Category Archives: Bailout

Obama’s Proposal to Loan the IMF Billions of Dollars

Obama proposes $100 billion U.S. loan for IMF

President Barack Obama on Monday proposed a $100 billion U.S. loan to the International Monetary Fund to boost the IMF’s resources and urged a bigger stake in the IMF for emerging powers.

In a letter to U.S. congressional leaders, Obama said the U.S. funding “does not represent a budgetary expenditure or any increase in the deficit since it effectively represents an exchange of assets.”

The $100 billion is part of commitments made by Group of 20 countries at a London summit on April 2, which agreed to triple IMF resources to a total of $750 billion to help the IMF respond to crises in emerging market economies as a result of the global financial crisis and economic downturn.

The U.S. funding will boost the IMF’s so-called New Arrangements to Borrow, or NAB, a facility which allows member countries to provide credit to the IMF to deal with crises that may threaten the stability of the global financial system.

Obama said the NAB was “woefully inadequate” to deal with the severe economic and financial crisis.

“The deteriorating conditions threaten to worsen the recessions in these countries and could cause currencies to collapse,” Obama wrote.

“Together, these factors, particularly if they become more acute, will further lower global growth and, as we saw during the Asian financial crisis, they will cause U.S. growth, jobs, and exports to fall even more sharply,” he added. Full Story

Jim Rogers: “abolish the World Bank and IMF”

Related Stories:

Funding the IMF for the ‘New World Order’
G20 – A New World Order for Global Recovery
How the International Monetary Fund and the World Bank Undermine Democracy and Erode Human Rights: Five Case Studies

Moyers Interview on the Manufactured Economic Collapse

The financial industry brought the economy to its knees, but how did they get away with it? With the nation wondering how to hold the bankers accountable, Bill Moyers sits down with William K. Black, the former senior regulator who cracked down on banks during the savings and loan crisis of the 1980s. Black offers his analysis of what went wrong and his critique of the bailout.

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Full Transcript

excerpt from interview

BILL MOYERS: How do they get away with it? I mean, what about their own checks and balances in the company? What about their accounting divisions?

WILLIAM K. BLACK: All of those checks and balances report to the CEO, so if the CEO goes bad, all of the checks and balances are easily overcome. And the art form is not simply to defeat those internal controls, but to suborn them, to turn them into your greatest allies. And the bonus programs are exactly how you do that.

BILL MOYERS: If I wanted to go looking for the parties to this, with a good bird dog, where would you send me?

WILLIAM K. BLACK: Well, that’s exactly what hasn’t happened. We haven’t looked, all right? The Bush Administration essentially got rid of regulation, so if nobody was looking, you were able to do this with impunity and that’s exactly what happened. Where would you look? You’d look at the specialty lenders. The lenders that did almost all of their work in the sub-prime and what’s called Alt-A, liars’ loans.

BILL MOYERS: Yeah. Liars’ loans–

WILLIAM K. BLACK: Liars’ loans.

BILL MOYERS: Why did they call them liars’ loans?

WILLIAM K. BLACK: Because they were liars’ loans.

BILL MOYERS: And they knew it?

WILLIAM K. BLACK: They knew it. They knew that they were frauds.

WILLIAM K. BLACK: Liars’ loans mean that we don’t check. You tell us what your income is. You tell us what your job is. You tell us what your assets are, and we agree to believe you. We won’t check on any of those things. And by the way, you get a better deal if you inflate your income and your job history and your assets.

BILL MOYERS: You think they really said that to borrowers?

WILLIAM K. BLACK: We know that they said that to borrowers. In fact, they were also called, in the trade, ninja loans.

BILL MOYERS: Ninja?

WILLIAM K. BLACK: Yeah, because no income verification, no job verification, no asset verification.

BILL MOYERS: You’re talking about significant American companies.

WILLIAM K. BLACK: Huge! One company produced as many losses as the entire Savings and Loan debacle.

Continue reading here: Transcript

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Obama Out of His Depth, ‘Funking Economics’

If Bush were still in office carrying out the policies that Obama has been, there’d be a lot more noise from the people. As the commentator says here, no criticism of the president is allowed. Is is denial, embarrassment, or have people stopped paying attention now that the election is over, thinking Obama will save the day?

