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Thread: Bank bailout: More money, more problems

  1. #1

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    Default Bank bailout: More money, more problems

    As the Obama administration moves to shore up the financial system, every possible solution raises another question.

    http://money.cnn.com/2009/01/30/news...ion=2009013003

    Interesting article on the pros and cons of possible solutions.

    CB
    “Most men and women will grow up to love their servitude and will never dream of revolution.” - Huxley’s Brave New World


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  3. #2

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    Default Re: Bank bailout: More money, more problems

    Interesting that now a Clinton economic advisor is saying this stimulus isn't the answer.

    http://finance.yahoo.com/news/A-3-Tr...-14208807.html
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    Default Re: Bank bailout: More money, more problems

    Quote Originally Posted by Frixxxx View Post
    Interesting that now a Clinton economic advisor is saying this stimulus isn't the answer.

    http://finance.yahoo.com/news/A-3-Tr...-14208807.html

    Yeah Frixxxx,

    I read that article also and saw that comment. I still believe that until the working publics 401K's, pension plans and house values are restored, no amount of stimulus is going to work, especially the type of stimulus that seems to be prevalent in the package. If it's going to cost more, Going green for example, it's just going to put a greater burden on a public that can't handle any further economic abuse.

    Folks are smarting from this economic beatdown and I really believe the market will come back on it's own accord when it and the public are ready. What worries me is the massive inflation we're going to get hit with in just a few years is going to hamstring any type of economic rebound, that'll be years making it up. And all this gov't interference, disguised as stimulus packages, are just going to slow down the rebound, because of the artificial influence all of the stimulii are having on the market.

    CB
    “Most men and women will grow up to love their servitude and will never dream of revolution.” - Huxley’s Brave New World

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  7. #4

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    Default Re: Bank bailout: More money, more problems

    AP Investigation: Banks sought foreign workers

    By FRANK BASS and RITA BEAMISH, Associated Press Writers Frank Bass And Rita Beamish, Associated Press Writers


    SANTA CLARA, Calif. – Banks collecting billions of dollars in federal bailout money sought government permission to bring thousands of foreign workers to the U.S. for high-paying jobs, according to an Associated Press review of visa applications.

    The dozen banks receiving the biggest rescue packages, totaling more than $150 billion, requested visas for more than 21,800 foreign workers over the past six years for positions that included senior vice presidents, corporate lawyers, junior investment analysts and human resources specialists. The average annual salary for those jobs was $90,721, nearly twice the median income for all American households.

    The figures are significant because they show that the bailed-out banks, being kept afloat with U.S. taxpayer money, actively sought to hire foreign workers instead of American workers. As the economic collapse worsened last year — with huge numbers of bank employees laid off — the numbers of visas sought by the dozen banks in AP's analysis increased by nearly one-third, from 3,258 in fiscal 2007 to 4,163 in fiscal 2008.

    The AP reviewed visa applications the banks filed with the Labor Department under the H-1B visa program, which allows temporary employment of foreign workers in specialized-skill and advanced-degree positions.

    It is unclear how many foreign workers the banks actually hired; the government does not release those details. The actual number is likely a fraction of the 21,800 foreign workers the banks sought to hire because the government limits the number of visas it grants to 85,000 each year among all U.S. employers.

    During the last three months of 2008, the largest banks that received taxpayer loans announced more than 100,000 layoffs. The number of foreign workers included among those laid off is unknown.

    Foreigners are attractive hires because companies have found ways to pay them less than American workers.


    Source: http://news.yahoo.com/s/ap/20090201/...oreign_workers

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  9. #5

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    Default Re: Bank bailout: More money, more problems

    Quote Originally Posted by James48843 View Post
    AP Investigation: Banks sought foreign workers

    By FRANK BASS and RITA BEAMISH, Associated Press Writers Frank Bass And Rita Beamish, Associated Press Writers


    SANTA CLARA, Calif. – Banks collecting billions of dollars in federal bailout money sought government permission to bring thousands of foreign workers to the U.S. for high-paying jobs, according to an Associated Press review of visa applications.

