(2011-10-25) Taibbi Bank Bailout List

In response to some people accusing the Occupy Wall Street protesters of rich-envy, Matt Taibbi lists Bail-Out-s and other sweet deals the banks get. We have a massive police force in America that outside of lower Manhattan prosecutes crime and imprisons citizens with record-setting, factory-level efficiency, eclipsing the incarceration rates of most of history's more notorious police states and communist countries. But the bankers on Wall Street don't live in that heavily-policed country. There are maybe 1000 SEC agents policing that sector of the economy, plus a handful of FBI agents. There are nearly that many police officers stationed around the polite crowd at Zucotti park.

Nov28 update: Bloomberg News is continuing with the tankless task of pushing forward with FOIA requests relative to the Fed’s lending programs, and once it eventually gets its troves of documents, having to slog through them to see what they reveal. Bloomberg has a long article up on its site about its latest findings. And the bottom line is everybody close to the process lied like crazy.

Jan'2013: Taibbi's got another piece. We were told that the taxpayer was stepping in – only temporarily, mind you – to prop up the economy and save the world from financial catastrophe. What we actually ended up doing was the exact opposite: committing American taxpayers to permanent, blind support of an ungovernable, unregulatable, hyperconcentrated new financial system that exacerbates the greed and inequality that caused the crash, and forces Wall Street banks like Goldman Sachs and Citigroup to increase risk rather than reduce it. The result is one of those deals where one wrong decision early on blossoms into a lush nightmare of unintended consequences (Side Effect)... But the most appalling part is the lying... Officials like Geithner and Paulson seemed to genuinely believe that the market's fears about corruption in the banking system was a bigger problem than the corruption itself... In 2009, just after the first round of Stress Test-s was released, it came out that the Fed had allowed banks to literally rejigger the numbers to make their bottom lines look better... The bailout ended up being much bigger than anyone expected, expanded far beyond TARP to include more obscure (and in some cases far larger) programs with names like TALF, TAF, PPIP and TLGP. What's more, some parts of the bailout were designed to extend far into the future. Companies like AIG, GM and Citigroup, for instance, were given tens of billions of deferred tax assets – allowing them to carry losses from 2008 forward to offset future profits and keep future tax bills down. Official estimates of the bailout's costs do not include such ongoing giveaways. "This is stuff that's never going to appear on any report," says Barofsky... Lenders were (in 2Q2009) about a half a point more willing to lend to a bank with implied government backing – even a proven-stupid bank – than they were to lend to companies who "must borrow based on their own credit worthiness." The economists estimated that the lending gap amounted to an annual subsidy of $34 billion a year to the nation's 18 biggest (Too Big To Fail) banks. Today the borrowing advantage of a big bank remains almost exactly what it was three years ago – about 50 basis points, or half a percent.