Fat cat squeezing under the fence - AIG, Bankers squeezing into our yard with Geithner's active help!

Easy does it! Slow and steady.

First, an itty-bitty subprime fiasco.

Then, a housing bust.

Next, a bailout of AIG on the quiet. Tell the public AFTER you’ve given them the money.

How about some spice? Sprinkle a bit on Fannie and Freddie.

Say it aint so, Lehman’s.

Now, pour $700 billion down the Bank drains.

Oh no! it’s time for AIG once more.

How about some theatrics during the intermission about the Auto industry?

Ah! Time again for AIG!

Not enough?

Let’s put together a TRILLION dollars. It will go to buy the same toxic assets that have been bought again and again, first directly from the banks themselves, then again from the banks via AIG, and now once again…

Like the fat cat squeezing under the fence, we have Corporate bigwigs squeezing into our yard - thanks to help from politicians (like Christopher Dodd) who rewrite the law in the dark of the night to provide loopholes, and a Treasury Secretary who is anxious to please the bigwigs by freely giving away our money!


Oh look, the head came through!




















Oh no, the fat cat is half way in!



















Whoops! He's all the way into our yard!





















Jeez! He's settled in!

Wrapped in TARP

Have you heard of the story of the Camel and the Arab?

It is an interesting story. A story with a moral that we would do well to learn about. A story with an uncanny parable to the behemoth, too-big-to-fail, too-large-to-be-kicked, thumbing-its-nose-at-you AIG's relationship with the American Taxpayer.

Once upon a time, an Arab was riding his camel across the desert. It was a dark, cold winter. Night was upon him and he decided to take a break. So he set up camp in the desert sand and pegged down his tent. He laid his fine wool carpet on the sand floor of this tent. Then he went outside and lit a fire, cooked his meal over the crackling, smouldering wood, smoked his hookah, downed some wine and finally decided to turn in, into his warm tent. No sooner than he fell asleep, he heard a snort and a head poked into the flap of his tent.

It was his camel. The camel beseeched him to let him keep its head in the tent as the wind was howling loudly and it was very cold outside the tent. So the kind-hearted Arab let the camel keep his head in the tent. In a few minutes the camel edged in further into the tent - upto its shoulders. The Arab protested, but the camel gave him a woebegone look and begged to be allowed to keep his shoulders inside the tent as it was freezing outside. So the Arab took pity on the camel and allowed him to stay half way inside his tent. As the night progressed, the camel pushed in more and more into the tent. Slowly, insidiously, the Arab was shoved outside the tent, until suddenly, he found himself outside the tent, bracing the cold, winter storm, while the camel slept cosily inside the tent.

What does this story remind you of?

AIG and the American Taxpayer!

At first, it was a $5o billion bailout that the public was not even informed about until after it was paid. Before we knew it, the Government had bailed out AIG. They didnt have to come with their begging bowls to Congress like the Automakers had to. They just told Paulson to slip 'em one and they were paid. We were presented with a fait accompli.

Then it was another $80 billion. And so on until AIG now has the largest infusion of Government money in history. As more and more money gets poured down AIG's drain, the company gets more and more arrogant. No one can question them any longer. There are no rules they play by. There is no integrity, honesty or shame. They know, as did the Arab's camel, that once they have their grimy hands on so much of taxpayer money, there is no option but to continue to bail them out, regardless of how they behave. Hark the latest of AIG's ignominious behavior: paying $164 million in retention (what the??) bonuses to the very executives who have run the company aground!

Like the Arab's camel, we shouldn't have let them into our tent in the first place. Now they are wrapped in our TARP and we have been shoved out of our tent!

Obama's Housing plan and the Responsible Renter

There is a cry of injustice in the air.

This is from people who have been responsible renters. They question the fact that they are being asked to bailout irresponsible homeowners who have bought larger homes than they can afford and are now going into foreclosure. They point out the unfairness of Obama's housing rescue plan to people who have been renters . They aver that it is better for home prices to fall due to foreclosures, so that finally, they too, can afford to buy homes that they can now afford.

