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Bailout Bonds for Ordinary Americans?

By Linda Anselmi on April 9, 2009 at 6:50 PM in Bank Bailouts, Current Affairs, Economy

everybody-every-payday-10 Just in case you were feeling a little left out of all the bailout funds going around, not to worry. Our government has not forgotten about ordinary Americans.

The Obama administration has actually been working overtime to come up with ways for you and I to show our patriotic support for our economy and our government’s bailouts, of what is looking to be just about every industry in the US, by investing our last dollars along with our tax dollars in the people and institutions that brought us this mess.

According to The New York Times (registration required) the U.S. May Enlist Small Investors in Bank Bailout. Strange, I thought we had already invested trillions of our tax dollars. But, I guess they need more.

As part of its sweeping plan to purge banks of troublesome assets, the Obama administration is encouraging several large investment companies to create the financial-crisis equivalent of war bonds: bailout funds.

The idea is that these investments, akin to mutual funds that buy stocks and bonds, would give ordinary Americans a chance to profit from the bailouts that are being financed by their tax dollars. But there is another, deeply political motivation as well: to quiet accusations that all of these giant bailouts will benefit only Wall Street plutocrats.

-snip-

The funds, the thinking goes, would buy troubled mortgage securities from banks, enabling the lenders to make the loans that are needed to rekindle the economy. Many of the loans that back these securities were made during the subprime era. If all goes well, the funds will eventually sell the investments at a profit.

Yes, you will have the opportunity to share in the profits. Above our taxpayer invested profits, right? Of course that’s only if there actually are profits.

“This is an opportunity to forge an alliance between Main Street, Wall Street and K Street,” said Steven A. Baffico, an executive at BlackRock, referring to the Washington address of many lobbying firms. BlackRock, a giant money management firm, is playing a central role in the government’s efforts and is considering creating a bailout fund. “It’s giving the guy on Main Street an equal seat at the table next to the big guys,” he said.

So, we’ll get to sit at the table next to the big guys. But wasn’t that the illusion that lost us our 401k’s? Oh, well…

… If, as some analysts suspect, the banks’ assets are worth even less than believed, the funds’ investors could suffer significant losses.

Nonetheless, the administration and executives in the financial industry are pushing to establish the investment funds, in part to counter swelling hostility against the financial industry.

For the investment managers, the benefits are potentially large. These big firms can charge healthy fees to investors for taking part. They will also have the marketing prestige of being the firms the government turns to at a time of crisis to help sort out the country’s financial mess.

Okay. We buy bonds/funds. The government gets more money to play with. The Investment firms get money (fees) for helping the government get more money from ordinary Americans. And the financial industry (and others) gets more money to lose – along with a patriotic PR makeover to boot.

Yes. I can see, it really is a win-win-win.

And what was it again that we ordinary citizens get? Oh, yeah, that’s right, an opportunity to play and win with the big guys. Or lose again. Hmmm…

It’s just a thought, but personally, I’m thinking they should probably not call them “Bailout Bonds”. It could easily be confused with Bail Bonds. And that might lead people to associate them with someone actually going to jail for committing a crime.

http://noquarter foxyladi14

jail is a good place for a lot of these crooks
go directly to jail.do not pass go.do not collect 200.00..
socalannie

Sounds scam-ish. I’ll pass.
candymarl

There have been US Savings Bonds for oh, a long time. The poster(s) looks like something straight out of the FDR era.

However, US Savings Bonds were meant as an investment for the American people. I ain’t buying none of them unless they’re issued in my name and I make interest income, depending on how long I hold them, from them. That’s how the original US Bonds worked.

But I think they are counting on the young Obots not knowing that.
wodiej

Let the dipshit Obots buy them…we’ll see how well that goes over. I am not buying any. The banks and other places that are sinking should sink due to their corruption and greed. Bailing them out teaches them nothing.
oowawa

Gee Whiz, Sorry Mr. O, but I’m already flying my “Hoover Flags” (pants pockets turned inside out), and I reckon I don’t have a dime to invest in any “bailout bonds” right now. And by the way, bro, can you spare a dime? Think it’s time to rename these inside-out-pockets “Obama Flags” in your honor? But cheer up, from the way folks believed the lies that Wells Fargo told this morning to rally the stock market, the bankers really don’t need much more of our pocket change. They’re doing just fine with our tax gazillions, and they’ve already pretty much cleaned me out!
Ellen D

Speaking of scams – the accounting rules were changed so the banks can value their assets as they please. Now Wells Fargo is estimating a 3 billion dollar first quarter profit and everyone is surprised.
Are you surprised, LD?
FLDemFem

Isn’t that what the shareholders in those institutions already did? And how much are they getting back out of their investments? I would want to see some hard numbers on that, with affidavits to back them up before I even considered investing in an already failed institution, no matter who is backing it. And isn’t double-dipping frowned upon? It used to be.
oowawa

Right Ellen D. The change was in the “mark to market” rules that allowed them to value greatly devalued assets at the fantasy figures that they wish. It’s as if I were allowed to value my house at its value two years ago, and not by its value in today’s market. And then, after receiving taxpayer billions & being gifted with a ridiculous rule change, they have the chutzpah to puff out their chests and crow about how much money they made. And enough stupid “investors” (and conniving speculators) take that deception and run the Dow up 250 points.
oowawa

Yes Foxilady, that’s what should have happened, but instead they landed on “Free Parking” where billions of dollars had been stashed as a bonus. And, of course, they own big hotels on Illinois Ave and are on their way to monopolizing Park Place, Boardwalk, and the whole damned board . . .

