The people on the coast of Maine didn't wreck their banks with derivatives and bonuses and delusions of making money by hawking to folk with no downpayment, no collateral, no wait financing for a $720k bungalow in Merced County California or in Naples Florida. And now these seven big city bankers are out of work. Just out of work? Several trillion dollars are missing. The planet is darkening. What's left of our tax receipts along with whatever Ben Bernanke can print is being handed out to the First Class passengers. Assemble calmly on the Boat Deck. Dress warmly. The ocean is black, cold, vast and bottomless. Is that Hank Paulson already in Boat 13?
Biographies
Geoff Hibner lost his position at Banta Corporation in 2007 after 4 years as the CFO. In the last year, Mr. Hibner, 59, has been participating in CFO searches with executive recruiters. Mr. Hibner received an M.B.A. from Harvard Business School in 1977. He lives with his wife in Neenah, Wisc.
Matthew Vuturo, 27, worked as a strategic planning manager at VR Mergers & Acquisitions, a Tampa-based firm. He was downsized in early 2008. Mr. Vuturo earned an M.B.A. from the University of South Florida in 2005. Mr. Vuturo lives in Tampa and recently took an overnight job at FedEx while he continues his search.
Dawn Jordan's position as an operations vice president at Bank of America was eliminated in late October. Ms. Jordan, 39, previously worked at Countrywide Financial as vice president of customer retention. Ms. Jordan received an M.B.A. from the Marshall School of Business at the University of Southern California in 2008. She lives in Laguna Beach, California.
Brian Murphy spent a year as an associate in Bear Stearns' investment banking division until the firm collapsed. Mr. Murphy,35, is searching for restructuring or turnaround management jobs and divides his time between California and New York. He has an M.B.A. from USC's Marshall School and spent nearly 10 years in the Marine Corps, serving two deployments in Iraq, and one in Afghanistan.
Karen Reid spent the last six years at Citigroup Inc. Her position as the vice president of global corporate banking was eliminated in June. Ms. Reid, 38, is now looking for a corporate finance position. She earned an M.B.A. from the University of California-Los Angelees Anderson School of Business in 2002. She lives in Atlanta.
Kevin Hudson spent almost four years at ServiceMaster as an IT finance director. When the company relocated to Memphis earlier in 2008, Mr. Hudson, 52, decided not to move. He received an M.B.A. from the Northwestern University's Kellogg School of Management in 1984. Mr. Hudson lives in Oak Lawn, a suburb of Chicago.
Spencer Cutter was a senior vice president at Lehman Brothers, working in the leveraged finance group. After nine years with the firm, Mr. Cutter was laid-off in the spring of 2008. Mr. Cutter, 40, earned an M.B.A. from UCLA's Anderson School in 1998. He lives in New York.
Michael Crehan, 54, spent the last eight years as a senior vice president at Lehman Brothers in the ratings advisory group - until March 2008. Mr. Crehan also spent 14 years at Standard & Poor's. He earned an M.B.A. from Babson College in 1982 and lives in Fairfield, Conn.
Not surprising that the bloodletting continues. Even with blood infusions, the wound is still open and gushing with leeches securely attached. Not even the illness has been properly named. The doctors responsible for the for the condition are still in charge. Their options are limited to the medicines and procedures that have brought us to this point.
The human body has the uncanny ability to heal itself. That is why the first rule in medicine has always been, "Do no harm." My own prescription continues to be: Close the hospitals; ban the medicines; (sue the surgeons, if you wish). Keep the patient comfortable ...and pray!
First mistake is quoting anyone from Yahoo Finance.
Several family members work in Finance, Brother's director (CFO) is indicted. Several of his co-workers cannot leave the country they work in (very liberal investment/banking/insurnace laws in Bermuda and Ireland).
Cousin Worked at Lehman, said over Turkey and Pie that risk officers were ignored or told to be quiet.
Friend at the gym says large hedge fund uses spreadsheets and noting else (!) to track their investments, this is a single point of failure if files are lost/deleted.
Where is the Professionalism? Where are the ethics? Where is the fiduciary responsibility to investors?
How is this different from the story of any of the thousands of small businesses that fail every year, during good times and bad? This is classic "liberal" thinking, in my view, feeling sorry for those who fail. First, if I were one of the people who lost their jobs, I would not permit my name to be used on a blog such as this. It used to be that losing your job was something you were ashamed of, not something you paraded out in public to garner sympathy for (or permitted to be done on your behalf).
Re "Aaron Task, Yahoo Finance, writes that TARP is the greatest redistribution of wealth upwards in history. The Feds are shoveling cash into the hands of the already rich."
The disastrous events of the last half century--open borders, the loss of our industrial base, the steady erosion of liberty at home even as we promote "democracy" abroad--make it clear that our current ruling elite has outlived its usefulness and must soon disappear. What will replace it?
The "Titanic" analogy may not be entirely correct. What happened to the Titanic was an accident - a Black Swan, if you wish. What we are witnessing re our financial markets was planned. Nobody can tell me that those responsible for what has occurred (and continues to occur) had no idea of what they were doing. This thing stinks to high heaven. For one thing, the timing is highly suspicious. For another, a lot of people got (and are getting) rich from it; the same ones who are now trying to burn down the house (presumably to hide evidence of a corpse). Call me a conspiracy nut. But if I'm wrong, you would have to find some way to explain how total illiterates could have come to be at the wheel(s) of our financial institutions. Even I, who never took an economics course in my life, know that you can't keep giving out loans out to people who cannot repay them and still survive as a legitimate business. Just because the theft was (and is) so great that most mortals aren’t able wrap their brains around its sheer magnitude, doesn’t mean it was an accident. …and still no calls for hearings. That in itself should tell us something.
The end game in all this appears to be the total government take-over of everything. A more appropriate analogy to what’s been happening can perhaps be found in Stanley Kubrick’s “2001: A Space Odyssey” where HAL 9000 (the on-board computer) takes over the ship by lies and manipulation. It portrays the triumph of tools - which, by definition, can never exceed the parameters proscribed by their function - over the human spirit which can be more than the sum of its parts (unless it is forced to regress to sheer existence by the tools of oppression.)