What a Waste

BofA to Receive $15B in New TARP Money

You have a business that is in trouble. You receive Federal Funds to bail you out. So you then use those funds to try and buy out another hurting business because you can. Then you realize you don't have enough money to actually accomplish the acquisition.

What do you do? Well! Ask for more of course.

This is utter nonsense. If there is any further evidence you need to see to prove that the TARP is an epic failure, I don't know what else to show you. Your tax money (actually, foreign nations' capital) is being squandered left and right. If there is any further evidence that we do not need to grant the Government another $350bil to use to attempt to bail out their crook crony friends - this is it.

Please contact your Congressfolks - tell them to refuse to give the Fed one more dime.
If you'd like to suggest an alternative to this idiocy, Karl Denninger at The Market Ticker has a wonderful set of steps to allow the market to correct itself and put us back on the path to prosperity. Copy the steps from the lower part of this page (and may as well read through it while you're at it) and send them to your representatives today.

Don't stand by and allow the entire economy collapse under the weight of this debt. Do something today.

Heck, I'll post the steps right here. Copy them and fax them to your Representatives immediately:

1. Refuse to authorize the remaining $350 billion in the EESA/TARP. That bill was an act of outright theft, it could not have worked in its original form, it definitely didn't work in its modified form, and there is no defense for continuing the charade.

2. Force, either by demand or if ignored by regulation, the full disclosure of all Federal Reserve "assets", from where they came, the prices paid, and the terms, and demand that all "in extremis" programs end ninety days hence. If the Fed doesn't like this de-authorize The Federal Reserve Act and replace them. I am well-aware that this will cause the collapse of a significant number of banks. We will deal with that momentarily.

3. Withdraw all debt-based support from the general economy. It is necessary that the over-encumbered go under. We have a means of dealing with this - it is called bankruptcy. Do it and get it over with. There is no alternative and stretching this out just makes it worse. If you have cancer the longer you wait the worse it is, and if you wait too long it spreads and you die. We are very close to having the economy die; there is no time for more delay.

4. Repeal the "Bankruptcy Reform" act. That was a monstrous travesty demanded by the banking lobby to enslave Americans they knew couldn't pay! Revoke that - now - so Americans can use bankruptcy - the process for those who are over-encumbered in the general public - as well.

5. Dedicate the other $350 billion that was formerly in the second half of the TARP to capitalizing new banks. We need a banking system, but we don't need the existing banks. Provide the seed capital for new banks. At a 10% reserve ratio this will provide three and one half trillion dollars of lending capacity, all unencumbered. There are competing ideas for the bank's structure; "co-ops" (much like a credit union, perhaps hundreds of new banks) sound interesting as does just setting up ten new large banks.

6. Demand that all banks return to a 10% reserve ratio here and now. No ifs, ands or buts. Period. No more sweep accounts, no more games, no more "variable reserves" set by Ben in his "sole judgment", nothing of the kind. This strictly limits bank leverage to 10:1 - as it should. Write into the law that violations of this reserve ratio are bank fraud, a felony, and that each and every officer of said bank is personally responsible for violations. Any existing bank unable or unwilling is closed immediately by the FDIC.

7. Make all bank examinations public. We back the banks with FDIC deposit insurance, we have a right to know what they're doing, how healthy they are, and what they're holding. If you want to see the cockroaches scurry shine a bright light in the room. We need lots of bright light.

8. Force all credit-default swaps and other instruments - all of them - onto a regulated exchange. Strictly limit leverage to no more than 10:1, just as is done for banks. No exceptions, with mark-to-market being required daily. We have computers; this can easily be done and must. At the same time, end all "dark pools" and other similar gimmicks. If you want to trade it you must publish your bids and offers, print the last trade price, and do it where everyone can see it. Again - only the threat of discovery through full public transparency works to keep the crooks at bay.

9. Bring all financial firms, including insurance companies, hedge funds and others, under the 10:1 leverage limits. All firms that want to do business in the United States must comply - period. No exceptions for "special" asset classes are permitted. This instantly ends the game of "infinite earnings via infinite leverage" in the Treasury Bill market, which is currently distorting that marketplace beyond all reason.

10. End all off-balance-sheet games. All assets and liabilities must be carried, valued at the market, and disclosed on-balance sheet. No exceptions. Period.

The alternative is to just allow them to run up multi-trillion dollar (yes, I just said MULTI) deficits and send us spiraling out of control.

Quick reference - the Fed ran up an $800BIL deficit JUST IN THE LAST QUARTER.

We can't keep this up folks. We just can't.