CORPORATE (TAXPAYER-FUNDED) WELFARE -By Nicolo Vecki

If you have any sort of opinion on the recent tumult in the banking industry chances are that you fall into one of two camps:
You either blame policy makers in Congress, the Treasury Department, and the Federal Reserve along with bank executives, and Wall Street traders for greedily lining their pockets and doing whatever it takes to show profits this quarter while saying to hell with tomorrow.
Or you blame poor people who took the bait of double mortgages, 3-year ARMs, no-money-down home loans and maybe fibbed about their income because they thought they were finally going to get a piece of the American Dream. And in that case you probably also blame the angry liberal media for precipitating the predicament were in with all their baseless claims that we were heading for a recession.
There’s a lot of talk that this is no time to be pointing fingers, and that we just need to focus on the solution. But I think this is a great time to point fingers. Let’s start with asset management companies Pimco, BlackRock, Morgan Stanley, the Blackstone Group private equity firm, Bank of New York Mellon, and JPMorgan Chase. Last year many of these companies placed bets against banks that have since failed, and now they’ve swooped in to purchase the failed companies at bargain-basement prices. Some of these companies have advised the Treasury Department on structuring the bailout package and have added language to the proposal that will directly benefit their own financial institutions. Many of them sent lobbyists to Congress last week to coax policy makers into passing the bailout package as soon as possible. Many of these companies are competing for rolls in managing assets involved with the bailout package. This is work that could earn them $1 billion a year, and that’s a conservative calculation according to an article this week in the New York Times. Some financial institutions stand to gain much, much more.
JPMorgan Chase bought Bear Stearns for a song earlier this year, and now they’ve purchased a vast share in Washington Mutual. In both purchases JPMorgan was the only company allowed to make a bid in deals that were facilitated by the Treasury Department and The Federal Reserve. (Keep in mind that JP Morgan played an instrumental roll in creating the Federal Reserve in 1913—is his bank still getting kickbacks thanks to their 100-year old relationship with the Fed?)
Goldman Sachs is the winningest investment bank in the U.S. right now. Last week when it looked like the bank was faltering a little bit, Warren Buffet stepped in and invested $5 billion in the company. Considering the current environment of the banking system Goldman Sachs appears bulletproof by comparison to other banks. Could this be because former Goldman Sachs CEO Henry Paulson is the current Secretary of Treasury? And why does all of this just happen to occur with less than 40 days before the next presidential election? Maybe because Bush administration cronies see that the sun is setting on legalized stealing. And they realize that if they’re going to rob the joint, they had better do it now.
Lastly, Where is the $700 billion supposed to come from? This week at a meeting of the Joint Economic Committee, Fed Chairman Ben Bernanke stated that he didn’t plan on having to monetize any part of the bailout, which means he doesn’t plan on borrowing the money by selling treasury securities to foreign central banks, and he doesn’t plan on printing the money and thus create more inflation. So where the hell else is the money going to come from? Bernanke mumbled that, “The Fed had an independent instrument, its management monetary policy.” That’s the best I could make out what he said. What’s that like magic or something? Does he mean they’re going to reach into an alternate dimension where they’ve got a unicorn shitting out golden eggs or what? While a lot of this banking situation is by design very fuzzy, you can rest assured that it’s fuzzy so that nobody understands what’s happening while a handful of individuals run off with a shit ton on money—all that money that vanished from your 401K this week didn’t just disappear into thin air.

Also read:
“Big Financiers Start Lobbying For Wider Financial Aid” –New York Times

Watch this video to see if you can figure out what Bernanke says about the bailout money: