Lousy

In case you missed this. I think this all went down last week, but it has returned on the heels of the Congressional cheering fest last night.

Tuesday, February 17, 2009

U.S. Bank CEO: TARP program is ‘lousy’

The Business Review (Albany) - by Jennifer Niemela For The Business Review

• Top St. Louis financiers
• Triad banks making plans for TARP as lending slows
• Wachovia Securities gets new name in May
• Sunrise Community Banks buying EastBank
• U.S. Bank CEO: TARP program is ‘lousy’

While government leaders were well-intentioned in setting up the Troubled Asset Relief Program, it’s a “lousy program,” You can watch up to ten companies at a time.

">U.S. Bancorp CEO Richard Davis said at a business leaders forum today.

The U.S. Treasury told, not asked, U.S. Bank to participate in the program, which is a Darwinian attempt to “synthesize” weaker banks into stronger banks through consolidation, Davis said at the forum, held in Minneapolis. U.S. Bank (NYSE: USB) sold $6.6 billion in preferred stock with warrants to the U.S. Treasury in November through its capital purchase program.

“There’s no A, R or P in TARP,” Davis said, adding that “troubled” is the only word in the phrase that’s accurate. “The ‘asset relief program’ has yet to occur.”

The problems with the You can watch up to ten companies at a time.

">U.S. Treasury Department’s program are that its goals and rules have changed since its inception last fall, it’s poorly defined and it’s caused collateral damage to healthy banks.

A number of banks with a presence in the Albany, N.Y., area are participating in TARP, including: First Niagara, KeyBank, Bank of America and Berkshire Bank.

So, the Federal government, using its brute force again as it did in forcing bad loans, forced U.S. Bancorp to sell it $6.6 Billion in preferred stock with warrants. This part of the plan of not taking over the banks, I suppose.

Anyway, it is hard to lose money when you can force someone to sell you stock with warrants, but while this crypto nationalization is happening, the feds are also preparing for a high rate of inflation so that it can pay down its (our) debts with watered down money.

So, Bancorp says, "OK, sure," knowing, I assume, the stock will be redeemed at a lower price, i.e. cheaper dollars, resulting in a loss that we have to make up.

However, if the takeover plan is serious, there is no buy out provision, in which the government will do great, getting good shares pre-inflation. When the price is up they can redeem the warrants and, presto, have a bank. People will cheer at the great profit the government extracted.

If a private person did this, it would be criminal extortion, but the government and all its employees seem above the law and common sense. You see, its all part of regulation, that apparently we don't have.

If the latter scenario is in play, then the large banks will become small or go out of business, no matter how the federal government tries to keep them afloat, so they can control them. I think this is called killing the goose.

So, if anyone has no life and finds out if there is no buyback provision, let me know. NB - the problem is, according to Davis, the plan has changed since the Bush administration put it in place.

Anyway, none of this matters as things are rosy, except for the depression.