A completely fair question. A very fair concern. And a very fair free-market expectation.

Let me see if I can help address this concern. Before I start to make my point, I want to clarify: I do not personally stand to gain from Obama's Housing rescue plan. Not a cent. While I am not an Economics expert, I do try to see both sides of the coin and am trying to look at the economy as a whole.

This downturn has affected all of us and is a danger to this country's long term stability. From that standpoint, it is important to go to the source of what started off this cascading disaster. The subprime loan fiasco and the foreclosure of homes has been identified by experts as the root cause of this economic meltdown. So, it makes sense that we fix the cause and not the symptoms of the illness.

Job losses, failing banks and auto companies, unemployment lines, disrupted children and families, increase in number of people without health care... all these are symptoms of the disease that has taken hold of our economy. The root cause is the housing market collapse.

As long as most people were diligently paying their mortgages, the banks continued on their merry route to making more and more money. Everything was fine. The sun shone.

As the subprime market started to melt, we felt the first tremors of the housing market. Like any untreated illness, the disease soon spread to other areas and now we have otherwise healthy mortgages failing, sometimes due to a job loss, sometimes due to forces beyond a homeowner's control and sometimes due to the sheer irresponsibility of being overextended on debt. As more and more homes started to foreclose, it brought home prices down all across the country. Responsible homeowners were now upside down on mortgages that they have been paying diligently. They owed more than their house was worth. And so began more defaults leading to the avalanche of sliding home prices.

In order to staunch that bleeding, the Obama administration has correctly addressed the root cause: stem the foreclosures.

But what does that do for renters?

Now, there are two types of renters: ones that will probably always rent their whole lives for a variety of reasons - maybe they are nomadic, or they love the freedom of not being tied down to a home or they choose to rent for a variety of economic reasons. The housing meltdown does not affect them significantly, other than the fact that their rents probably came down a bit - they now have more bargaining power because there are many more homes for rent in the market.

The second kind of renter is the one who, with the falling prices, can now finally afford to buy a home. These are the people who have protested Obama's Housing rescue plan vociferously. They feel they can now finally afford a home because home prices are where they should be.

Nobody is arguing the validity of their point.

But here is my opinion: if a renter can now finally afford to purchase a home, there is no dearth of foreclosed homes to purchase. Allowing foreclosures to continue unchecked will cause great danger by letting the markets go into a free-fall until the entire economy collapses. And a collapsing economy will certainly hurt everyone. Even though a renter can finally afford to purchase, he/she may not be able to get a loan as banks which have been singed by defaulting homeowners will now be extra careful about giving loans to new homeowners. In addition, even if banks are willing to lend, they do not have the money to do so.

This situation reminds me of the "dog and pebble" story that Indians love to tell - When one finds a stray dog and wants to aim a pebble to chase it off, one cannot find the right sized pebble. And if there is a right sized pebble, a stray dog is nowhere in sight.

Likewise, this feeling of being able to take advantage of the foreclosure market. Homes are now available and affordable, but loans are harder to get. And with more homes being foreclosed, the cascading effect on the economy as a whole, is terrible to contemplate.

So, Renters! The govt. is not just using our hard-earned tax dollars to benefit irresponsible homeowners. The dollars are actually being used to prop up our economy by fixing the root cause of the disease, so that we all may have jobs, stable homes and health care.

Foreclosures are a lose-lose for EVERYONE - homeowners, lenders, banks, renters and new purchasers. If we take a step back and look it from a bird's eye view, we will see that Obama's plan, while not perfect, will eventually help prop up the economy, IF carried out without interference from vested interests.

But that's a big IF.

Cliff hanger

Found this cartoon on the Miami Herald site and couldn't resist sharing. :)

We still have the GOP telling us what we are doing wrong. And some of us are still listening!

Party at Capitol Hill Dunk Tank!

