Geithner Wants The Power

Treasury Secretary Geithner is asking Congress for more authority to oversee financial institutions such as, or specifically, A.I.G. The question though, is will he use that power for the common good or the "market's" good?

U.S. Gov't To Back $306 Billion Citigroup Mistakes

Late this evening (or morning now) the deal reached between the government and Citigroup became official. Rumors had been swirling all weekend, but now we find out just how far our government is willing to go to save the banks built too big to fail.

From Bloomberg News:

Nov. 23 (Bloomberg) -- The U.S. government agreed to protect $306 billion of loans and securities on Citigroup Inc.‘s books against losses, as it seeks to shore up investor confidence in the bank.

Citigroup will, as a fee for the guarantee, provide preferred shares to the Treasury and Federal Deposit Insurance Corp., the regulators said in a statement. The government will also inject $20 billion into the bank from the Treasury’s $700 billion Troubled Asset Relief Program.

Of course conservatives are trying to drag out a fight to save millions of autoworkers jobs for $25 billion, but hardly a peep is heard for $306 billion in guarantees for loans and securities. Oh and a mere $20 billion of straight cash that virtually doubles the current market value of Citigroup, pegged at $20.5 billion at the end of last week. I hope this helps them save some of those 52,000 layoffs from going through, but I doubt it goes to doing good for the workers who have been punished for the executives' greed. People like Charles Prince should go to jail for their recklessness and stripped of the wealth made from the risky deals that brought misery to us all.

$700 Billion: "We just wanted to choose a really large number"

If you didn't catch George Bush's address to the nation, don't worry, there wasn't much to miss. Basically he said that too many people screwed up on their mortgages, causing his buddies to lose out on mortgage securities. So if we don't give them money to get rid of the bad securities, the economy will go from here to the 7th ring of hell. One thing George forgot to mention were the facts of how this whole thing was going to work and he didn't answer something on the minds of many, why $700 billion?

Well a Treasury spokeswoman did that for him:

In fact, some of the most basic details, including the $700 billion figure Treasury would use to buy up bad debt, are fuzzy.

"It's not based on any particular data point," a Treasury spokeswoman told Forbes.com Tuesday. "We just wanted to choose a really large number."

Wow. If it wants to see a bailout bill passed soon, the administration's going to have to come up with some hard answers to hard questions. Public support for it already seems to be waning. According to a Rasmussen Reports poll released Tuesday, 44% of those surveyed oppose the administration's plan, up from 37% Monday.

Hmm, I don't know about you, but that doesn't give me much confidence. In fact, nothing the Administration is doing right now gives me anything but the chills. Giant giveaways to the rich aren't going to solve anything. If there is any money going to fix this, it should be directed at homeowners.

One thing in particular pissed me off last night about that speech. Bush talked about loving the free market and if it screws up then let business pay the price, but if it screws up really bad, then we have to save it. No wait, that wasn't the worst of it. Oh yeah, I remember now. He said that the democratic capitalist society is still the greatest thing out there. Well Mr. Bush, this isn't democratic capitalism, its socialist corporatism.