CHESSNOID

I still think it is a moral hazard to commit the biggest bailouts of recent times.  Costing almost a trillion dollars, and no one really knows where it is going. I have to guess someone isn’t happy with certain CEO crooks getting a big payday while the companies struggle and layoff thousands.

My other reason for being against this bailout is you have the 3 stooges BUSH,BERNANKE, and PAULSON in charge.  The same 3 who put us in this mess.  No Democrat, Republican, or Independent can argue against that reasonably, unless of course you think the economy is doing OK. In that case, your perception or reality is fantasy.  Even the richest men are losing a ton of money:

Yahoo AP:

Topping that list is Buffett, who has seen the value of equity in his company, Berkshire Hathaway, fall by about $13.6 billion, or 22 percent, so far this year, to leave his holdings valued at $48.1 billion. Oracle founder and CEO Larry Ellison has seen his equity stake fall by $6.2 billion, or about 24 percent, to $20.1 billion, according to the research that ran from the start of the year through the close of trading Oct. 29.

Rounding out the top five in that study were Microsoft’s Steve Ballmer, whose company equity fell by $5.1 billion to $9.4 billion; Amazon.com’s Jeff Bezos, whose equity fell by $3.6 billion to $5.7 billion; and News Corp.’s Rupert Murdoch, with a $4 billion contraction to $3 billion.

News Corp. and Microsoft declined comment, while representatives from Berkshire Hathaway, Oracle and Amazon.com didn’t respond to requests for comment.

Back to the bailouts, tax money going to these bankrupt companies should not be going to pay big bonuses of executives who did not get these companies to produce a profit. Why in the world would the government allow tax money to go pay their bonuses? Let’s see, Paulson use to be the Goldman Sach’s CEO. According to the Financial Times:

According to page 20 the Goldman Sachs 10-Q regulatory filing for the first quarter of 2006:

During the three months ended February 2006 and February 2005, the firm securitised $19.25bn and $15.24bn, respectively, of financial assets, including $18.15bn and $14.43bn, respectively, of residential mortgage loans and securities.

Meanwhile, on page 22, we find that Goldman had big exposures to Variable Interest Entities “which primarily issue mortgage-backed and other asset backed securites and collateralised debt obligations”. The exposures included $22bn of CDOs, $2.9bn of “asset repackagings and credit-linked notes” and $6.5bn of “mortgage-backed and other asset-backed” securities.

Mr Paulson now declares himself shocked, shocked that structured finance was going on on Wall Street but he was there at the time, and the $18.7m bonus he received for the first half of 2006 presumably reflected it.

I wonder if, as a public gesture, Mr Paulson might consider handing that bonus over to the Treasury’s fund and lowering the US taxpayer’s bill by $18.7m?

I know, old news who cares? What about today and that massive taxpayer’s money used for the Fraud Bailout suppose to be used to buy bad mortgages or bank stakes?  I just read this article below (you can listen to the video if you click the link to their site) where they explain where some of the money went:

Bail-Outrage: Misuse of Funds, Lack of Transparency a National Disgrace

Many Americans are understandably outraged by the bailout fever that has gripped Washington this year. But even those who believe the bailouts are a “necessary evil” would have a hard time defending some of the bailout-related items that have come to light in recent days, including:

• Financial institutions using TARP bailout money to pay executive bonuses. The firms, of course, say it’s “different” money and bonuses are key to retaining top employees. But if you need to come to the government for a handout, shouldn’t your executives forgo a bonus? Or shouldn’t the government make canceling bonuses a condition of getting aid, as is the case in Europe?
• The Fed refusing to reveal who received almost $2 trillion in non-TARP loans, or what collateral it has accepted from “emergency” loans made to struggling firms, as Bloomberg reports.

The Treasury Department providing a tax break to banks involved in acquisitions that could amount to $140 billion. The Washington Post reveals the change to the tax code was issued on Sept. 30, while Congress was debating the $700 billion TARP bill.

Since this bailout didn’t fix the mess, how is Congress going to justify asking for more money for another bailout? That is a definite “when” and not an “if” when companies go to Congress asking for money to keep their bankrupt business afloat at the taxpayer’s expense. Bush, Bernanke, Paulson, both the Senate and the House have set a bad precedence by creating the biggest moral hazards. Just say no to future bailouts!