There is something to be said for the party at the Capitol Hill Dunk Tank that periodically invites the creme-de-la-creme from the Wall Street and Financial fraternity for cake, since they don't eat bread. Even as we are crying foul at the massive re-distribution of wealth that is taking place under our noses, our house reps, in an effort to wipe our tears and divert us, have hauled up various economic criminals (bank and auto heads), real criminals (peanut tycoon), camouflaged criminals (Treasury and SEC officials who plead incompetence rather than malicious intent), and financial criminals (Madoff et al), to a Capitol Hill Dunk Fest.

Our brave leaders have put their heads in the lion's jaws for our sakes. They recognize that we are yelling for blood. And that we want justice. Because we know, in our heart of hearts, that the money the CEOs have earned is not for an honest day's work. It is "earned" with a loaded dice - by knowing the "right" people, "lobbying" for their interests, and fighting against legislature that benefits the country.

So they drag these suited, booted, arrogant, smirking, know-it-all, talking heads to Capitol Hill.

"Did you know that you were indulging in risky behavior when you encouraged your loan officers to push high interest mortgages to people who couldn't repay them?
Dunk!

"How much money did you lend out last year after you took TARP money and how much did you lend out the year before when didn't have access to TARP money? Why are both amounts the same?"
Dunk!

"How many millions did you pay as bonus to your employees with one hand, when your company was in the red and grasping taxpayer money with the other hand?"
Dunk!

"Weren't your companies the ones that fought hard against legislation for building energy-efficient cars? Now why are you coming to us for help when gas prices make your cars unaffordable to run?"
Dunk!

"How did you come to Capitol Hill today? Did you use the Corporate jet?"
Slam Dunk!

Oh, I know, I know, one cannot shame the shameless. To all intents and purposes, a tongue-lashing is not the same as a lashing.

Our only hope of reprieve from yet another bubble is to enact strict and loophole-free laws before we hand out our money to the grubby hands of the banks. But since our interests are not protected here too, we must rely on Wall Street's sense of shame and well concealed patriotism in order to help dig our nation out of the mess of their making.

Even if the dunkfest does not accomplish its goal - to shame the CEO's into good behavior, it at least indicates that at least our lawmakers feel our pain, while they are handing out the futures of our children and grandchildren to dishonest and avaricious people. We should be able to take comfort in that.

Sex and the TARP!

Here is a riddle: What is more scandalous than "Sex and the City", costs $2000 / hour, gives intense pleasure to someone other than you, but is paid for with your hard-earned money under TARP?

Guess? Didn't get it?

Ok, here is another hint: What is a legitimate business expense for big Wall Street CEOs in order for them to perform their high-stress, high-paying jobs, delivering "great" rates of returns for their investors?

Give up? Beyond your imagination?

I don't blame you. It is hard to wrap your minds around this creepy excess.

According to an NYC Madam, Wall Street execs and CEOs have been utilizing high-end prostitutes at $2000/hr and paying for them with their corporate credit cards. They have been deducting these expenses illegally as legitimate business expenses. Looks like the TARP money will come in handy to rescue their firms since their routine expenses to "conduct" their business is higher than the profit generated from the business. It is no wonder that the companies that they manage are now running at a loss and need tax payer money to help offset losses. To add insult to injury, even after this illegal, deceitful, fraudulent and distasteful behavior they have the gall to resist Govt. oversight for the TARP money and fight the restrictions placed on their compensations. And they try to get the Republicans to spout crude "wisdom" about Govt interference in their business.

By rights, we, the public, should ask the Govt to prosecute all these executives and recover this money from them. We should also be defining the oversight of company expenses for companies that accept TARP money since we have paid for all this:

- a major New York real estate developer who, according to the list, "will come to the door wearing women's panties," and who spent nearly $100,000

- a partner at the Wall Street law firm Cravath Swaine Moore "looking for a party girl to come fully equipped" and spent a total of $20,000

- an investment banker from Lehman Brothers who saw "Kelsey and Keely together" and later saw "Aria and Skyler at the same time"

- an investment banker at JP Morgan Securities who "loves Brooke" and spent $41,600

- an investment banker at Goldman Sachs who "only wanted all-American girls" and spent $27,000

- a managing director from Merrill Lynch who saw "Lana" using the name "Nataly"

- a managing director from Deutsche Bank "who called about seeing Nataly again"

Join in to leave a message if you don't want to pay for all this.

