I Can Haz Bailout?


From the people that brought you GE Capital’s participation in the Temporary Liquidity Guarantee Program – FDIC is now insuring ‘Stored Value Cards’.

Exsqueeze me?

Yes, that would be Stored-Value-Cards (and other non-traditional access mechanisms). According to the definition provided by the NY Fed these are:

… one of the most dynamic and fastest growing products in the financial industry. Anyone who makes purchases with a merchant gift card, places phone calls with a prepaid telephone card, or buys goods or services with a prepaid debit card is using a stored value card.

In other words, gift voucher cards, pre-paid telephone cards and any other prepaid debit cards.

More after the jump.

So what’s next – a bailout for The Donald?  For Larry Silverstein?

On CNN this morning, Joe Nocera brought up a bit of reporting he did a couple weeks ago on the $700-800 billion we’re in the process of shelling out to our banks:

It was Oct. 17, just four days after JPMorgan Chase’s chief executive, Jamie Dimon, agreed to take a $25 billion capital injection courtesy of the United States government, when a JPMorgan employee asked that question. It came toward the end of an employee-only conference call that had been largely devoted to meshing certain divisions of JPMorgan with its new acquisition, Washington Mutual.

Which, of course, it also got thanks to the federal government. Christmas came early at JPMorgan Chase.

The JPMorgan executive who was moderating the employee conference call didn’t hesitate to answer a question that was pretty politically sensitive given the events of the previous few weeks.

Given the way, that is, that Treasury Secretary Henry M. Paulson Jr. had decided to use the first installment of the $700 billion bailout money to recapitalize banks instead of buying up their toxic securities, which he had then sold to Congress and the American people as the best and fastest way to get the banks to start making loans again, and help prevent this recession from getting much, much worse.

In point of fact, the dirty little secret of the banking industry is that it has no intention of using the money to make new loans. But this executive was the first insider who’s been indiscreet enough to say it within earshot of a journalist.

(He didn’t mean to, of course, but I obtained the call-in number and listened to a recording.)

“Twenty-five billion dollars is obviously going to help the folks who are struggling more than Chase,” he began. “What we do think it will help us do is perhaps be a little bit more active on the acquisition side or opportunistic side for some banks who are still struggling. And I would not assume that we are done on the acquisition side just because of the Washington Mutual and Bear Stearns mergers. I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way and obviously depending on whether recession turns into depression or what happens in the future, you know, we have that as a backstop.”

Read that answer as many times as you want — you are not going to find a single word in there about making loans to help the American economy. On the contrary: at another point in the conference call, the same executive (who I’m not naming because he didn’t know I would be listening in) explained that “loan dollars are down significantly.” He added, “We would think that loan volume will continue to go down as we continue to tighten credit to fully reflect the high cost of pricing on the loan side.” In other words JPMorgan has no intention of turning on the lending spigot.

It is starting to appear as if one of Treasury’s key rationales for the recapitalization program — namely, that it will cause banks to start lending again — is a fig leaf, Treasury’s version of the weapons of mass destruction.

In fact, Treasury wants banks to acquire each other and is using its power to inject capital to force a new and wrenching round of bank consolidation. As Mark Landler reported in The New York Times earlier this week, “the government wants not only to stabilize the industry, but also to reshape it.” Now they tell us.

Indeed, Mr. Landler’s story noted that Treasury would even funnel some of the bailout money to help banks buy other banks. And, in an almost unnoticed move, it recently put in place a new tax break, worth billions to the banking industry, that has only one purpose: to encourage bank mergers. As a tax expert, Robert Willens, put it: “It couldn’t be clearer if they had taken out an ad.”

Friday delivered the first piece of evidence that this is, indeed, the plan. PNC announced that it was purchasing National City, an acquisition that will be greatly aided by the new tax break, which will allow it to immediately deduct any losses on National City’s books.

As part of the deal, it is also tapping the bailout fund for $7.7 billion, giving the government preferred stock in return. At least some of that $7.7 billion would have gone to NatCity if the government had deemed it worth saving. In other words, the government is giving PNC money that might otherwise have gone to NatCity as a reward for taking over NatCity.

I don’t know about you, but I’m starting to feel as if we’ve been sold a bill of goods.

So, my gentle snowflakes, in typical Bush administration fashion, corporations are going to be asked to do the right thing instead of forced to do the right thing.  And we all know how that worked out.


