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AP Says Bush Overpaid Banks In ‘Bailout’

From the Pavlovian-conditioned Associated Press:

Bush overpaid banks in bailout, watchdog says

By JIM KUHNHENN Associated Press Writer

Posted: 02/06/2009

WASHINGTON—The Bush administration overpaid tens of billions of dollars for stocks and other assets in its massive bailout last year of Wall Street banks and financial institutions, a new study by a government watchdog says.

The Congressional Oversight Panel, in a report released Friday, said last year’s overpayments amounted to a taxpayer-financed $78 billion subsidy of the firms…

Financially ailing insurance giant American International Group, which the Treasury Department deemed to be too big to be allowed to fail, received $40 billion from the Treasury for assets valued at $14.8 billion, the oversight panel found.

"Now there could be lots of policy reasons that Treasury might decide that it wanted this money to be in the banks," panel chairwoman Elizabeth Warren said Friday morning on CBS. "But our question is the one we put to Secretary Paulson, and that is, ‘Are you putting it in and getting back assets that are worth equivalent value?’ He told us yes; our independent investigation said no." …

The oversight panel examined 10 transactions, including eight made under a capital purchase program designed to put liquidity into the banks in hopes of easing credit. That money went to banks considered "healthy" financially but in need of capital to make loans.

Two other transactions went to AIG and to Citigroup Inc. under programs designed to help companies that were facing serious financial difficulties.

Overall, the panel and the analysts it retained to conduct the valuation study found that the Treasury used taxpayers’ money to pay $62.5 billion more than the value of assets in the 10 transactions it examined. By extrapolating to the more than 300 institutions that received money, the panel concluded that the government in effect paid $78 billion more than the actual value of the assets at the time

Senate Banking Chairman Chris Dodd, D-Conn., said the overpayment was sure to "raise eyebrows."

"I can understand some gap," he said. "No one is expecting perfection between the price you pay and what you think you’re getting. But that’s a pretty large disparity."

That’s right, it’s all Mr. Bush’s fault.

He alone wrote the TARP legislation and rammed it through. We remember it like it was yesterday.

Funny, how we are doing the same thing again with the “stimulus” bill – only more so.

But eventually this fiasco too will be blamed on anyone but the real culprits.

And isn’t it just too rich for the AP to go to Mr. Dodd for a “tut-tut” quote?

This article was posted by Steve on Friday, February 6th, 2009. Comments are currently closed.

10 Responses to “AP Says Bush Overpaid Banks In ‘Bailout’”

  1. heykev says:

    It’s only a matter of time before Bush is blamed for the Stimulus Package of 09’s failure as well – once it’s passed and fails. Somehow everything is Bush’s fault. While I do believe his bailout will go down as Bush’s biggest mistake – mainly for abandoning his Capitalistic principals so he can save capitalism (something I never did understand).

    On a different note, I believe it is also Bush’s fault that Angelina Jolie has not called proreason.

  2. pdsand says:

    As it was exhaustively explained by Mr. Limbaugh, by definition bailout means that you overpay for the assets. If you just pay the market price of the assets you’re not doing anyone any favors, because the banks were in trouble because they had to “mark-to-market” and the market price was so drastically low. So the point of the bailout was to buy them for more than they were currently worth to get them off their books, and give them a little injection of capital. That’s why Mr. Limbaugh complained so bitterly about how loosely the law was written. It gave blanket authority to Mr. Paulson to buy whichever assets he desired at whichever price he wished to pay so that he could advance the goal of providing for economic security for Americans.
    Now if this panel wishes to point out that the entire boondoggle was a waste of time and money, and outside of the scope of the federal government, then they are right on point. But to merely point out that the bailout funds were used to overpay for severely depressed assets (which it was by design supposed to do), then they are very much like Inspector Renault in Casablanca (shocked, shocked! to find that GAMBLING is going on here!)

    • Rusty Shackleford says:

      pdsand, very excellent post.

      Often a subject of my co-workers, I’ve taken the position that the banks should never have received any money.
      1) It would delay the inevitable, thus wasting money down the black hole…
      2) Any time the government plays in the garden, the crops wither and usually die
      3) It set a president to allow any flopped business (Larry Flynt, the Big Three…etc) to come whining for “help” (pronounced “cash”) and the worst part….

      4) Allows the government the foot-in-the-door to CONTROL said money by use of monitoring, regulating, penalizing, assessing, and being a general pain-in-the-ass.

      Now, I don’t particularly care WHO or WHICH PARTY is responsible…but like Iraq…what’s done is done and ….much to my despair, probably cannot be UNdone. Creeping socialism, only this time the “creep” is Bo-Bo and it’s turned into an all-out run. And to borrow from Star Wars, “This is how liberty dies. To the sound of thunderous applause”.

      I am but 47 but I feel like a Jew in 1935 Germany. I am a white male, employed, single and a veteran; Apparently everything Bo-Bo hates. I’ve never smoked dope, never been to a protest rally, never attended a church of the divine hatred and believe that one must earn their keep in this tough, unfair, and often cruel world.

      This walking turd of a president, with his equally odoriferous cabinet and minions seems to think he can legislate everything. And…with the help of a largely ignorant American populace (pronounced “sheeple”), he may succeed. I hope, for the sake of my children and my grandchildren that he does not. I, on the other hand, am watching this twit’s every move and I can identify a wave of racial hatred, a vendetta against the middle class, which to his juvenile point of view, funded hatred against blacks ….but the irony there is he never experienced any of that. He neither lived anywhere near it, nor had any firsthand experience of it.

      But I see a glow on the horizon and it comes with huge volumes of people who think they will be participating in something magical. Something extraordinary, something…..revolutionary. They will adopt the symbols of the US and unfortunately, if people of the world find the US unpopular now, wait til a year from now…and four years from now.