    The dozen banks receiving the biggest rescue packages, totaling more than $150 billion, requested visas for more than 21,800 foreign workers over the past six years for positions that included senior vice presidents, corporate lawyers, junior investment analysts and human resources specialists. The average annual salary for those jobs was $90,721, nearly twice the median income for all American households.

    The figures are significant because they show that the bailed-out banks, being kept afloat with U.S. taxpayer money, actively sought to hire foreign workers instead of American workers. As the economic collapse worsened last year — with huge numbers of bank employees laid off — the numbers of visas sought by the dozen banks in AP's analysis increased by nearly one-third, from 3,258 in fiscal 2007 to 4,163 in fiscal 2008.

    The AP reviewed visa applications the banks filed with the Labor Department under the H-1B visa program, which allows temporary employment of foreign workers in specialized-skill and advanced-degree positions.

    It is unclear how many foreign workers the banks actually hired; the government does not release those details. The actual number is likely a fraction of the 21,800 foreign workers the banks sought to hire because the government limits the number of visas it grants to 85,000 each year among all U.S. employers.

    During the last three months of 2008, the largest banks that received taxpayer loans announced more than 100,000 layoffs. The number of foreign workers included among those laid off is unknown.

    Foreigners are attractive hires because companies have found ways to pay them less than American workers.


    Source: http://news.yahoo.com/s/ap/20090201/...oreign_workers
    James,

    What a rip off of our tax dollars.

    I can also bet my bottom dollar, that whatever pittance is supplied for actual Infrastructure stimulus, those positions will also be filled by illegals, since the work will be hard and most Americans are soft, especially those that have been laid off the past few months.

    CB
    “Most men and women will grow up to love their servitude and will never dream of revolution.” - Huxley’s Brave New World

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    Default Re: Bank bailout: More money, more problems

    Oh, cmon, Banks! H1B's are for workers for jobs with skill sets that can't be filled in the U.S. What do they need? An engineer with a speciality in manufacture of DRAM semiconductors? A raw computer code programmer?

    Not at all, the article says:
    "....senior vice presidents, corporate lawyers, junior investment analysts and human resources specialists..."

    I have enough trouble with H1Bs with their provision for special skills. However, it appears there's nothing "special" in those job descriptions that can't be filled by U.S. workers. AND the provisions for H1Bs is they are supposed to be paid the same as U.S. workers with simiilar jobs, it is NOT supposed to be to hire cut rate labor. These jobs do not appear to even be close to qualifying. So the H1B laws are not the issue in this specific case unless the banks actually got the visas. There is no law against frivilous applications for H1Bs (too bad).

    Question I have is, were they actually able to *get* H1B's and for what jobs? If they got dissed, all they did was waste paper, and shame on the banks for applying.
    Last edited by Silverbird; 02-01-2009 at 10:48 AM.
    "All the prophets of Doom, Can always find room, In a world full of worry and fear..." - Protest Song, Monty Python

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  13. #7

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    Default Re: Bank bailout: More money, more problems

    We have skilled labor in this country for trades, and these people ARE losing their jobs right now. Infrastructure work is NOT unskilled work, and should be filled by certified and bonded workers. Infrastructure work is NOT for unskilled illegals who don't know how to mix cement. Please do not discount the trades!! The huge work gangs of the '30s don't exist anymore, we have heavy machinery to do that, and you need a skilled driver for that too.

    Any infrastructure work will need to require workers that are bonded and certified unless we want our bridges to fall down, tunnels to cave in, and people getting electrocuted. All government contracting is supposed to be subject to our labor and certification laws (Iraq and Afganistan unfortunately were exceptions because the work didn't take place in the U.S. and you heard what happened there - but even with those contracts the company is getting sued.)

    You can't just grab someone off the street to do a lot of these infrastructure jobs, you need at least a journeyman in most cases. So please do not discount infrastructure work as jobs for the unskilled! That is exactly what it should NOT be.
    Last edited by Silverbird; 02-01-2009 at 11:16 AM.
    "All the prophets of Doom, Can always find room, In a world full of worry and fear..." - Protest Song, Monty Python

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    Default Re: Bank bailout: More money, more problems

    As the little lady in the TV ad used to ask: "Where's the beef?"

