Monday, November 03, 2008

Paulson's Swindle Revealed

Paulson and his banker buddies loot the public treasury... in broad daylight

Eye opening article from Thursday's edition of The Nation:

Paulson's Swindle Revealed
By William Greider

October 29, 2008

The swindle of American taxpayers is proceeding more or less in broad daylight, as the unwitting voters are preoccupied with the national election. Treasury Secretary Hank Paulson agreed to invest $125 billion in the nine largest banks, including $10 billion for Goldman Sachs, his old firm. But, if you look more closely at Paulson's transaction, the taxpayers were taken for a ride--a very expensive ride. They paid $125 billion for bank stock that a private investor could purchase for $62.5 billion. That means half of the public's money was a straight-out gift to Wall Street, for which taxpayers got nothing in return.


These are dynamite facts that demand immediate action to halt the bailout deal and correct its giveaway terms. Stop payment on the Treasury checks before the bankers can cash them. Open an immediate Congressional investigation into how Paulson and his staff determined such a sweetheart deal for leading players in the financial sector and for their own former employer. Paulson's bailout staff is heavily populated with Goldman Sachs veterans and individuals from other Wall Street firms. Yet we do not know whether these financiers have fully divested their own Wall Street holdings. Were they perhaps enriching themselves as they engineered this generous distribution of public wealth to embattled private banks and their shareholders?

Leo W. Gerard, president of the United Steelworkers, raised these explosive questions in a stinging letter sent to Paulson this week. The union did what any private investor would do. Its finance experts vetted the terms of the bailout investment and calculated the real value of what Treasury bought with the public's money. In the case of Goldman Sachs, the analysis could conveniently rely on a comparable sale twenty days earlier. Billionaire Warren Buffett invested $5 billion in Goldman Sachs and bought the same types of securities--preferred stock and warrants to purchase common stock in the future. Only Buffett's preferred shares pay a 10 percent dividend, while the public gets only 5 percent. Dollar for dollar, Buffett "received at least seven and perhaps up to 14 times more warrants than Treasury did and his warrants have more favorable terms," Gerard pointed out. [...].


Read the the full article and weep, fellow U.S. taxpayers.

Gotta hand it to Paulson and his banker buddies though... for their sheer audacity. It takes considerable moxie to shamelessly loot the public treasury... in broad daylight.

6 comments:

Curmudgeon said...

This cannot be true. Why, I remember clearly how Republicans assured us that with George W. Bush, our first CEO President, we'd be getting real world business management in the White House for the first time. Surely our CEO President wouldn't permit the public to be fleeced like this on his watch. The story must be wrong....

oldtimer said...

You have your head in the sand if you think this story is wrong.

RudiZink said...

From an email sent by one of our gentle readers. Not exactly on point, but still pretty funny:

"Subject: The Government
Back in 1990, the Government seized the Mustang Ranch brothel in Nevada for tax evasion and, as required by law, tried to run it.
They failed and it closed.
Now, we are trusting the economy of our country and 700 Billion Dollars to a pack of nit-wits who couldn't make money running a whore house and selling booze.
Now if that don't make you nervous what does ? ? ?"

Curmudgeon said...

Oldtimer:
My post was tongue-in-cheek.

ozboy said...

Rudi

I bet that good ole Bill Clinton coulda kept that cat house runnin! Hells Bells man he wouldn't even a had to have any outside customers!!

Viktor said...

Rudi

Tell me it ain't so pal, tell me you're only kidding and the Mustang Ranch hasn't closed down!

So many fond memories, so many fun times, tell me it ain't true. Why I even met my third ex wife there! My life and hopes for the future will be dashed if this dreadful news is true. Please, tell me it ain't so Rudi, Please.

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