      But his conquest will be of the freedom we all so love and hold dear, the rights we are born with, the choices we’re allowed to make and the ability to go where we want, when we want.

      It starts with things that “are for the good of the American people”; A concept that if you disagree with it, based on a solid logical foundation, you will be shouted down by “the party”. And, if you continue to protest such idiocy, they will do away with you. Witness the return of the “fairness act” that liberals are scratching at the door to try to get it back in action. They want to silence Ann Coulter, Bill O’Reilly, Rush Limbaugh and any and all naysayers who disparage Bo-Bo’s divine overflowing light.

      Some say they make him a false messiah. I say it’s simply a case of Americans’ love of soundbites and feel-good rhetoric, brought on by years of media exposure, that made them as excited about this politician cum street urchin as they are about the next new thing in beer.

      It won’t take long for the glow to dim, the exciting words to become dull, the “well-spoken-ness” to become old saws and a broken record. But it will take time for the average dullard to realize it. Take heart, for even the biased media started slamming Bill-Jeff when he was no longer the “chosen one” when Bo-Bo was awarded the conch.

      And indeed, we seem to be experiencing our own “Lord Of The Flies” episode and they want to kill the pig….while Piggy as apparently lost his glasses.

      We are a young nation. We may lose this time though because we may find ourselves a victim of our own freedoms. Doesn’t have to be that way, but when given the right circumstances, people can be convinced to burn their own house down and kill their own children if they think that’s the only way. And don’t laugh. It has happened….more than once in this country.

      I just hope more and more people realize the crap this administration is trying to lay on us. And why has no one questioned as to why it seems to be happening so fast, without any apparent cross-examination? Those who criticize it are skewered as “unpatriotic”.

      Trust me. I’m worried and not a little bit scared of what may come. I’m not trying to say the sky is falling…but I’m seeing a meteor or two.

    • pdsand says:

      “It would delay the inevitable, thus wasting money down the black hole…”
      Exactly. If the bailout of the banks had not passed, the only form of lending that would have stopped would have been subprime mortgage lending. If the government had not intervened, the market solution would have been that all mortgage lending goes back to underwriting rules that make sense, vis a vis the early 70s when you had to make a down payment and sit down and go over all your books in detail with the bank before they approved your loan. Seems reasonable considering they’re about to get into a 30 year relationship with you where they’re counting on a timely and sufficient check from you each month in order to determine if they made a good decision, right? Instead, they bailed them out so that the whole house of cards of subprime lending, mortgage backed securities, insurance credit swaps, Sarbanes-Oxley and on and on didn’t collapse. Of course what’s going to happen here in about another 5 years? It’s baaaccckkk…the creature from the Clinton administration!!! Hide your children! Put your money in your mattress!!
      I wonder who they’ll blame next time though, when it turns out the only person they could get to be CEO of AIG and Citibank for $500k for the next 5 years were high school kids who needed part-time jobs?

  3. retire05 says:

    Never mind that the TARP bill was written by the drug abuser, Patrick Kennedy (D) with help from Timothy Geithner. Never mind that it is Congress’s responsibility to build in the checks and balanances system anytime they spend our money. Never mind that it is the repsonsibility of Congress to oversee the spending of the TARP money. Now we learn that 20% of the first $350 billion has gone into the ethernet to never been seen again.

    And who is the head of the Congressional Banking Committee?


  4. Reality Bytes says:

    To be honest, he did pay too much for the Rangers too, didn’t he?

  5. canary says:

    Bush should got an early start handing out condoms and international abortions, then we woudn’t have to be terrorized by Obama’s daily threat we are headed for disastor. Now all future woes, Obama will tell the ignorant, that Republicans delayed his proposal for a entire week and that is why so many will be standing in line for their soup. The most sick thing I heard was yesterday’s Democratic retreat party, Nancy Pelosi gushing about Obama’s earlier prayer that morning at the breakfast party. She went on and on, about how Obama went on and on, that the Koran, and other religious all had “love they neighbor” b.s. Yeah, love a fellow muslim. The Koran is kill non-believers of their sect. Then Pelosi went on all about the wind blowng through fields and poetic stuff, you’d hear at a library read. Then Obama got up and aside his bragging how cool getting to use AF-1, was line after line about “they” the Republicans destroying the country.

    • BumBastikk says:

      If you could, please direct us to the specific passages within the Qu’ran that state all non-believers should be killed. Also, doesn’t the bible say: “Thou shall not kill”, and yet Christians and Muslims clashed in the crusades over “the Holy Land”. Do you even know anyone who is Muslim? Did you know that campaigns were also waged against political enemies of the pope, as well as pagans, jews, and “barabarian tribes”? This just sounds like a rant.

    • Liberals Demise says:

      Bum…..I’ll give you this:
      If the Qu’ran is all about “peace”, WHY are all the “RETARDS” killing in the name of Islam? Is this not the word of the so called peace?
      KILLING IS KILLING BUT……using women and children as a shield is another.
      WHERE IN THE BIBLE ….did anyone use women and childern as a shield to better themselves and got away with it?
      Hiding behind ones religion is a cop out. Yes I know a Muslim, he is a Brother Marine of mine and…..yes….he is a Marine first!!

    • Consilience says:

      Bum, If you didn’t read the piece in the WSJ by Daniel Pearls parents, perhaps you should. Where have you been, the murdering bastards have been killing in the name of the “religion of peace” for some time. Read “Because They Hate” by a young lady who live in Lebanon while the soldiers of the “religion of peace” were on the move. My guess is you’re an idiot-sympathizer hoping the alligator will eat you last….

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