I was reading a story online tonight about Merrill Lynch. Merrill Lynch was a 100 year old investment firm was acquired so to speak by a merger into its Bank of America last September for 50 Billion dollars. On the surface it was not a bailout by the Government, but it was another one of those "To big to fail categories" that we hear so much these days. New management was supposed to turn things around, but did it? In the last quarter of 2008 Merrill Lynch took a 15 Billion dollar loss, but also paid out 4 Billion Dollars in Bonuses! That is right 4 Billion dollars in bonuses!
For the other banks that have received bailout monies, they are buying other banks with the money, they are still making major contributions to politicians with taxpayers monies, and they are still really not making loans! All of the promises from Congress, said this will get things moving...we went through the bailout of AIG, the failure of WaMu, 28 bank failures, all of the major US investment firms ceased doing business last year, Fannie Mae, Freddie Mac, GM, FORD, and after each intervention the economy seems to have gotten worse. Is there really a need for the bailouts public or private? Freddie Mac wants another 35 Billion dollars and they are definitley still giving money to those in congress.
My question is this. Have any of the the interventions impacted your life in a positive way? Should we have allowed loser companies to just fold and go their way of all bad business? We are talking about another type of bankruptcy here, and it cannot be fixed. It is called "Moral bankruptcy!" It is no different than an addict taking the entire weeks paycheck and wanting to throw one more party before they sober up. Have you called your Congressman and Senators to voice your concerns? You should, it is your money they are giving away.
The bailouts in my own opinion are total losers!
RE/MAX Paramount Properties 678-595-5283 Direct
Or 888-940-0074 Toll Free Office
Atlanta Real Estate Agents, Alpharetta GA Homes for Sale, Dunwoody GA Homes for Sale, Atlanta Real Estate & Atlanta Homes for Sale 
Gwinnett Homes for Sale
Atlanta Real Estate Blog, Cumming GA Homes 
Jim, wow, very thought provoking. I am not sure what to think about this. Is there really anything we can do, or is the government making all the decisions, and is there a bigger picture as to why they are doing this? I am not sure why the government is allowing Merrill Lynch to pay out $4 billion in bonuses when they lose $15 billion. How are they getting away with this?
Hi Jim, I agree. We are no longer a capitalistic country. We have become a socialistic country. No longer, does the free market prevail. Our government, we the citizens of the government are spending billions on companies that should be allowed to fail. If the politicians really wanted to bailout the economy and really wanted to provide a stimulus to the economy, they should have taken the 800 billion and divided it up and sent it out to each legal taxpayer. Even that I am not in favor of. We need less government, not more.
That story got my blood boiling. Why would the government bail their a__ if they can "afford" to reward people for doing such a lousy job? Seeing this staggering amount is mind-boggling. In my opinion, what they did is pure EVIL!
I can't believe they would have the gall....the GALL! ,... to ask for a bailout.
Source: Daryl Cagel's Professional Cartoonists Index at www.cagle.com
Jim,
I'm from your neck of the woods and my mom is the VP of a Bank in your neck of the woods... there are things going on that are not that pretty that has not even been told about yet.
Media reports are about 4 months behind from my estimations...
The bailouts are a complete loser and the "stimulus" packages are complete losers made up by a bunch of Attorneys that are clueless about business.
Correct me If I'm wrong.. but I was warning you about this several months ago... and I'm warning you now that it's going to get a lot worse....
Keep it real and that's what we need....
THEY are not the total losers. The THEY that won in the bail-outs were the insiders, the Paulson cronies, the Representatives and Senators who get the PAC money and the executives of the companies that got bail-out money before jumping ship, ala Raines.
The American people have lost the next 10 years of our financial life. This will take a financial revolution to get back to a capitalist system of government. It's gone for now.
The Fed is a banking cartel. They are a group of banks who make sure the bank's interests are protected. It might look like they have a little government control over them but those few government controllers are all captured with "bribes" which we call political contributions and future cushy jobs for them and their families.
When you see it as what it is, it all makes perfect sense. They are making sure their favorite sons are getting stocked up before the real crash happens.
We need to let the banks fail, abolish the Fed, and start over on a sound foundation. We also need to lock up those executives found to have committed fraud.
You also need about 400 "untouchables" who can get elected to the Congress. People who can't be intimidated with threats to themselves or their families. People who respect the principles of this country and can't be bought. Only then can we see some real change.
