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Showing posts with label thugishgovernment. Show all posts
Showing posts with label thugishgovernment. Show all posts
More on Obama as Thug: Why campaign donations should be anonymous

More on Obama as Thug: Why campaign donations should be anonymous

Would Obama have attacked these people if they had given to him?  Obviously, not.  From Kim Strassel at the WSJ:

This past week, one of his campaign websites posted an item entitled "Behind the curtain: A brief history of Romney's donors." In the post, the Obama campaign named and shamed eight private citizens who had donated to his opponent. Describing the givers as all having "less-than-reputable records," the post went on to make the extraordinary accusations that "quite a few" have also been "on the wrong side of the law" and profiting at "the expense of so many Americans."
These are people like Paul Schorr and Sam and Jeffrey Fox, investors who the site outed for the crime of having "outsourced" jobs. T. Martin Fiorentino is scored for his work for a firm that forecloses on homes. Louis Bacon (a hedge-fund manager), Kent Burton (a "lobbyist") and Thomas O'Malley (an energy CEO) stand accused of profiting from oil. Frank VanderSloot, the CEO of a home-products firm, is slimed as a "bitter foe of the gay rights movement."
These are wealthy individuals, to be sure, but private citizens nonetheless. Not one holds elected office. Not one is a criminal. Not one has the barest fraction of the position or the power of the U.S. leader who is publicly assaulting them. . . .
The real crime of the men, as the website tacitly acknowledges, is that they have given money to Mr. Romney. This fundraiser of a president has shown an acute appreciation for the power of money to win elections, and a cutthroat approach to intimidating those who might give to his opponents. . . .

Will there be a backlash for protests outside "tycoons'" homes?

You might remember Nina Easton reporting on this gruesome experience.



Now we have this. Will people get upset with these thuggish tactics?

Protesters from the Occupy Wall Street movement plan to leave their downtown Manhattan headquarters Tuesday and head uptown as part of a "Millionaires March" visiting the homes of some of New York City's wealthiest residents.
Between 400 and 800 people are expected to take part in the demonstration targeting the homes of JP Morgan Chase CEO Jamie Dimon, billionaire businessman David Koch, financier Howard Milstein, hedge fund maven John Paulson and News Corp. Chairman and CEO Rupert Murdoch, Crain's New York Business reported. . . .
How FEDS pressured Bank of America to buy Merrill Lynch

How FEDS pressured Bank of America to buy Merrill Lynch

This hearing should be enlightening:

Bank of America CEO Ken Lewis heads to Capitol Hill on Thursday, and he's likely to be grilled by lawmakers about the government's role in ensuring that the bank complete its controversial merger with Merrill Lynch.

According to emails released Wednesday that pull back the curtain on heated negotiations, Federal Reserve Chairman Ben Bernanke had suggested to another Fed official that "management is gone," if BofA managers tried to flee the deal and later on needed further government assistance. . . . .

He is expected to be asked specifically about whether the Federal Reserve and other government officials pressured Bank of America (BAC, Fortune 500) into completing the merger even after BofA realized how badly Merrill Lynch's fourth-quarter losses would be. . . . .

Lewis told investigators in the New York Attorney General's office earlier this year that he felt his job was on the line if he didn't go through with the deal. Once Lewis learned last December of Merrill Lynch's deterioration, he told then Treasury Secretary Henry Paulson that BofA was considering backing out of the deal, according to his testimony to investigators.

Paulson said that Lewis and the BofA board would be replaced if they sought to end the merger, which Paulson viewed as integral to the health of the U.S. financial system. Paulson told New York investigators that he threatened Lewis' job at the behest of Fed chief Ben Bernanke.

According to a Dec. 21 email released Wednesday, Bernanke called BofA's threat to pull out of the deal a "bargaining chip," saying "we do not see it as a very likely scenario."

In another email, Federal Reserve Bank of Richmond President Jeffrey Lacker said that Bernanke considered Bank of America's threat to pull out "irrelevant" and "not credible."

