Sunday, November 02, 2008


PAULSON SAYS "LET THEM EAT CAKE.
"

"The swindle of American taxpayers is proceeding more or less in broad daylight, as the unwitting voters are preoccupied with the national election. Treasury Secretary Hank Paulson agreed to invest $125 billion in the nine largest banks, including $10 billion for Goldman Sachs, his old firm. But, if you look more closely at Paulson's transaction, the taxpayers were taken for a ride--a very expensive ride. They paid $125 billion for bank stock that a private investor could purchase for $62.5 billion. That means half of the public's money was a straight-out gift to Wall Street, for which taxpayers got nothing in return."

***

"How else to make sense of the bizarre decisions that have governed the allocation of the bail-out money? When the Bush administration announced it would be injecting $250bn into US banks in exchange for equity, the plan was widely referred to as 'partial nationalisation' - a radical measure required to get banks lending again. Henry Paulson, the treasury secretary, had seen the light, we were told, and was following the lead of Gordon Brown.

In fact, there has been no nationalisation, partial or otherwise. American taxpayers have gained no meaningful control over the banks, which is why the banks are free to spend the new money as they wish. At Morgan Stanley, it looks as if much of the windfall will cover this year's bonuses. Citigroup has been hinting it will use its $25bn buying other banks, while John Thain, the chief executive of Merrill Lynch, told analysts: 'At least for the next quarter, it's just going to be a cushion.'"

***

"Goldman Sachs is on course to pay its top City bankers multimillion-pound bonuses - despite asking the U.S. government for an emergency bail-out.

The struggling Wall Street bank has set aside £7billion for salaries and 2008 year-end bonuses, it emerged yesterday.

Each of the firm's 443 partners is on course to pocket an average Christmas bonus of more than £3million.

The size of the pay pool comfortably dwarfs the £6.1billion lifeline which the U.S. government is throwing to Goldman as part of its £430billion bail-out.

As Washington pours money into the bank, the cash will immediately be channelled to Goldman's already well-heeled employees."

***

In the old days, crowds would be heading for Wall Street with pitchforks, tar and feathers!


3 comments:

Jim McCulloch said...

I also read that about half the money is going to be used to pay dividends--as if these businesses had made a profit. Although on second thought, I suppose they did, courtesy of the taxpayers.

Bob Brady said...

I'm just amazed that there are no crowds or mobs gathering about this ultragrand theft from the public and their descendants... The thieves are pulling off their con so well, the victims are convinced they're being helped! Though I suppose a few small fish will have to fry eventually, as a sop to justice...

Chancy said...

Yes Robert It is indeed a big swindle and Paulson beat the drum of "the sky is falling" so that Congress would not have time to think about the consequences of this massive bailout.

I am glad the last 8 years is over and I hope with a President Obama and a new Congress we get more sensible governance.