Shareholders of BOA were sold a bill of goods by their board, who (intentionally) did not do their due diligence on ML and misrepresented the deal...of course, what BOA did not disclose to their shareholders is that the Govt. asked/insisted/extorted BOA to bail out ML because Wall St could not afford for another venerable old firm to fail after Lehman Bros went down.
So, BOA played ball and the recent infusion of cash came their way because they did what the govt. asked them to do.
A group of BOA shareholders is filing a lawsuit over this; since I imagine no one, least of all the Feds, want discovery to take place on this issue, I can only imagine the quiet settlement.
We have all been fat, dumb and happy - as long as the equity in our homes continued to rise, we felt affluent and satisfied. When the housing market went down, though, the house of cards fell and it's one gigantic mess that will take many, many years from which to recover.
Troy Erickson - Chandler, Gilbert, Queen Creek, Phoenix, AZ and East Valley Team (Terra Solis Realty, LLC) Bank of America and Merrill Lynch was not part of teh bailout, but a private sector deal. However, this deal makes you stop and think. Why 4 billion in bonuses after a bad quarter?
Doug Aaserude (Inactive until May. 2009) Less government woudl be better. We need a more effective government, not a bigger one.
Think about this. The tomato recall earlier this year? The government was never able to determine the source of the salmonella out break. Farmers lost entire crops. It was determined months later it was peppers from Mexico? (Farmers lost millions, and we not compensated from a government that does not know what it is doing!)
Next item the border. Since 9/11 drugs, and illegal aliens cross the border at will.
Create more jobs? We had jobs!
Govenment is asleep at the wheel. They are the cause!
Pacita C Dimacali, Alameda & Contra Costa CA real estate (Gallagher & Lindsey, Inc. 510 748 1148) This one is not a bailout that we know of, but I am sure there are stockholders involved. The heads of these companies are enriching themselves and their legion at the cost of others. So if B of A was to find itself in trouble, would they knock at the Feds door seeking money? If so, my answer knowing this would be "NO!"
Las Vegas Real Estate - Paul Francis, CRS (Prudential Americana Group) I know it is going to get a lot worse. Bureaucrats that have never had a private sector job in their life don't know how things work in teh real world. Profit and loss are not in their vocabulary. Their Utopia is the Federal governement buracracy where there is never a layoff, there is no accountability, no one ever has to account for real productivity. It is a sham.
Lenn Harley Homefinders.com MD & VA Real Estate I totally agee, and "We the sheeple of the United States" won't do anything to demand investigations, there are no indictments, Senators and congressman are still accepting lobbyist mones from Fannie Mae, Freddie Mac, the banks. Can anyone say, "Conflict of interests, bribes, unethical behavior, censureship, and lengthy jail terms?"
Tim Maitski "Secret Agent Guy" (HomeAtlanta.com) Tim I totally agree, and I firmly blame Congress for our troubles. I call my eleceted represenatives about once or twice a month.
Susan Haughton Alexandria, VA REALTOR® (Long & Foster REALTORS® Old Town Alexandria) Very well said. I agree. The most obvious thing even to a blind person is that B of A took over Merrill at the request of the Federal government in return for favors and promises. Share holders in these companies lost their asses. 4 billion dollar in bonuses? God help the USA!
Nothing should be "To Big to Fail". It fails due to unsound business practices, greed, and becoming complaicent.
I'm not opposed to throwing money (tax dollars) to revive things, but at this point all the billions dulled out has been a complete failure. Those that begged for billions, threatened to collapse without the billions are now squandering the money. Then we have the automakers due back in a month to beg for more billions to stay in business while my neighborhood bar and grill had to close down and displace 15 workers. Hell 20K would have kept them afloat for a little longer.
The Government now has "skin" in the deal but no board seats. Im not oppesed to the bail out but the Government should have a say if they spend the money. Warren Buffett would never infuse such capital without having a substancial say in what happens to his investment. The Government board seat though was percieved as "Socialist" which then gave the Banks freedom to continue as they always have. They squandered the money, and now need more.
Let them all fail, their will be some dire times. It may be a good thing though as the weak will fail and the strong will emerge to rebuild. We are supposed to learn from history. I've seen many of pics and i'm fortunate to still have Grandma (97 years old and healthy somewhat!) who loves to talk about the 1920s and the hard times. It built a stronger nation though.
My point though Jim, Is I agree with you. Its rare when we actually take a stance and can agree! You are still one of my favorites though. You should have a talk radio show much like Sean Hannity (I disagree with him alot but I do find him entertaining).
At my house we are pretty disgusted with the whole bailout thing.