Lacker added that Bernanke "also intends to make clear that if they play that card and they need assistance, management is gone," Lacker wrote. BofA is based in Charlotte, N.C., which is in Lacker's district. . . . .
Newest piece at Fox News: "Thugs In the White House"

Newest piece at Fox News: "Thugs In the White House"

My piece starts off this way and can be found here:

So much for any hope that the government would uphold rules and abiding by contracts. Instead, we keep getting examples of something else – that when President Obama fails to persuade firms to follow his wishes, he does not hesitate to use threats of financial destruction.

Cliff Asness, the co-founder of the $20 billion hedge fund AQR Capital Management, laid bare the latest attacks with an open letter on Wednesday:

“The President screaming that the hedge funds are looking for an unjustified taxpayer-funded bailout is the big lie writ large. Find me a hedge fund that has been bailed out. Find me a hedge fund, even a failed one, that has asked for one. In fact, it was only because hedge funds have not taken government funds that they could stand up to this bullying. The TARP recipients had no choice but to go along.”


This is just the latest in a string of intimidating tactics starting with threatening costly public audits to get compliance. Then there were the threats of firing CEOs who had the audacity to oppose government plans. The very latest is threats to use “ the full force of the White House press corps [to] destroy [the firm Perella Weinberg's] reputation” if it resisted the government stealing their money, according to Thomas Lauria who represented the firm up until last week. ABC News’s Jake Tapper reports that Mr. Steven Rattner, the head of the auto task force, made the threat. . . . .


See a related piece by James Glassman at Forbes here.
More on Thuggish Government behavior on bailouts

More on Thuggish Government behavior on bailouts

Hedge funds strike back on Obama's attacks.

Cliff Asness, whose firm manages some $20 billion of assets, has written an open letter blasting President Obama for his attack on the hedge fund industry in the wake of the Chrysler bankruptcy.

As you'll recall, hedge funds, which hold approximately $1 billion in Chrysler bonds, refused the government's offer to take approximately thirty cents on the dollar. Obama accused hedge funds of holding out "for the prospect of an unjustified taxpayer-funded bailout."

These comments have enraged many in the industry but few have spoken out publicly. Asness, whose firm doesn't hold Chrysler bonds, says the industry is genuinely afraid in the face of Obama's power. Stating that he himself is "fearful writing this," Asness still pulls no punches:

"Let’s be clear, it is the job and obligation of all investment managers, including hedge fund managers, to get their clients the most return they can. They are allowed to be charitable with their own money, and many are spectacularly so, but if they give away their clients’ money to share in the “sacrifice”, they are stealing."
"The President screaming that the hedge funds are looking for an unjustified taxpayer-funded bailout is the big lie writ large. Find me a hedge fund that has been bailed out. Find me a hedge fund, even a failed one, that has asked for one. In fact, it was only because hedge funds have not taken government funds that they could stand up to this bullying. The TARP recipients had no choice but to go along."
"The President's attempted diktat takes money from bondholders and gives it to a labor union that delivers money and votes for him. Why is he not calling on his party to "sacrifice" some campaign contributions, and votes, for the greater good? Shaking down lenders for the benefit of political donors is recycled corruption and abuse of power."
More abusive actions by the government

More abusive actions by the government

The list of abuses from government coercion is getting too long to keep track of. Here is another example from Jake Tapper at ABC News.

White House Denies Charge By Attorney that Administration Threatened to Destroy Investment Firm's Reputation
May 02, 2009 3:17 PM

A leading bankruptcy attorney representing hedge funds and money managers told ABC News Saturday that Steve Rattner, the leader of the Obama administration's Auto Industry Task Force, threatened one of the firms, an investment bank, that if it continued to oppose the administration's Chrysler bankruptcy plan, the White House would use the White House press corps to destroy its reputation. . . . .

Perella Weinberg Partners, Lauria said, "was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under the threat that the full force of the White House press corps would destroy its reputation if it continued to fight. That’s how hard it is to stand on this side of the fence."

Perella Weinberg Partners, which owned Chrysler debt through its Xerion Fund, was one of Lauria's clients in this bankruptcy, but no longer is. Before the Thursday deadline, Joseph Perella and Peter Weinberg tried to join the larger creditors -- JP Morgan Chase, Citigroup, Morgan Stanley, and Goldman Sachs -- who are owed roughly 70% of Chrysler's debt and had already agreed to participate with the administration's plan.

