Tuesday, November 25, 2008

WE'RE Screwed!

By l.t. Dravis

WASHINGTON, DC - Monday, September 24, 2008 – Why are we spending hundreds of billions of our dollars to save Citigroup?

We’re taxpayers and the Bush Administration and Congress have put us in debt more than $10 trillion, we’re losing our businesses and jobs at the fastest rate in decades, our retirement accounts are going bust, and trillions of dollars we invested in the stock market, are gone . . . perhaps forever.

Tragically, our children and grandchildren will pay for the sins we committed by electing and re-electing the wrong people.

That fact was underscored this weekend when Henry Paulson and Ben Bernanke, abetted by George W. Bush, negotiated a secret deal to put us another $325 billion or so in debt.

Why does Citigroup need a bailout?

Because its management got greedy and funded thousands upon thousands of subprime (translation: potentially high profit) mortgages for people who couldn’t afford them.

And, because it got greedy and mismanaged its business, Citigroup lost money every quarter for the past four quarters.

The consequence of that greed and mismanagement was revealed yesterday when we learned that Bush, Bernanke, and Paulson agreed to give Citigroup a $20 billion cash bonus plus in excess of $300 billion in deferred bonuses.

Citigroup agreed to not pay more than a penny a share in the form of dividends for three years without approval from the federal government.

But why limit dividends? Why not require Citigroup to pay 75% of dividends to the taxpayers who made it possible for the company to be around to ever pay any dividends?

And why not require Citigroup to pay those dividends to taxpayers until it repays our investment?

Citigroup also agreed to limit compensation and bonuses for executives.

Limit bonuses?

What bonuses?

Why would any of the grossly incompetent Citigroup executives who created this mess or stood by and watched their colleagues create this mess, still have jobs, much less be eligible for a bonus of any kind?

The agreement ‘asks’, but does not require Citigroup to ‘take steps to help’ homeowners facing foreclosure.

Why not require Citigroup to use taxpayer money to help taxpayers save their homes?

Why can’t any portion of those hundreds of billions of taxpayer dollars we are giving Citigroup go to revamp, revise, and refinance mortgages that have been foreclosed or will be foreclosed?

By the way, where’s the money coming from?

If any of the original $700 billion bailout ‘budget’ approved by Congress is still available, the Treasury Department will borrow and/or print the cash required to make this deal happen while the FED will ‘loan’ Citigroup enough cash to finance the remaining balance of its losses.

And where the FED will get the actual currency to ‘loan’ Citigroup?

Where else but to the same foreign banks and/or domestic printing presses?

And, what do we taxpayers give and get?

We give Citigroup approximately $325 billion in cash and loans and we get $7 billion in ‘preferred shares’ of Citigroup stock.

$325 billion for $7 billion?

Hmmmm.

Some deal.

By the way, what did George W. Bush, the obviously detached outgoing President, have to say about the Citigroup deal?

If anyone actually cares, the lame duck President threatened to reward other financial institutions for their greed and incompetence by saying, “If need be, we will make these kinds of decisions to safeguard our financial system in the future.”

So, where does this leave us?

Decorum prevents me from getting too graphic here, so permit me to simply say, “We’re screwed!”

What do you think?

Copyright © 2008 by LTD Associates West, Ltd. All rights reserved.

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1 Comments:

At November 25, 2008 at 3:40 PM , Blogger Mberenis said...

It's not all that bad, consider this. The bailout is causing lenders to practically give away money. You would be surprised at how much cheap and in some cases "free" money is going around out there.

Bailouts for Everyone

 

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