Commentary: Obama is flunking economics

Welcome to March Madness on the Potomac.

Many Americans are so emotionally invested in the Obama presidency that they consider it too historic to fail.

They won’t tolerate any criticism of the president or his administration, finding it easier to simply attack critics. And whatever goes wrong that they can’t defend or deflect, they just blame on George W. Bush.

But to many of the rest of us, it’s clear that President Obama is flunking economics. He is trying to do too much at once, and so he is not doing any of it well. He vows to cut the federal deficit while proposing an avalanche of new spending that will — says the Congressional Budget Office — increase it by as much as $9.3 trillion over the next decade.

Here’s the really bad news, though. No matter what else goes awry, Obama’s strong suits are supposed to be communications and marketing. Yet, this week we learned that this isn’t the case when he has to communicate and market his message on economics.

It doesn’t help matters much that Treasury Secretary Tim Geithner seems too small for his chair. When he needs to inspire confidence, Geithner does the opposite. Whenever he speaks and comes up short on specifics, the Dow plummets. And when that happens, the Obama supporters don’t care and insist that Wall Street is part of the problem and thus can’t recognize the solution.

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Economists Question Obama

IBM Outsourcing Thousands of Jobs to India

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IBM draws criticism for job cuts, outsourcing

IBM’s reported plans to lay off thousands of U.S. workers and outsource many of those jobs to India, even as the company angles for billions in stimulus money, doesn’t sit well with employee rights advocates.

Business Week reports that IBM’s workforce increased from 386,558 in 2007 to 398,000 at the end of 2008.

IBM employees are being dealt a double blow, said Lee Conrad, national coordinator for Alliance@IBM, a pro-union group that has been fighting IBM’s outsourcing for years.

“We’re outraged that jobs cuts are happening in the U.S. and the work is being shifted offshore,” Conrad said. “This comes at the same time IBM has its hand out for stimulus money. This to us is totally unacceptable.”

IBM wants a share of the money in President Obama’s American Recovery and Reinvestment Act for projects updating power grids, creating electronic health care records and furthering the use of broadband.

“In the research we’ve done working with the transition team, we know that $30 billion could create 1 million jobs in the next 12 months,” IBM CEO Sam Palmisano said in January.

The problem is where those jobs would be, said Ron Hira, a professor of public policy at the Rochester Institute of Technology.

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Video

Borrowing and Spending: The Way to Hell

Geithner’s global dilemma

See Also:

Proposal of a New Reserve Currency Controlled by the IMF

Obama Wants Geitner to Seize Firms

Geithner: Give Us More Power

U.S. Seeks Expanded Power to Seize Firms

The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, according to an administration document.

The government at present has the authority to seize only banks.

Giving the Treasury secretary authority over a broader range of companies would mark a significant shift from the existing model of financial regulation, which relies on independent agencies that are shielded from the political process. The Treasury secretary, a member of the president’s Cabinet, would exercise the new powers in consultation with the White House, the Federal Reserve and other regulators, according to the document.

The administration plans to send legislation to Capitol Hill this week. Sources cautioned that the details, including the Treasury’s role, are still in flux.

Treasury Secretary Timothy F. Geithner is set to argue for the new powers at a hearing today on Capitol Hill about the furor over bonuses paid to executives at American International Group, which the government has propped up with about $180 billion in federal aid. Administration officials have said that the proposed authority would have allowed them to seize AIG last fall and wind down its operations at less cost to taxpayers.

The administration’s proposal contains two pieces. First, it would empower a government agency to take on the new role of systemic risk regulator with broad oversight of any and all financial firms whose failure could disrupt the broader economy. The Federal Reserve is widely considered to be the leading candidate for this assignment. But some critics warn that this could conflict with the Fed’s other responsibilities, particularly its control over monetary policy.

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See:

The Hypocrisy of the AIG Bonuses

The Hypocrisy of the AIG Bonuses

Obama: How Can AIG Justify This Outrage?

Chris Dodd Admits To Adding Loophole In Stimulus That Allowed A.I.G. Bonuses

Obama Angered By ‘Excess’

Proof that Chris Dodd and Tim Geitner are lying about AIG Bonuses

Shocked