    U.S.' Geithner urges strong medicine on G7 debut

    http://uk.reuters.com/article/busine...BrandChannel=0


    By David Lawder
    ROME (Reuters) - Timothy Geithner made his Group of Seven debut as U.S. Treasury Secretary on Saturday with a simple, straightforward message -- the United States is taking strong medicine to fix its economy and others should do the same.

    On the day after Congress approved a $787 billion (546 billion pound) economic stimulus package, he had lots to talk about, urging governments and central banks to maintain bold measures until recovery takes hold.
    His main mission was to explain to G7 colleagues that the United States was moving swiftly with its unprecedented spending package and a soon-to-be-detailed bank stabilization plan. He said G7 countries all realized the gravity of the situation.

    "Given the severity of the current economic and financial crisis, these actions must be forceful and sustained for a period that matches the likely duration of the crisis," Geithner said in his closing remarks.

    "There is little debate about the scale of the challenges people face, and we see it in Germany just in the last couple days," he told a news conference, referring to GDP data released on Friday.

    President Barack Obama's plan to rescue the U.S. banking sector fell flat when the initial outline was announced last week, driving stock markets lower and raising concerns about whether the new administration was up to the challenge.

    The Treasury Secretary gave little of the further details economists say are needed to convince investors on the plan.

    But off the record, a senior treasury official said it had been aware that the plan had been vulnerable to a negative market reaction but decided to proceed in aid of getting the plan off the ground and into consultation at home and abroad.

    "That left us necessarily in a position where people would be hungry for details," the official told reporters, speaking on condition of anonymity.
    "We wanted to help get Congress invested in the basic objectives and strategy and also, frankly to be fair, we wanted to come here."

    NO FIRST TIMER
    Geithner is a familiar face to many of the G7 ministers, having worked at the New York Federal Reserve, International Monetary Fund and in international affairs at the Treasury.

    At many G7 meetings as a policy "sherpa," Rome was his first meeting as secretary, less than three weeks after being sworn into office.
    He said he had sketched out the bank plan for his colleagues and assured them that the details would be filled in quickly. He appeared to win the confidence of some leaders.

    "We welcomed him very warmly," said French Economy Minister Christine Lagarde. "On paper (the plan) is great, the principles are very good, now it needs to start going."

    Geithner said he explained that the "buy American" clause, which requires government-funded public works projects to use U.S.-made steel and other products where possible, would not violate any commitments made to the World Trade Organisation and affirmed President Barack Obama's commitment to open trade.

    This won some traction with Italian Finance Minister Giulio Tremonti, who said that while protectionism was a danger, he believed America's abandonment of WTO policies was not. "At the G7 we talked about 'Buy America' as just a slogan," he said.
    Venison Stew

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  17. #9

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    Default Re: Bank bailout: More money, more problems

    Hey, Mr Sec Geithner, what we need are those investment laws back on the books. No one wants to buy finance stocks, or bonds, whether "grade AAA" or not! Can't you recognise a crisis of confidence?

    Let's talk about loan ratings, shall we? No one can tell the useless ones from the good stuff, even I with a FICO score over 775 and almost half down payment could only get a car loan with my credit union if I wanted less than 6 percent interest! Banks = lenders of last resort borrowing from the BIG lender of last resort. And I don't blame the banks as much as the loan resellers, btw, and what they did was legal. And what's with this Nobel prize for a computer program to manage risk, everyone knows computers only do what you tell them to do. "Too much trust in computers, gentlemen!" (and ladies). Yes, laws can be outdated and archaic, but there are times when you need them if for nothing else to slow down gaming the system.
    "All the prophets of Doom, Can always find room, In a world full of worry and fear..." - Protest Song, Monty Python


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    Default Re: Bank bailout: More money, more problems

    Where's Barney?