Profiting from Tragedy - the Caylee Anthony doll

The commercialization of civilization.

It is a shameful time. A time to reflect about how low things have sunk. And how crass and how utterly mercenary some people have become. How they think that material gain excuses any insensitivity to the pain of others.

I was shocked that a business from Jacksonville even thought they could profit from poor Caylee Anthony's death, when I read this post on CNN: Outrage halts launch of Caylee Sunshine doll. The post went to explain that the public was outraged that Jaime Salcedo, president of Showbiz Promotions created a doll called Caylee Sunshine. I am glad that people stood up for what is right and denounced this act of profiting from tragedy. It tells me that there is some hope left for us. That there are still good people around.

When asked about his profit motives, Mr.Salcedo demurred, saying that he was only doing a public service. He was donating money to charity. But, was he? The dolls were priced at $29.99 and he was planning on donating $3 to charity. He had not even identified a charity for donation yet.

Regardless of whatever excuse Mr.Salcedo has come up now in the face of public uproar, the very thought that he even took this idea to fruition is sickening and insensitive.

This is what commercialization of our civilization has done to us. Look around you: Bernie Madoff, John Thain, Joseph Bruno, Ted Stevens, Jack Abramoff, Citibank Jet purchase with public money, AIG spa treatment with public money, and now hundreds more scams being revealed.

We've gotten so deep into consumerism and materialism that people don't matter anymore. Nothing matters except money. That's what got us in this economic mess. The greed. The corruption. The insensitivity. The lobbying. The racketeering.

Maybe this is our time to stop and ponder about our missed path.

It's not welfare as long as it is corporate welfare! :)

...So commented a fellow about Huffington Post's article titled, "Citi Jet Purchase: $50 million, 12-seat plane despite $45 Billion Bailout".

I completely agree. There's a different standard out there when it comes to Corporations and Corporate bigwigs. It doesn't matter if they've been and continue to be irresponsible. Doesn't matter that they've made bad decisions. Doesn't matter that they feel entitled. Doesn't matter that they lived life large and enjoyed all the money in the good times and didn't save up for bad times. Doesn't matter that they ran their companies by over extending their debt...

In America, Corporations can do no wrong and are never punished.

It is the people who carry the brunt.

- Bought a home that was within your means but got taken in by an unscrupulous mortgage lender who saddled you with a fancy mortgage instrument that "balloons"?
Hey! you should have done your homework!

- Been absolutely responsible with your money, but now have lost most, if not all, of your hard-earned 401(k)?
Tough luck, mate! No one could have predicted this!

- Been very careful with your home purchase but the value of your home has fallen so much that you've lost all your savings?
Sorry, old champ! That's life!

- Got laid off because your CEO spent the company money on refurbishing his office and now cannot pay you for the honest day's work you are doing? Lost your health insurance since you don't have a job and now cannot pay for your terminally ill wife's treatment?
- Buddy, this is a capitalist society. Don't expect welfare!

But, if you are a bigwig in a Corporation, just go wailing to Washington with a begging bowl.

"Baawwwwlllllllllll! The economy tanked. No one could have predicted this. We cannot run our business. We didn't foresee this. HELP US! Bail us out so that we can continue to squander the common man's hard earned money. "

And the poor sucker taxpayer will come to your rescue.

Your requesIt is being processed.

Walll Street Fiddles as America Burns!

We Americans have our very own reincarnation of Nero - The fools at Wall Street.

Nero, the fifth and final emperor of the Julio-Claudian dynasty was known for his tyranny and extravagance. But, his greatest claim to fame was that he fiddled while Rome burnt!

Our Neros think John Thain's (Merill Lynch's CEO) profligacy is warranted and a "just a drop in the bucket" compared to the money that Merrill Lynch makes each quarter.

I wish the Wall Street types who said this would do their homework first. Merrill was posting losses every quarter. There was no money being made. Merrill was laying off employees in order to save money. And John Thain was preaching to his leftover employees to CUT spending while he refurbished his office!