But they’re guaranteeing the value of your Starbucks card? What more do you want? As usual, you’ll get nothing and like it!

I must admit I’m starting to understand how supporters of the Iraq war felt: the Bushies told them there was a crisis, and invasion was the only solution. Who are we to disagree with the experts?

@nojo: We are the people getting fucked in the ass, no lubricant, and a handful of sand. Enough.

@blogenfreude: Don’t forget shards of glass dipped in Tabasco sauce.

I can’t believe that Hank Paulson didn’t know exactly what his banking buddies would do with the fed handouts. Marx and Engels must be having a good chuckle in their graves.

@rptrcub: What’s up with the Prop 8 rallies? There is no news here in L.A. except the fires.

@Dodgerblue: If you go to yesterday’s Stinque photo jam you can see rptrcub’s photos from Atlanta and my photos from SF.

NYT article and
SF Chronicle
both have good coverage.

Is it smoky down by you? The photos on the LA Times website of the fires are wild.

@Dodgerblue: Nationally (and internationally, Toronto specifically), it appears that no one lost their minds and engaged in violence. It appears to be a success — in Atlanta we had crowds in the thousands, and the anti-religious posters seemed to be on the decrease (but were still there). And the event in ATL seemed to go beyond just 8 — we were also warned that our emboldened Georgia GOP will most likely go for banning gay adoption this year.

We didn’t even have any haters protesting about how God is sending us to hell.

I will say this — the MSM has seemed to be extremely lazy outside of the largest metros in covering this story. The Atlanta Journal-Constitution did not bother to have a bylined story about Atlanta’s activities alone at a state capitol rally and then a later candlelight vigil — instead, it just added a few paragraphs and quotes to an AP story. The blogosphere and Facebook, just like in planning this stuff, are carrying the weight of reporting.

I was able to get my assignment editor friend at the CBS affiliate in Atlanta to get out there and cover this stuff. A fellow member of the family, a videographer, came to the rally on his free time from his house and did not clock in, just to cover the event.

On the bright side, I think it was a lack of pre-event coverage which allowed for a fundie-free protest.

The next step, as SFL has told me, is A Day Without A Gay — 12/10. Instead of working, people are asked to call in sick/gay/whatever and donate their time to volunteer service. Straight friends are welcome, too.

And as SFL has stated — I hope you are able to breathe down there!

@rptrcub: @SanFranLefty: thanks for the links.

Yes, it’s very smoky down here, the sky is yellow-brown and you can’t avoid the brushfire smell wherever you go. It’s still hot but the winds have decreased so the firefighters might catch a break.

@rptrcub: The Jezzies posted pics from rallies around the country. Some very touching photos, and my new favorite sign: “Give us equal rights or we start giving bad fashion advice.” There was even an article (with picture!) in the Tulsa paper.

Why aren’t we all out there on the street with pitchforks and torches? Or Molotove cocktails and shotguns and uzis and RPGs?

@Mistress Cynica: That’s my favorite.

@redmanlaw: Good. Maybe I’m just pissy about the Atlanta Urinal and Constipation being a bunch of lazy asses.

@Promnight: While I embraced the idea of a bunch of armed people in the streets when I first got angry, and actually suggested the firebombing of Mormon churches (which I apologized for later at the places where I posted such comments), I don’t think that helps us in the end. Non-violence will probably do better in the end on this matter. However, I’m getting tired of the right telling me “you lost, get over it, the people have spoken.” That’s tantamount to telling me to sit down and shut up, and we have come to the point that GLBTs and allies are refusing to do so.

Now if the Adkisson brigades start opening fire on gay & allied gatherings or bombing gay bars like Eric Rudolph, I hereby appoint RML to train us in firearms.

@Dodgerblue: It’s also bad when the coroner’s office burns down.

I hate to say this, but under the Unified Fundamentalist Theory of God sending down plagues and fire whenever God doesn’t like a political decision, this surely means that God is punishing California for Proposition 8.

The local paper here covered the protest and even put a photo slideshow on the website. They say 2000 people showed up and marched to the state capitol.

@rptrcub: I meant over Paulson stealing a trillion dollars for his banker buddies, man.

Looks Wall St needs a come to Jeebus moment. Either change or the people change you.

