The Church of Ineffable Stupidity’s ‘TARP’ Sermon

1843 – The first minstrel show in America, the Original Virginia Minstrels, opened at the Bowery Amphitheatre in New York City.

1956 – St. Patrick Center, the first circular school building in the United States, opened in Kankakee, IL. Only one major problem: teachers couldn’t tell students to “Go stand in the corner!” anymore, as there weren’t any.

 

COINCIDENCE? I think NOT!

 

"A great Industrial nation is controlled by its system of credit. Our system 

of credit is concentrated in the hands of a few men. We have come to be one 

of the worst ruled, one of the most completely controlled and dominated 

governments in the world – no longer a government of free opinion, no longer 

a government by conviction and vote of majority, but a government by the 

opinion and duress of small groups of dominant men.I am a most unhappy man. 

I have unwittingly ruined my country."

— President Woodrow Wilson, regretting his signing into law the Federal Reserve Act

 

FROM THE CHURCH OF INEFFABLE STUPIDITY, TODAY’S “TARP” SERMON

 

Due to a conspiracy led by Alan Greenspan, Robert Rubin, Chris Cox, and former senatwhore Phil Gramm, the US deregulated Wall Street. They claimed that our new financial engine would drive not only the country, but the world. They convinced Europe to follow, allowing it to share the same economic benefits we see across the globe.  Despite due diligence and many searches, I was unable to learn to which location those four thieves were aiming, but it has become clear that their intended path was off a proverbial cliff. 

 

And so, the scene was set, the curtain was  lifted, and all restraints were off. No more regulation, no SEC investigations, no federal regulators breathing down their necks. 

 

You have to hand it to our Wall Street Robber Barons. When they saw an open bank, they came equipped with wheelbarrows. Rather than engage in breaking and entering, they conspired to create an even better method of enriching themselves. If they could show a paper profit, they would reward themselves in kind. With paper.  Oblong, green paper. Many pieces of oblong, green paper. In fact, billions of them. 

 

Wall Street conspired to create the unregulated derivatives market, a gamble that relied on rising property values. The more properties that were sold, regardless of who bought it, the greater the values. The greater the values, the greater the profits when they traded the derivatives among themselves. With each “profit,” they ripped off a huge layer, called it a bonus, and vastly enriched themselves.  It did not matter that the original mortgages were high risk or almost worthless. It did not matter that with each sale, the “paper value” increased even more. All that mattered was that trades were made, over and over again, pushing up the values until the stated value of the derivatives market exceeded the net worth of the entire globe by a factor of five. 

 

With this incredible, unbelievable bubble, Wall Street’s Robber barons were little more than giant leaches, gorging themselves on the “paper value,” rewarding their own conspiracy with bonuses and payments that make your head spin:

 

Bear Stearns – $11.3 BILLION in employee bonuses. 

Lehman Bros – $21.6 BILLION in employee bonuses.

Merril Lynch  – $45.4 BILLION in employee bonuses. 

 

In some cases, the real values of the underlying mortgages was 10% of the stated value, or less. But so long as they played the derivative trading scam, along with insurance giants pretending to insure these trades, (see AIG) the “paper values” continued to balloon, as did their bonuses. 

 

Simply put, these thieves lied about the underlying value of their trades, profited from each trade, then removed substantial bonuses as their reward. When the market crashed, and the derivatives’ value came back to reality, the thieves kept their many billions. In some cases, the bonus program continued even AFTER the market crashed. 

 

CitiGroup paid its employees $34.4 BILLION in 2007, even though the whole company, with all its assets, investments, stock holdings, mortgage values, and more is now worth a mere $18 billion. They paid themselves more than twice the current value of their entire company! 

 

Banks used to be in the business of investing in society, making money for shareholders, customers, providing lines of credit and loans, and making reasonable profits for themselves.  Those days ended in the early 1990s. Since deregulation, and after the derivatives boom took off, it became little more than a scam, a confidence game, a way of sucking out billions in personal gain, based on fake “paper” values that had no relationship to the actual assets. 

 

That brings us to TARP, the biggest heist in the history of mankind. Because of it, they madoff with billions while Congress dithered and while our MSM slept. 

 

Even before TARP, the Gold Dust Twins, Ben Bernanke and Hank Paulson, had their dirty fingers deep inside the derivatives scam.  In March of 2008, JP Morgan  made known its desire to buy Bear Stearns for $236 million.  The Fed (Bernanke) eventually admitted that it was underwriting the deal for 240X that figure ($55 billion).  $29 billion of that loan was a “non-recourse loan” to JP Morgan, supported by Bear Stearns’ alleged assets. (Assets which were close to zero, making Bernanke’s loan support little more than a gift to JP Morgan executives.)

 

In 2004, Goldman Chaiman Hank Paulson got the SEC to remove investment houses from the “net capital rule,” the requirement that they hold reserve capital in appropriate ratios to their trading activities. Paulson personally argued that reserve requirements tied their hands and limited their profits. They wanted the right to leverage assets, in effect multiplying the impact of their investments. (We last did this in 1929.) He won.  

 

In 1999, Phil Gramm pushed through the Gramm-Leach-Bliley Act, which put the holding companies of brokerage houses outside of SEC oversight. (Not that SEC oversight matters, given its performance in the Madoff scandal) Then, investment banks managed to limit the SEC’s role to “voluntary” asset inspections.

 

Bless their inept souls, the SEC responded by creating an office to supervise brokerage houses. Because of Paulson’s pressure on SEC Chairman Chris Cox, even that minimal supervision was cancelled. 

 

By leveraging investments, an already strong housing bubble suddenly had billions, even trillions more plowed back in as new (now unsecured) transactions. That raised the “paper value” of the housing assets even higher, and increased the alleged profits (and bonuses) to Wall Street. Like any house of cards, a collapse was inevitable. 

 

Which leads us to 2008, and the emergency meeting between an uninformed (duh) Congress, George Bush, and the Gold Dust Twins, Hank and Ben. The twins threatened catastrophic losses, mayhem, and complete & utter market meltdowns. They warned of 7% unemployment (now at 7.5% in spite of TARP), of business  collapses due to no liquidity, and finally, that Wall Street might collapse. 

 

Unless. 

 

“Give us experts (Hank & Ben) $700,000,000,000 and no supervision, and we will save the country, if not the world.” 

 

Hmm. I wonder how that worked out. 

 

Merril Lunched on its TARP dollars by paying BILLIONS out in bonuses, in a year where it lost tens of billions. AIG continued its bonuses, rewarding the very crooks who created this mess. Chase, Citi and others continued bizniz as usual, including extraordinary salaries to the people. In other words, our taxpayer money did nothing except reward those greedy thieves who created the mess in the first place. And worst of all? TARP payments and their uses are secret, ie, we cannot learn what they did with our money. 

 

TARP was nothing more than a fraud. It permitted the executives whose greed, small mindedness, and conspiratorial lying and frauds to take one more huge bite of the apple. Since they had already decimated the housing bubble (a bubble they created, leverages, and personally profited from), the only place left was Uncle Sam. And that is the only way to describe TARP. The biggest bank robbery in history.