Rag Hand

No new restrictions on the golden parachutes of financial executives who destroyed the economy.

Washington Post – By David Cho: The Obama administration has finished drafting the central elements of its plan to rescue the financial markets and is gathering feedback from regulators and Wall Street executives, sources familiar with the matter said yesterday.

In finalizing the plan, officials have made a policy decision that could dismay lawmakers. The administration is likely to refrain from imposing tougher restrictions on executive compensation at most firms receiving government aid but instead retain looser requirements initially included in the Treasury’s $700 billion rescue program, a source familiar with the deliberations said. Officials are concerned that harsh limits could discourage some firms from asking for aid.

Under the original rescue program approved by Congress in October, executives at financial firms for the first time faced federal limits on their multimillion-dollar pay packages. But those restrictions were unlikely to significantly reduce executive pay, analysts and banks said at the time.

My favorite statement so far: “Officials are concerned that harsh limits could discourage some firms from asking for aid. ”

What? Is the administration afraid they are going to hurt someone’s feelings? –These people ruined people’s lives and now they are getting treated better than their victims.

The GAO says that oversight is lacking in bailout:
Now the Treasury says it has started a monthly survey of these institutions to insure they follow what few rules there are. –What are they going to do? Have the banks fill out a questionnaire?

Washington Post – By Amit R. Paley: The federal government’s $700 billion bailout program continues to lack adequate oversight to make sure that banks receiving the taxpayer funds are using them properly, congressional investigators said yesterday.

The 112-page audit, the latest in a series of government reports raising concerns about proper oversight of the bailout program, comes as Obama administration officials debate whether to ask for billions of dollars more in bailout funds. A scathing report by the congressional auditors last month, which concluded that the Bush administration had failed to properly oversee the plan, contributed to congressional concern about abuse and waste.

As far as I can see the only things that differentiate this administration from the last are that the RIAA/MPAA has become the Whitehouse mover and shaker instead of the oil companies and this administration uses Facebook.

I had great hopes and while this bunch has to be better than the last, they remain first, foremost and forever politicians.

Washington Post:

President Obama’s plans to expeditiously determine the fates of about 245 terrorism suspects held at Guantanamo Bay, Cuba, and quickly close the military prison there were set back last week when incoming legal and national security officials — barred until the inauguration from examining classified material on the detainees — discovered that there were no comprehensive case files on many of them.

Instead, they found that information on individual prisoners is “scattered throughout the executive branch,” a senior administration official said. The executive order Obama signed Thursday orders the prison closed within one year, and a Cabinet-level panel named to review each case separately will have to spend its initial weeks and perhaps months scouring the corners of the federal government in search of relevant material.

Several former Bush administration officials agreed that the files are incomplete and that no single government entity was charged with pulling together all the facts and the range of options for each prisoner. They said that the CIA and other intelligence agencies were reluctant to share information, and that the Bush administration’s focus on detention and interrogation made preparation of viable prosecutions a far lower priority.

This exemplifies what went wrong with the George W Bush administration.

They were so involved with their witch hunt that they didn’t bother to organize anything under a single entity. Which explains why they insisted that they could hold prisoners as long as they wanted and fought going to trial at every turn.

Now we have to watch and wait while this latest President tries to keep his campaign promise to fix the mess. –I wish him luck.

The current situation demonstrates the problems inherent in allowing the presidency to become an autocracy. –By the way, the operative word in that last sentence is allowing.

Congress could have called Bush and Company to task but instead allowed them to stack the deck. None of the nominees to the really important positions were properly challenged. An Attorney General that swears that anything the Whitehouse wants is perfectly legal should never have been considered.

The creation of huge new bureaucracies were effectively rubber stamped. Homeland Security springs to mind.

Perhaps the Intelligence Czar and his organization would be a good example. –I know what the theory is, but just what does that bureaucracy actually do?? The answer is self evident. They don’t have to do anything. It was just another way to consolidate power and give members of the old boys club jobs.

Any bets on whether or not this new administration does anything but add to the ever growing number of government agencies?