Conde Nast Portfolio has a good article written by Michael Lewis (the author of Liars Poker which still makes sense today despite being written 20 years ago) about the whole Wall St mindset.


@rptrcub: Well, Oprah’s neighbors in Montecito (near Santa Barbara) would probably be mostly against Prop 8, but the LA, Orange, Riverside and San Bernardino County areas burning up are among the gay hating neighborhoods of CA.

@ManchuCandidate: Jinx jinx personal jinx!! On another thread.

Oops. It certainly is an interesting article.

They (Wall St) is really fucked in the head.

@ManchuCandidate: But they made tons of money while getting said fucking.

@Promnight: Oh, well then, I’d say we need to start stockpiling.

@Dodgerblue: I *was* going to say that but I didn’t want to prejudge everyone there. (California counties are waaay larger than Georgia’s 159, so I didn’t know if I could paint an entire region in a particular stripe like you can here.)

True, but it’s now over.

I have a couple of maternal cousins (one is a junior hedgefund manger) who were part of the game. My imbecile doctor uncle used to call my mom (his sis) and brag about how much “money” my cousins were making. My mom being my mom would tell me to “encourage”/piss me off, but I told her: “it doesn’t matter. When the sub prime bomb explodes that money won’t mean shit.” My uncle hasn’t called to brag in about a year and half. Heh.

What will the self important dumbasses do now? Where will they go? What will they do?

Of course I have a suggestion to Wall St that covers both: “Go fuck yourself.”

I highly recommend Michael Lewis’ Liars Poker for those who want to understand the way Wall St has worked for the last 30(!) years.

@ManchuCandidate: Lewis just wrote an article for one of the respectable magazines, I forget which, I read it online, in which he connects it all, Liars Poker, and what has happened, and its just wonderful, wish I had a link, googling his name might turn it up, it was published online last week, coming out in the new issue of whatever magazine it was, it was GREAT.

@rptrcub: Hey, civil rights for homosexuals will be on the agenda of my revolution, fear not. I am in favor of eliminating all government sanctioned discrimination, marriage, military service, and tax breaks for religious organizations that discriminate, and even more importantly, changing the attitude of society at large which somehow in the 21st century allows hating homosexuals to be the last quasi-acceptable form of bigotry.

Here is the links to the article

See this comment.

Or the earlier one posted minutes earlier by DB.

@Promnight: Respectable? Like Field and Stream, or something questionable like Rifle Shooter or Revolver (hard rock, not wheel guns), or a niche pub like Sports Afield or Turkey Call?

Son: “You’re obsessed with the outdoors.”
Me: “Yep.”

@Promnight: And I will assist you gladly in that revolution. Srsly, Billy Bragg’s version of The Internationale came up on my iTunes.

@rptrcub: Saw a little pink .32 auto in the gun store the other day that would have been fun to teach with. “OK, ladies, and gentlemen and gentlemen and girls . . . “

@rptrcub: Friday night I watched the documentary about Billy Bragg and Wilco putting those unpublished, never even sung, Woody Guthrie songs to music, it was amazing, Bragg is the only one left, the only person making real revolutionary fight songs for us to sing on the barricades, “Never Cross a Picket Line,” “Waiting for the Great Leap Forward,” The Internationale. And the one that came from the Wilco-Woody Guthrie project, “All You Fascists,” the punk rock commie anthem that never fails to get me screaming along at top volume with the refrain.

@redmanlaw: RML, here is the story in full, “The Modified Stationary Panic.” http://www.blinn.edu/humanities/jnabors/2008/1301%20Material/Modified%20Stationary%20Panic.htm

Read it, it will take all of 10 minutes, the man is a treasure, I insist, demand, that you read it, there is a place for good, gentle, hilarious comedy with no bitterness in it in the world, read it, RML, and report back, it will make you heart glad. I am going to go read it again, for the 20th time.

@Promnight: My friends and I refer to our survival gear as “things to amuse ourselves with before we die.” I read McManus every month in Outdoor Life. His most recent was on a bird watching expedition to a remote Australian lake.

@Promnight: Awesome doc, dja notice how Tweedy gets a little annoyed towards the end of the writing and recording process because Bill is *so* committed to the cause?

I’ve enjoyed Billy Bragg’s election year takes on American politics for the last 25 years, catching him live at least once per two year cycle in that period. I think Steve Earle is the only other one to come close in terms of musical heft and socio-political acumen.

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