All four financial institutions are recipients of up to $100 billion in federal government bailout funds, though the Obama administration insists the matters were kept completely separate. . . . .

President Obama singled out Lauria's clients for criticism when he announced the Chrysler plan on Thursday.

"While many stakeholders made sacrifices and worked constructively, I have to tell you some did not," the president said. "In particular, a group of investment firms and hedge funds decided to hold out for the prospect of an unjustified taxpayer-funded bailout. They were hoping that everybody else would make sacrifices, and they would have to make none."

Lauria said the president's assertion that his clients weren't willing to make any sacrifice is false. The clients were willing to take 50 cents on the dollar from Chrysler for their debt, he said. . . .


1) Well, the President appears to have carried out his threat at the press conference.
2) The large creditors that the government owns did what the government wanted, but the ones it doesn't own didn't. And there is no connection between these actions and government ownership? Dubious.
3) $27 billion loaned by both the government and creditors to GM, yet gov is supposed to get 50 percent and the creditors are to get 10 percent of the stock. It is then surprising that the non-government owned creditors are upset by the deal?

UPDATE: The Detroit News mentions the consequences for the companies that Obama criticized.

Creditors objecting to Chrysler LLC's efforts to speed the company's move through bankruptcy won a delay in a key hearing today, and a lawyer said some had received death threats.
The major proposal on tap for today was winning approval of the company's plan to establish bidding procedures -- in an effort to quickly allow the "good" assets of Chrysler to be auctioned off so the company can quickly emerge from bankruptcy. . . . .

A lawyer for the objecting creditors, Thomas Lauria, told Gonzales that some creditors had received death threats -- and those had been referred to the FBI and local police. Lauria wants court permission to keep the identities of some of those creditors secret. . . . .
The Nationalization of the US auto industry

The Nationalization of the US auto industry

Government ownership implies much less efficiency. It implies political decisions in running the company. Cutting out profitable larger cars to please the environmentalists should help Ford, but on the other hand I predict very large subsidies for a while to come. The WSJ has this:

Under the plan, GM is asking the Treasury Department for an additional $11.6 billion in loans, on top of the $15.4 billion it has already received. It envisions giving the government at least half ownership of the company as payment for half of the loans.

At the same time, GM said it would use stock instead of cash to pay off half the $20.4 billion it owes a United Auto Workers fund to cover retiree health care. That stock would leave the union owning about 39% of GM.

The upshot would be the transformation of a troubled American icon, leaving it in the hands of the government and its main union. The situation, fraught with complications and potential conflicts, comes on top of the U.S. government taking stakes in banks and insurer American International Group Inc.

Also Monday, the UAW and Chrysler LLC disclosed that the union would own 55% of that restructured car maker, while Fiat SpA would get 35% and the U.S. and lenders would own the rest. . . . . .


The Obama administration has shafted creditors to the benefit of unions.

The two parties that turned the Big Three into a perennially limping freak of unwritten industrial policy now will take formal ownership of their handiwork. The United Auto Workers (UAW) would own 39% of GM. The federal government would own 50%. The creditors will be shafted with just 10%. (In the Chrysler plan being discussed, labor would own 55%, making it effectively a subsidiary of the UAW.) . . . .

Lately some have doted, with wonderment and admiration, on the Obama administration's apparent willingness to drive a hard bargain with the UAW as it tries to impose a stage-managed replica of bankruptcy on GM and Chrysler. Please.

In a real bankruptcy, which is the natural fate of companies unable to meet their obligations, Chrysler and GM would be run (or liquidated) for the benefit of their creditors, not their workers. But, here, "pattern bargaining" will remain the law of the Detroit jungle. The UAW will continue to use its unnaturally augmented clout to extract uncompetitive pay and benefits (it can do no other given its internal incentives). As it has for 40 years, Washington will pitch in with one improvisation after another, disguised as energy policy, trade policy, health-care policy or environmental policy, to stop the rivets from popping off. Politics, especially Democratic electoral politics, will play a more dominant role than ever. . . . .


Look who agreed to losing this money.