When considering the promised fixes for any of our nearly infinite number of problems the three things to remember are:
First: The previous administration had eight years -with little or no opposition- to f*** things up, and undoing this may be impossible.
Second: Regardless of how you feel about Obama –he is a politician. Which is to say he makes promises he knows he can’t keep and relies on backroom deals to keep the few he can.
Third: The trillion or so dollars of bailout money has to come from someplace. Which pretty much leaves you and me stuck with the bill.

But, this new guy sure does talk purty.

AP CHICAGO – Launching an all-out media blitz as his impeachment trial draws near, Gov. Rod Blagojevich compared himself Friday to an honest, hardworking cowboy about to be lynched by a band of black-hatted political insiders eager to raise taxes. After keeping mostly out of the public eye since his arrest on federal corruption charges, Blagojevich is reversing course with a series of interviews and public statements portraying himself as the victim of vengeful lawmakers eager to toss him out of office.

“The heart and soul of this has been a struggle of me against the system,” Blagojevich said at a news conference Friday.

The FBI arrested Blagojevich on a variety of corruption charges, including the allegation he schemed to benefit from his power to name President Barack Obama’s replacement in the U.S. Senate.

His arrest triggered impeachment proceedings, and the House voted almost unanimously to send his case to the Senate for trial. A Senate conviction would remove him from office but have no impact on the continuing criminal case.

Nobody understands why the soon to be former Governor is taking the approach he is. But he has chosen to boycott the impeachment trial and defend himself in the public media.

Perhaps by playing the martyr he thinks there will be some sort of spontaneous public outcry. Or maybe he’s just got a martyr complex.

All I know is that, as someone who managed to get himself elected governor, his comparing himself to a lone cowboy defending himself against those evil politicians is just making him look like a gibbering fool.

Harrah’s Entertainment, the owners of Caesar’s Palace, has delayed their Octavius Tower project that was originally scheduled to open this summer at a cost of $1.3 billion.

Their intention is to complete the exterior of the tower so it will look like a fully functioning building. Then when business finally picks up, they can complete the 665 additional rooms in just a few months.

In the mean time the new pool and the convention facilities should be completed on schedule.

I think I see one of the problems. $1.3 billion plus the inevitable cost overruns. As soon as the boom ended no one would touch the financing for the project.

It’s like the housing market. Everyone was betting that the price of houses would continue forever. Just like the casinos thought that the bubble would never burst.

Reality check! That is not possible, but greed will out..

Bankers a saying that they will use this bailout as a windfall and pay down debt or invest in other businesses rather than loan more money to consumers.

NYT: Bailout Is a Windfall to Banks, if Not to Borrowers.

At the Palm Beach Ritz-Carlton last November, John C. Hope III, the chairman of Whitney National Bank in New Orleans, stood before a ballroom full of Wall Street analysts and explained how his bank intended to use its $300 million in federal bailout money.

“Make more loans?” Mr. Hope said. “We’re not going to change our business model or our credit policies to accommodate the needs of the public sector as they see it to have us make more loans.”

Speaking at the FBR Capital Markets conference in New York in December, Walter M. Pressey, president of Boston Private Wealth Management, a healthy bank with a mostly affluent clientele, said there were no immediate plans to do much with the $154 million it received from the Treasury.

“With that capital in hand, not only do we feel comfortable that we can ride out the recession,” he said, “but we also feel that we’ll be in a position to take advantage of opportunities that present themselves once this recession is sorted out.”

The article goes on to say that while most bankers maintain a “no comment” approach to the subject, behind closed doors they are saying the same thing. –They are not going to loosen up consumer credit.

The reason the country is so badly hosed is the amount of credit given to people who can’t afford it. Now the problem becomes one of maintaining the bank’s profitability without killing small businesses.

The banks are obviously scared of the bad economy, but I think the primary reason for paying down debt and investing in other businesses rather than lending money to the little guys is the same reason they gave so many bad loans in the first place. –Greed. The bankers all want to make their short term bottom line look better so they can get those year-end bonuses.

The only real question is why the hell did the feds give $154 million to a financially healthy bank?