Is this the reason why we are all in this mess? Because the CEOs who are hired by corporations dont think they need to do their homework before spouting nonsense? Because they refuse to face reality? Because they are so puffed up with their own importance that they think they are worthy of an office costing $1.22 million?

Because they continue to fiddle while America burns?

All's fair in love and war and BUSINESS!!

I read an article on Huffington post that caused me to step back and say, "What? Seriously? ONLY in America! " And then I read the same article on CNN and knew for sure it WAS a joke. Only, the joke was on US, the American people!

It was an article titled, "Porn Kings want bailout". Aside from the ridiculousness of the assertion that bailing out the auto industry and the financial sector somehow makes it alright for other "industries" to seek similar tax payer help, the saddest joke about this article is that no one questioned the enormous travesty of referring to the porn output as "industry".

For long I have felt that we are willing to make enormous concessions to businesses as long as they fulfill that one reason for their existence - making money. Money and the making of money seems to condone every mistake, every wrongdoing and every wrong purpose. It is indeed a sad day for us when we can accept the exploitation of women and teens in the name of money making and justify these businesses as "industries".

Adding insult to injury is asking for taxpayer bailout to sustain the "industry" in the name of sexual health for America.

As long as the focus of business is only money, we are going to get slammed in many ways by unscrupulous business men. Businesses and corporations need to have a social conscience - there is no way around that.

Uncle Scrooge, where are you?

Donald Duck's famous tight-fisted Uncle Scrooge is very much in demand in America. Where IS he? He'd quack to death of a heart attack if he saw the Billions and Billions of dollars spent mindlessly, with no thought to exactly what the goal is - some vague goal about keeping the economy going. Even the economists are unable to say if these billions will help jump start the economy.

But I use the word "spent" very loosely. For how can you spend when you don't have the money? The Govt. is busy mortgaging our futures, our children's futures, our grandchildren's futures, our great-grandchildren's futures.... and how!

Here is a site that puts the amount of money being "spent" in context with all other major purchases / expenditures the US has had in the past - adjusted for inflation!

Right now, we have nothing to show for that money - it appears to have gone down a drain. Looks like we need Uncle Scrooge to help us clean up this new mess - one of the Govt.'s making!

If only we would stop to THINK before rushing in to FIX!

"Folks! A lot of people miss those old drive-in theaters. But I say, any theater can be a drive-in, if you ram it with your HUMMER!" So, quipped Stephen Colbert in his Colbert report.

Seems to me that this is how we Americans solve our problems. Just ram in, preferably with a Hummer and you will be fine! This is exactly how I see our latest economic crisis being handled. First, Paulson convinced the Congress and the Senate to dish out $700 B of taxpayer money with no questions asked, so that he could ram it through the financial system, regardless of whether the banks wanted it or not (according to some reports) and hoped that it would solve the problem.

It didn't.

All it did, was create a situation like the one I have seen in India before. When one goes to a temple in India, there is usually a loooooong line of beggars seated at the entrance with their palms stretched out. And you better decide upfront if you want to give alms that particular day. Because, be prepared, when you start doling it out to one person, the other beggars appear out of the woodwork and you cannot escape. So, you keep delving into your purse to find more cash until you run out of the green stuff and then and only then, will the beggars disappear.

So Paulson created a situation like that, only on a MUCH larger scale. We now need to ram more money into the system. Just what exactly the system is, no one knows. All we know is that it is NOT middle class American people.

So we do what we are best at doing: American problem solving - there is a problem, pour in cash, it will go away. We don't blink, we don't think, ala Sarah Palin. We just dive in and pour the cash. That's what we are now trying to do with the Big three Detroit Auto makers. There are already reports of many more companies asking for a handout.

...While Middle class America is left seated at the temple door.

Can we stop for a moment and THINK? Can we try to identify the problem before rushing to fix it? I know, I know, the auto makers say that they wont last this month without money. But it cannot have happened in a jiffy exactly like Paulson said the financial storm happened in a jiffy.