The tentative debt-swap agreement by large lenders including J.P. Morgan Chase & Co. and Citigroup Inc. followed the auto maker's landmark accord that would give the United Auto Workers union control of 55 percent of the company.


Now Citi needs more money

WASHINGTON -- Citigroup Inc. may need to raise as much as $10 billion in new capital, according to people familiar with the matter, as the government continues negotiations with banks over the results of its so-called stress tests.

The bank, like many others, is negotiating with the Federal Reserve and may need less if regulators accept the bank's arguments about its financial health, these people said. In a best-case scenario, Citigroup could wind up having a roughly $500 million cushion above what the government is requiring. . . . .
More on government coercion to force banks into the financial troubles that some have been experiencing

More on government coercion to force banks into the financial troubles that some have been experiencing

All this is very disturbing. Barrons has this take on what happened:

According to Mr. Cuomo's dour narrative, the product of four hours of interrogation of Mr. Lewis, the merger with Merrill was proposed in September after two days of due diligence (sounds more like due negligence to us). It gained approval of shareholders of both companies on Dec. 5. Barely a week later comes the revelation: Merrill's losses were spiraling ever higher, causing an increasingly frantic Mr. Lewis to weigh calling the marriage off.

He reckoned he could legally do so thanks to MAC (material adverse event), recognizing that $7 billion more in losses than had been projected when the merger was agreed to was a very big MAC, indeed. He diffidently informed the powers-that-were of his plan to nix the nuptials and was summarily summoned to powwow with them in Washington that very evening. And it was there that Messrs. Bernanke and Paulson put the screws to him to not break the deal lest he trigger a systemic calamity.

On Dec. 21, Mr. Lewis, still of a mind to ditch the merger, communicated his determination to Mr. Paulson, who bluntly warned that he would give the boot to Mr. Lewis and his board unless the acquisition went through. To that bald threat, Mr. Lewis' retort was a resounding purr: "That makes it simple. Let's de-escalate." . . . .


The WSJ has a nice piece summarizing things here.


Martin Weiss has this note:

Last December, with its stock hovering around $15 per share, Bank of America CEO Ken Lewis made a startling discovery: Merrill Lynch — the giant his bank was in the process of acquiring — was in far worse shape than he had dreamed.

This week, thanks to documents released by New York Attorney General Andrew Cuomo, we discovered new details on what appears to be the real reasonLewis finalized the merger despite Merrill's obvious troubles.

According to Lewis, he had told former Treasury Secretary Paulson and Fed Chairman Bernanke that he wanted to back out of the merger with Merrill. Whether he had the legal ability to do so or not is a separate issue. What matters is that, according to Lewis, Paulson and Bernanke tacitly threatened to fire him and his entire board of directors if they backed out.

Now Lewis has testified that Paulson made it quite clear he was NOT to disclose to his shareholders how troubled Merrill was for fear that they would demand the merger be canceled.

Bottom line: When faced with the choice of saving his own job or saving his shareholders, Lewis decided to keep his mouth shut, go ahead with the merger and save his job.

He had a gun pointed to his head, the classic case of a shotgun merger; and the rest is history...

In January, Bank of America reported a $2.4 billion fourth-quarter loss and Merrill disclosed a $15 billion loss.

Also in January, Washington gave Bank of America $20 billion of your money to offset losses it suffered because of its shotgun marriage with Merrill.

And as of Friday's close, the decision made by Paulson, Bernanke and Lewis has cost shareholders as much as 43 percent of their money in just over four months, even AFTER a vigorous rally. . . .


Thanks to Jack Anderson for the Weiss link.



The Financial Times has this.

UPDATE: And the losses keep coming.

Bank of America Corp. (BAC) (BAC) and Citigroup Inc. (C) (C), which have each received $45 billion in government bailout funds, have been told by regulators that "stress test" results show they may need to raise additional capital, The Wall Street Journal said Tuesday.
First GM's CEO and Board of Directors are replaced with Obama followers, and now this might be happening for banks

First GM's CEO and Board of Directors are replaced with Obama followers, and now this might be happening for banks

This is a depressing story.

A congressional panel overseeing the U.S. financial rescue suggested that getting rid of top executives and liquidating problem banks may be a better way to solve the economic crisis.

