Obama's Redistribution to Wealthy Bankers...

[WhiskeyGirl]

$700 Billion? Ha! The Real Costs of the Bailouts Are Much Higher

Sure, the $700 billion plus TARP bailout was a massive bait-and-switch.

The government said it was doing it to soak up toxic assets, and then switched to saying it was needed to free up lending. It didn't do that either. Indeed, the Fed doesn't want the banks to lend.

Sure, economist Dean Baker said the true purpose of TARP was " a massive redistribution of wealth to the bank shareholders and their top executives":

Mr. Geithner wants to use taxpayer dollars to keep bankrupt banks in business. In effect, he wants to tax teachers, fire fighters, and Joe the Plumber to protect the wealth of the banks' shareholders and to pay high salaries to their top executives.

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The point of buying the bad assets is to pay too much, so that the banks can get enough money to stay solvent.

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It would be nice if the [Washington] Post and the rest of the media would report honestly on the bank bailout and stop trying to conceal plans for a massive redistribution of wealth to the bank shareholders and their top executives.

But the TARP bailout is peanuts compared to the numerous other bailouts the government has given to the giant banks.

And I'm not referring to the $23 trillion in bailouts, loans guarantees and other known shenanigans that the special inspector general for the TARP program mentions. I'm talking about more covert bailouts.

As Bloomberg notes:

    “The trading profits of the Street is just another way of measuring the subsidy the Fed is giving to the banks,” said Christopher Whalen, managing director of Torrance, California-based Institutional Risk Analytics. “It’s a transfer from savers to banks.”

    The trading results, which helped the banks report higher quarterly profit than analysts estimated even as unemployment stagnated at a 27-year high, came with a big assist from the Federal Reserve. The U.S. central bank helped lenders by holding short-term borrowing costs near zero, giving them a chance to profit by carrying even 10-year government notes that yielded an average of 3.70 percent last quarter.

    The gap between short-term interest rates, such as what banks may pay to borrow in interbank markets or on savings accounts, and longer-term rates, known as the yield curve, has been at record levels. The difference between yields on 2- and 10-year Treasuries yesterday touched 2.71 percentage points, near the all-time high of 2.94 percentage points set Feb. 18.

more here - http://beforeitsnews.com/news/43/701/700_Billion_Ha_The_Real_Costs_of_the_Bailouts_Are_Much_Higher.html