It's free money Jim. I would take it also if I could get my hands on it.
Chad Baird (Re/Max Spirit Chad we are both Americans and actually we have a lot more common ground than you think. We are both patriotic, and place the nation very high in our own ideals. I personally believe that as a nation we are being played...by Congress. They should not be able to accept lobbyist moneys for any reason. Not even a McDonald Hamburger. Nor should their families or fortunes be enriched at the expense of the taxpayers. At each bailout we were told, thing will get better soon. It is a lie...there is no relief. Fannie Mae and Freddie Mac are still allowed to lobby Congress. Banks are lobbying congress wiht Tarp funds. It is sickening.
A European article I read several months ago said the initial bailouts would not work, they weren't big enough. They mentioned in the article the correct number would be conservatively 3.5-4 Trillion dollars. So the first bailouts were to get us past the elections...then the truth would have to start coming out. They are bleeding us to death with a paper cut here, and that really annoys me. Let bad banks, and bad businesses fail!
Stephen Parks Destination San Antonio () Everyone is, but we must pass that on to our elected representatives.
John Walters (7824 Real Estate of Louisiana) John, no you wouldn't. You are a good guy!
Jim, the one I love is Citibank using part of their $45 billion to purchase a $50 million dollar corporate jet--and they're buying it from France! It is moral bankruptcy, and yes I've contacted my representatives, but there's so much corruption I don't think it can be fixed--short of starting over.
Jim, it's a bloody mess and the rest of the world are laughing at us. How can we, the tax payer, just allow this to happen. The last comment here really pushed buttons.
John Mulkey, Housing Guru (TheHousingGuru.com) That is one I've not heard of before. That is sickening!
Ellie McIntire Real Estate in Howard County Maryland (The McIntire Team of Long & Foster) I know...I could not beleive it when I read about it. I will contact my elected officials tomorrow and give them a piece of my mind!
The good news is Georgia Senator Johnny Isakson is trying to get a committee to investigate the causes of the financial collapse and hopefully a few culpable heads will roll.
I worry about America as the only honest politician in the last election was Ron Paul, but he only got about 3% of the primary vote.... Americans justdon't seem to care yet, perhaps once most are homeless and starving they will have 10 years to grouse until things recover???
Bailout, stimulus plan, taxpayer investment, TARP, how many more ways can you lie to the American people about deficit spending Congress???
Phil We need a special prosecutor!
I have been calling his office and Senator Chambliss office for months demanding investigations. Tom Price is excellent in my district. Also, not one listend to H. Ross Perot. He gave us plenty of warning and no one wanted to listen! "Life is too good!" We need to place our seatbelts on, the ride is just about to start.
Jim,
You sure are right. It's pitiful to watch how aimless the government's efforts have been thus far to put some backbone to the financial markets. Not only that but how irresponsibly are these CEOs behaving while the house is burning.
Esko Kiuru - Las Vegas NV Mortgage Consultant (Sinifox Financial) It is sad, but sadder that Congress is worse. This is what happens when you have to pay back those political favors. Their greed is so transparent.
"I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them."- Thomas Jefferson
I just wanted to share this quote from Thomas Jefferson. There are a lot of lessons, and amazing foresight, in his writings. The one hope that I have out of all of this madness that is going on with the so-called bail out money is that it will create a new unity in our country, no matter what our political beliefs. This is our chance as taxpayers and Americans to begin the end of business as usual with these large corporations and the fat cats they help pay to keep in office and in their pockets.
There is a Congressional Oversight Panel that's been put in place to look into and oversee how the money is being spent. This panel is not made up of politicians. They have a website that we can all put in our comments and any questions we would like to see them get answers to. I encourage everyone to visit the sight and review their reports. There are now 2 reports out. The website is www.cop.senate.gov. Let them hear your voice. The only problem is they are having trouble getting all of the answers they ask for. The treasury dept apparently doesn't feel they have to answer to the people that have been given no authority to do anything but report back to Congress. Perhaps if there are enough of our voices on their website, the panel will be able to get Congress to do something more than point fingers at the opposing parties.
Jen Olson (First Weber Group Realtors) What a great quote. I personally believe that good will come out of this for all. There are always lessons in life, and new common ground. It should never be about politics, but of service to the ideals this nation was founded under. Thank you for sharing the site, I will check it out, and book mark it.
Jim,
I couldn't agree with you more!
Jen Olson (First Weber Group Realtors) Thanks Jen. Have a great day!