Friday, January 23, 2009

Wall Street Rapes America, Edition 9

Wall Street is a very tough place, if you don't know what is going on, your money will be taken from you. I can't think of a more outrageous rape of the taxpayer, ever, than the TARP program run by GW Treasury Secretary Henry Paulson. It should be noted that Paulson's lieutenant in the rape of the taxpayer was Timothy Geithenr, who came up short paying his own personal taxes, but managed to help dole out $350 billion in taxpayer money through TARP and is likely to be confirmed by the Senate today as the new Treasury Secretary.

If you get the sense today that someone is laughing at you behind your back, you'll be right. It's Geithner.

Oh yeah, here's the latest outrage.

Merrill Lynch lost $15 billion in the fourth quarter of 2008 and more than $27 billion for the year. In October, Merrill received $10 billion in bailout money. But the problems were so deep that Merrill CEO John Thain(surprise a former Goldman man) sold the company to Bank of America. The actual sale to B of A was a shrewd move by Thain. It does, however make B of A look like it is run by a bunch of country bumpkins,taken advantage of by a New York slickster. We indicated as much at the time, when we wrote:

Has Bank of America Chairman Ken Lewis come to his senses? Has the ether Merrill Chairman John Thain slipped Lewis during his sales pitch to get Lewis to buy Merrill, at a premium to the market price in the middle of a crisis, worn off?
Closing date on the B of A takeover: January 1, 2009.

Employee bonuses at Merrill are normally paid out in January. Since Merrill had lost $27 billion in 2008, it is likely that Bank of America would have looked good and hard before passing out those bonuses. Thain found away around the bonus payout problem, he paid out the bonuses in December, when he was still in full control of the company. Reports indicate the bonuses amounted to between $3 billion and $4 billion.

To recap:

Merrill loses $27 billion.

Treasury gives Merrill $10 billion in bailout money.

Merrill uses the money to payout $3 to $4 billion in bonuses.

Oh yeah, Thain also spends $1.2 million refurbishing his office.

Bottom line: Wall Street has always run circles around the American taxpayer, but the Paulson-Geithner era has brought in such disrespect for the taxpayer that not even Shakespeare would have thought of penning such an open and brazen tragedy.

Middle America better wake up, and with Obama bringing "change" like Geithner into the Treasury, Barack ain't the directon from where they should be looking for change. America is burning.

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