What, exactly, are we trying to solve here? What is our major problem?
1. Is it the American auto manufacturing that we want to save?
2. Is it American jobs we are trying to save?
3. Is it both?
4. Are there not other options for creating jobs and other futuristic options for personal transportation?

For instance, I just read in Fortune magazine that Abu Dhabi is creating a completely self sufficient city in the middle of the desert. Read, "A Green city blooms in the desert" by Julia Joffe in the December 2008 Fortune magazine. The city is called "Masdar" and it will be home to 1,500 businesses, 50,000 residents, and 40,000 commuters, will use 75% less electricity and 60% less water. Personal transportation pods will be powered by lithium batteries and will replace cars.

The cost of building this city: $22B, about 2/3rds of what the Auto makers have requested Congress to pay for their initial bailout. It is estimated that they will come back for more before 2009 is out. Experts suggest it will cost the taxpayer between $75B and $125B. And we are not even sure if cars are the transportation mechanism of the future!

Wouldn't a project like the one planned by Abu Dhabi create jobs immediately? Wouldn't it create renewable energy, help America lead the world in urban planning and pour money where we need to be in the future? Wouldn't it also solve our future transportation needs? Are cars the ONLY way to travel? And are the auto manufacturers predictions of car sales for the future going to hold out? Are we pouring money before stopping to take a breath?

Don't get me wrong: I have tremendous admiration for the good men and women who represent the American public in the Congress and the Senate. I think they are doing a fantastic job, to the best of their ability. They have been tough on the Auto makers and have learned from their experience of handing Paulson money with no strings attached.

Only, if only we would stop to THINK before rushing in FIX!

Is Might really Right?

Right after Prop 8 was passed in CA, I was watching a CNN program where Larry King had assembled a group, as usual, to discuss the reaction of the people of CA. One of the guests was a prominent writer who was also gay. He was protesting the passing of Prop 8 when Larry made a remark, "But, you know, the majority of Californians have spoken - the people have spoken, they do not want Gay marriage. What do have to say to that?" To which the journalist said something that struck at the core of my beliefs. He said, "Just because a majority has spoken, it doesn't make it right. Think about it, there was a time when the majority thought that Slavery was OK. That didn't make it right."

Mulling about what he had said, my thoughts went to the Great Bailout Bowl that everyone wants to dip into. The latest of the dippers are the Big Three auto companies. And their reasoning was that they either directly or indirectly employed a few million people, so they needed Govt. assistance to continue doing whatever they were doing to keep their companies afloat. When questioned in Congress about their plans for the monetary assistance they were asking, the Big three CEO's didn't have a clear answer. All they could say was that since they were so big, they HAD to be helped, IF NOT!

So, does Might make it Right? Does sheer numbers justify any regulation, any request, any law? What about the minority? Do their needs not matter? Just because there are fewer Gays and Lesbians, do they not have any rights? Just because the auto workers and their sidekicks are employed in droves by the auto industry, does it mean that people who earn far less and ironically, some of those who don't even have health care, have to support the industry so that they can continue to have fancy health care and great pay packages for everyone who is and has been employed there?

What about AIG? That veritable drain? They came back again and again with their begging bowls, looking for public handout. Same argument - too big to fail.

Just what is too big to fail? Were we to frame this differently - Can we call this "Too big to survive?" Too lumbering, too large, too elephantine, too cumbersome, to be nimble?

Here's what I think is fair: Yes, we cannot let a large industry that is the backbone of American manufacturing fail. BUT, we can and probably should, break it up into multiple smaller companies so that if one of them fail due to uninspired leadership (Let us not kid ourselves, because that is what this is - Uninspired leadership) the rest will survive.

Leadership is not about steering the ship in calm waters, it is about bringing it home in a storm.

Now we have a storm and the so-called leaders are asking for help while blaming the Gods, the devil, their father, their mother, and the economy, for their predicament.

I read a post where someone had written that it was time to combine the Big Three into the Big One. I disagree. They should now become the Small Many. And so should AIG. Time to break things up so that no ONE company can hold a gun to our heads.