    ...
    http://www.dailyreckoning.com.au/ban...ne/2009/02/16/
    ...

    But we are in a depression. And everyone has to play his part. The politicians feign moral outrage. The bankers feign contrition. The spectators feign to know what was going on and have a good time. It's a show with a subplot, we think. In the interest of seditious mischief, here we undertake to deconstruct it.

    First we begin with a critic's remark: this is a well-rehearsed storyline. When the losers are unhorsed, they are almost always spat upon. Louis 16th's severed head was held up and subjected to "atrocious and indecent gestures"...Mussolini was hung on a lamp post. The bankers seem to be getting off easy.

    Now, a comparison: the farce of '09 is nothing compared to the great show put on following the '29 crash. The weakness of the present spectacle is the cast. The chief American protagonist - Barney Frank - is no match for his role model, Ferdinand Pecora. Pecora was "the most brilliant lawyer of Italian extraction in the US," said the TIME magazine report of March 6, 1933. He "finished public schools at 12. At 18, after loping through his brother's law books, he was managing clerk of a law firm. Even on the most complex cases (which he, tireless, likes best) he never needs notes, never forgets a word of testimony once it is on the record... At 47, his black eyes flash, his black hair bristles."

    But then, the victims are no match for Charles Edwin Mitchell either. "Billion Dollar Charlie" earned more than a million dollars in '29, when a million dollars was still real money. Senator Carter Glass said that he "more than 50 other men is responsible for this stock crash." But, as TIME reported, "neither the directors nor any other Manhattan banker knew anyone who, they believed, could do an equally good job of carrying the bank safely through storm and strife. That he has done the job, Ferdinand Pecora would be the last to deny. The statement of National City Bank [Mitchell's] was, on Dec. 31, 1932, the envy of nearly every bank in the US."

    Still, the depression was on and Mitchell was damned for it. By 1933, he was out of a job. And now Jamie Dimon, Lord Stevenson, Andy Hornby, John Mack, Vikram Pandit, and Sir Fred Goodwin are in the dock.
    'Yes, we have erred and strayed like lost sheep,' the bankers chant. "We are profoundly, and I think I would say unreservedly, sorry..." said Lord Stevenson, formerly of HBOS, on Tuesday. But "UK bankers find sorry is not enough," judged a headline on Wednesday morning. "I want groveling," wrote an opinionist to the LA Times . "I want show-trial sweating and stammering. I want their nine-figure bonus checks endorsed over to the rest of us...I want blood..."

    Be careful not to over-act, is our advice. Viewers might catch on. In London, the Guardian announced its own 12 questions to put to the bankers, including "why should profits be private, but losses be socialized?" Uh...that is a good question, but it is put to the wrong person. Why the bankers would want to offload their mistakes is a question even a Guardian reader could answer. Why else would they humiliate themselves publicly? Why would not a one of them dare show any fight? The pols control the money now; the bankers know it.

    The question is better put to the inquisitor than to his victim. Why would the government wish to take on the losses? There, the answer is fairly easy too - power. Besides, it's not their money; it belongs to the same mouth-breathing yahoos who are enjoying the show. In fact, we have other questions we'd like to put to Barney Frank, John McFall and the rest of these sanctimonious meddlers: How many of you jackasses went short the financial sector? And if you're so smart, why didn't you warn the public about the housing bubble and the toxic asset meltdown? If your committees...and your armies of regulators at the SEC, FHA, FDIC, FSA or other agencies...could do nothing to prevent the crisis, what good are they? And how cometh it to be that the biggest financial fraud of all time took place right under your own employees' noses?

    So you see, dear reader, how deliciously the plot turns? In the bubble years, the bankers ripped off the public...pretending to make them rich, of course...while the regulators looked the other way. Now, the politicians create a distraction, pretending to punish the bankers, while together they pick the public's pocket for $3 or $4 trillion more. The bankers are judged guilty; but the audience hangs.

    Enjoy your weekend,
    Bill Bonner
    for The Daily Reckoning Australia
    ...
    Venison Stew

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