The Congressional Oversight Panel, in a report released yesterday, also said the Treasury may be relying on too rosy an economic scenario to guide its $700 billion bailout, and declared that the success of the program after six months is “mixed.” Three of the group’s members disagreed with at least some of the findings.

“All successful efforts to address bank crises have involved the combination of moving aside failed management and getting control of the process of valuing bank balance sheets,” the panel, headed by Harvard Law School Professor Elizabeth Warren, said in its report.

Treasury Secretary Timothy Geithner has revamped the Troubled Asset Relief Program to focus on injecting capital into banks and removing up to $1 trillion in illiquid securities from their balance sheets via public-private investment partnerships. The government is also working to unfreeze credit markets through a Federal Reserve program that provides loans to investors in some asset-backed securities. . . . .
And who do you think is fanning the flames for the pitchforks?

And who do you think is fanning the flames for the pitchforks?

Politico has this amazing hubris from Obama.

The bankers struggled to make themselves clear to the president of the United States.

Arrayed around a long mahogany table in the White House state dining room last week, the CEOs of the most powerful financial institutions in the world offered several explanations for paying high salaries to their employees — and, by extension, to themselves.

“These are complicated companies,” one CEO said. Offered another: “We’re competing for talent on an international market.”

But President Barack Obama wasn’t in a mood to hear them out. He stopped the conversation and offered a blunt reminder of the public’s reaction to such explanations. “Be careful how you make those statements, gentlemen. The public isn’t buying that.”

“My administration,” the president added, “is the only thing between you and the pitchforks.” . . .


Of course, the Obama people think some high salaries are OK.

Lawrence Summers, a top economic adviser to U.S. President Barack Obama, was paid about $5.2 million in compensation by hedge fund D.E. Shaw during the past year, according to financial disclosure forms released on Friday by the White House. . . .


The New York Times reports that Summers worked a grand total of one day a week for $5.2 million.

The Washington Post points out that Obama's economic advisors were paid handsomely WHILE they were advising Obama.

Some of President Obama's top economic advisers were paid, in some cases handsomely, for their commentaries in 2008 about tax policy, government bailouts of financial institutions, global trade and the economic recession, according to financial disclosure forms made public by the White House late Friday. . . .

Summers did not join the Obama team in an official capacity until after the November election, but he was an influential adviser to the candidate during the campaign as the economic collapse moved to the forefront . . . . .


Judge Andrew Napolitano has a very disturbing report here:

The FDIC — with Treasury backing — threatened to conduct public audits of his bank unless his board created and issued a class of stock for the Feds to buy. The audit, which he is confident his bank would survive, would cost it millions in employee time, bad press, and consequent lost business. . . . .


Now Obama refuses to let the banks repay the money that they were forced to take:

I must be naive. I really thought the administration would welcome the return of bank bailout money. Some $340 million in TARP cash flowed back this week from four small banks in Louisiana, New York, Indiana and California. This isn't much when we routinely talk in trillions, but clearly that money has not been wasted or otherwise sunk down Wall Street's black hole. So why no cheering as the cash comes back?

My answer: The government wants to control the banks, just as it now controls GM and Chrysler, and will surely control the health industry in the not-too-distant future. Keeping them TARP-stuffed is the key to control. And for this intensely political president, mere influence is not enough. The White House wants to tell 'em what to do. Control. Direct. Command. . . . .


Of course, Geithner is talking about the ability to fire bank executives.

Treasury Secretary Timothy Geithner said he’s prepared to oust executives and directors at banks that require “exceptional” assistance from the U.S. government.

“If in the future, banks need exceptional assistance in order to get through this, then we will make sure that assistance comes,” while ensuring taxpayers are protected, Geithner said yesterday in an interview on the CBS “Face the Nation” program. “Where that requires a change in management and the board, then we will do that.”

Geithner noted that American International Group Inc., Fannie Mae and Freddie Mac had their chief executives removed after it became clear the companies couldn’t survive without government rescues. The Treasury is reviewing how much capital the biggest U.S. financial companies need in order to endure a severe economic downturn.

“Where we’ve had to do exceptional things,” the government has replaced management and boards, Geithner said. . . . .
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