Pretty soon we won’t even be able to rent a shack on Baltic or Mediterranean . . . And they want us to “invest” in “Bailout Bonds” for the wealthiest players, on top of all that!?!?
jangles

Let’s review. The banks have had an infusion of TARP and TALF to the tune of billions if not trillions and now they want to call on Jane and Joe Plumber not just for more of their tax dollars but now for their savings $$$$$.

Let’s see—my bank, B of A (Bankruptcy and Angst) is now raising its credit card fees for folks carrying a balance. It is at the public trough slurping up TARP and TALF at 0% interest and turning around to loan that out to Jane and Joe at 14-15%. Now I think that is a pretty good point spread. Perhaps that tells us how Wells Fargo managed a multi-billion profit in the first quarter. In act I think old B of A was one of the last to jump on this gravy train.

I am so happy to know that are bankers are not brain dead in the aftermath of their losing billions and trillions of $$$, almost bringing the world financial markets to their knees and causing enormous unemployment and dilocation all over the world. They still remember how to make a buck. We are so lucky that they have been saved and we did not let them lose there cushy arses.
KintheNorthwest

So who are the real pirates are they in Africa or here????
oowawa

Well gawrsh jangles, when you say it that way, it doesn’t sound like such a great idea anymore . . .
oowawa

Beware of the bankers on Wall Street–they’re a scurvy lot and will slit your gizzard for a piece of gold. Their pirate ship is taking on water fast, and all of us prisoners down below are expected to get working with the “bailout.”
wodiej

EXCUSE ME?? I work at Wells Fargo-why would they tell people they had a good quarter if they didn’t??

For your information, Wells Fargo didn’t need any fucking taxpayer dollars-they were pretty much forced to take them.

Second, they have given out millions more in mortgages than they ever received in Tarp funds.

Third, they have helped a hell of alot of people stay in their homes by refinancing, changing their loan terms etc. Which by the way was the essence of Tarp funds-some used it like they were supposed to, and others didnt.

Fourth, the taxpayers are going to get one hell of an interest payment on those tarp funds because of the business Wells Fargo has done.

So before you start slinging arrows around, make sure you know what you’re talking about. Obviously YOU DON’T.
Peggy Sue

So, let me get this straight. We [the American taxpayer] fund the program for the banks and related financiers [who played high risk games in Las Vegas] where they have nearly all their risks covered [$4 to our $96] to buy up the toxic [legacy] assets. If they lose their measly 4 bucks, we the American taxpayer will rush in and cover the loss. But then, the Government opens up the game to the American taxpayer [the suckers of the Universe] and if the bet goes bad we lose everything, but in the infintesimal chance that the bet is good, we win [I'm sure there's a catch to this, too. Probably with the increased tax liability].

Win, win, win?

More like bad, bad, bad.

Sorry, time to charge the Treasury with pitchforks in hand.
AX10

No Mr. Obama, this is not what we want.
We do not want to buy JUNK with our collective taxpayer dollar or our retirement funds.
These bad debts should be written off as losses then we can start over again. Either take the banks into temporary receivership to have the fed clean up their books or let the banks go to bankruptcy court like everyone else.
NoBamaNoWay

correct; they think that the “solution” to the collapse of our ponzi scheme economy is to get more people in on the bottom. when will they ever learn that there is no free lunch – at least not for everybody. the aristocracy may dine on our dime for a while, but eventually we will have no more dimes and their free lunch will end. and america will be F-ed.
Peggy Sue

You know your mention of Junk [bonds] reminded me of something I read earlier. Joseph Cassano, the architect of the credit-default swap fiasco at AIG [now hiding out on his estate in London] was a protege of Michael Milken, the King of Junk Bonds.

Is it just me or does this mess seem very incestuous, the crooks leading the crooks?

Cassano started out at Drexel Burnham Lambert, which imploded in 1990 under Milkin’s fine leadership. Meanwhile, Cassano in a new configuration of fraud, walked away with 315 million dollars for his efforts at AIG, while we, the taxpayers, footed a 170+ billion dollar company bailout under the “too big to fail” meme.

And they say crime doesn’t pay!
mountainaires

Amen, Peggy Sue! “Invest” in “Bailout Bonds?” You’ve got to be joking! It’s one scam after another with these people. Holder’s designing his own little feifdom at Justice, and the criminals are looting the treasury, while the FED is demanding that the banks “tick-a-lock” and keep their mouths shut about the “stress tests” they did on themselves, until after earnings are announced, so as to keep that market thingy all warm and fuzzy.

$4 Trillion dollars in the budget, and we’ve already promised $12.7 Trillion. I’m tapped out, and need to save my pennies for the higher taxes and inflation that is on the horizon.

No “bailout” bonds are in MY budget!

God, these people are ridiculous.
oowawa

Did the same “wodiej” write this comment that wrote the comment just above that said:

The banks and other places that are sinking should sink due to their corruption and greed. Bailing them out teaches them nothing.

Something doesn’t seem quite right. And as for Wells Fargo (who was “forced” to gobble up those taxpayer dollars), consider this:

http://market-ticker.denninger.net/archives/948-JamJob-Wells-Fargo-And-More.html

I could provide more links, but what’s the point?