Thursday, February 05, 2009

You Knew This Was Coming

Headline - - Watchdog: Treasury overpaid for bank stocks

The AP story at begins:

The federal government overpaid for stocks and other assets in attempting to help financial institutions last year, a government watchdog said Thursday, taking further issue with the beleaguered $700 billion rescue program.

Elizabeth Warren, chairwoman of the Congressional Oversight Panel for the bailout funds, told the Senate Banking Committee on Thursday that Treasury in 2008 paid $254 billion and received assets worth about $176 billion.

The figures were reached by extrapolating the results of a study of 10 government transactions, comparing the price paid by Treasury and the value of the asset at the time of purchase. Warren did not present details of the transactions the panel analyzed. A full report will be released Friday. . . .

Referring to overpayment on assets, Warren said Treasury has failed to specify its goals and methods in helping more than 300 institutions.

"There may be good policy reasons for overpaying, but without a clearly delineated reason we can't know that," Warren said.

Senate Banking chairman Christopher Dodd, D-Conn., said the overpayment was sure to "raise eyebrows."

"I can understand some gap," he said. "No one is expecting perfection between the price you pay and what you think you're getting. But that's a pretty large disparity."

The entire AP story's here.


My comments:

$254 billion minus $176 billion equals $78 billion.

Sen. Dodd’s right: “that's a pretty large disparity."

It works out to about $260.00 for every man, woman and child in America; and more than $1, 000.00 for a family of four.

Why couldn’t the banks have been given $176 billion and the $78 billion gone directly to citizens?

Dodd, btw, still has not kept a promise he made more than 6 months ago to release his mortgage documents in connection with the sweetheart deal he got from Countrywide which he’s supposed to supervise.

President Obama wants the government to go further into debt by letting Dodd and his congressional cronies spend close to a trillion dollars.

Much of that money will be for “special projects (read “pork”)" sought by Dodd and other members of Congress.

Obama says such spending will “restore confidence in the economy.”

Message to President Obama: Convince your former Senate Democratic colleagues to expel Dodd from the Senate Democratic Caucus and strip him of his Banking Committee chairmanship.

Then persuade Dodd to resign now or face a Democratic primary fight in Connecticut next year when he’s up for reelection.

Doing that, Mr. President, will boost public confidence and won’t cost a cent.


Anonymous said...

read that he had press conference and had documents which he allowed a quick look at, but no copies.