October 3, 2008 at 20:49:27 What you need to know about the $700 billion 2008 bail out by Garland Favorito Page 1 of 1 page(s) |   |
What you need to know about the $700 billion 2008 bail out Our Nation Betrayed
Last week the Federal Deposit Insurance Corp (FDIC) seized Washington Mutual and turned it over to JPMorgan Chase Bank for less than pennies on each dollar of WAMU assets. This week Citibank purchased Wachovia’s assets for a similar bargain basement price. Citibank and JP Morgan Chase are Rockefeller banks. Citibank was previously headed by James Stillman Rockefeller from 1959-1967 while Chase was previously headed by David Rockefeller, who founded the tri-lateral commission and was also a member of the Council on Foreign Relations. All U.S. President offices after Ronald Reagan and a majority of their cabinet posts have been filled with members of these organizations.
To understand what a sweet deal this was here are the rough numbers: JP Morgan Chase paid $1.9 billion for $307 billion of Wamu assets while agreeing to cover up to $30 billion of WAMU bad debt loans. Citibank paid $2.2 billion for about $700 billion of Wachovia assets while agreeing to cover up to $42 billion of Wachovia bad debt loans. JP Morgan Chase paid about .6% of the asset value for Wamu while Citibank paid about. .3% of the asset value for Wachovia.
Contrast those percentages with a couple of previous, more standard bank mergers: When Wachovia merged with SouthTrust in 2004 Wachovia paid $14.3 billion for $52.3 billion of SouthTrust assets. Likewise, when SunTrust merged with National Commerce Financial in 2004, SunTrust paid $6.8 billion for $23 billion of National Commerce Financial assets. Wachovia paid about 27% of asset value for SouthTrust while SunTrust paid about 29% of asset value for National Commerce Financial. These were generally considered to be good deals for both banks at the time.
The deals that JP Morgan Chase and Citibank received Wamu and Wachovia respectively, are only about 5-10% of the price of the 2004 mergers..Even when you add in all of the cost of the bad debt, their purchase cost is still less than 50% of the price of the 2004 mergers.
Now enter Treasury Secretary, Henry Paulson, with a 700 billion dollar bail-out deal for the banks. Not only would these banks get such a sweet deal but they would also be absolved of responsibility of the bad debt they acquired for the fire sale price! The American taxpayers would assume the responsibility for making good on loans with which they had nothing to do.
But wait, there’s more. The banks were already protected against the bad debts in the first place! Borrowers who put down less than 20% of the property value for a mortgage had to purchase Private Mortgage Insurance (PMI) that covers the difference in their down payment and the 20% value. So you would think that someone in the media would be asking where is all that PMI money that is supposed to be covering these loans now? Part of the answer rests with the American International Group (AIG), one of the largest mortgage insurers. Yes, that’s right, the same AIG that just received its own $85 billion bail-out from the Federal Reserve in exchange for an 80% stake. So doesn’t that make the Federal Reserve responsible for many of the bad loans?
By the way, the Federal Reserve is not Federal nor apparently does it have adequate reserves. It was formed in 1913 by a handful of the wealthiest families in the world including designees of William Rockefeller (grandfather of James Stillman Rockefeller), John D. Rockefeller (father of David Rockefeller) and J.P Morgan. Their banks, National City Bank, Chase Bank and J.P. Morgan, respectively, were the forerunners of Citibank and JP Morgan Chase, the beneficiaries of the sweet deals during the last week. What a small world of billionaires!
In March 1915, J.P Morgan interests also purchased 25 of the largest papers in the U.S. and installed their own editors as Rep. William Calloway explained on the 1917 Congressional record. The editors were thus able to gain control of, and supervise, national policy discussion throughout the country and present the perspectives that were vital to the interests of their purchasers during a key turning point in American history. The major media organizations have been tightly controlled ever since. Most today rely on a single national newswire.
Now after about 95 years, Americans are still haunted by the unholy alliance of bankers with media and the control they possess over the leaders of Congress. The banking and media conglomerate insists to the public that a 700 billion dollar taxpayer bail-out is necessary and forces the leadership of both major parties to go along since they are frequently beholden to the bankers through contributions of former employment. It does not matter that people are flooding Congressional offices with communication against the bill to the tune of about 30 to1.
Suppressed are facts that the bill would give any Treasury Secretary discretion to allocate $350 billion at a time to fellow banking cronies without Congressional oversight, even if those cronies banks were overseas. Fortunately, 225 representatives in the House stood up against the elite bankers, the elite media and their own Congressional leadership and said “No”. You can get the names of those who said “Yes” and “No” here: http://clerk.house.gov/evs/2008/roll674.xml.
So guess what? “It’s Back” just like always. After a one day break to observe Rosh Hashanah even though 93% of Congress is not Jewish, a slightly different version of the same bill sailed through the Senate. Did the bail-out principles change significantly? No, the Senate passed basically the same language with a few unrelated tax cuts and disaster relief to get holdout Congressmen to vote in favor of it in spite of the blatant unfairness to the American taxpayer. The Senate even upped the maximum deposit amount insured by the FDIC from 100,000 to 250,000 even though the FDIC has little means to make $100,000 deposits good in the event of another major bank failure.
Do you want to know why such irresponsible legislation can easily pass the Senate? Those same basic Congressional leaders, who passed legislation to create the Federal Reserve back in 1912 and hand over control of the American money supply to wealthy private interests, also passed the 17th amendment to the U.S. Constitution. That amendment removed accountability of the federal government to These United States by not allowing U.S. Senators to be elected by the states. Instead, U.S. Senators are now elected by all people in a single state and so far removed from them that they are no longer fully accountable.
At almost the exact the same time those leaders also passed the 16th Amendment of the U.S. Constitution which gave us the U.S. Income tax, a key plank in the Communist manifesto. The language of these amendments was never property ratified by 38 states as Bill Benson discovered in his journey to the archives of each state before writing “The Law that Never Was”. But that didn’t stop Secretary of State, Philander Knox, from declaring them ratified.
Shortly thereafter in 1914, Woodrow Wilson entered America into World War 1 after being narrowly re-elected with the slogan “He kept us out of war”. Wilson would not have been elected in the first place, had Teddy Roosevelt not run and split the Republican vote causing incumbent president William Taft to lose the election. Roosevelt’s chief financial backer was none other than J.P. Morgan whose newly acquired newspaper empire refused to print paid German warnings that the passenger ship, Lusitania, was carrying heavy arms. In May 15, 1915 the Germans then sunk the Lusitania, which was built by Cunard lines, a rival of J.P. Morgan’s major shipbuilding interests.
So there you have it. In less than one horrible decade an elite banking cartel aided by politicians claiming to represent Americans turned over the American money supply to private interests, implemented a Communist inspired income tax, removed accountability of the federal government to the states, entered the first World War to protect their interests and gobbled up all major American news sources to control public opinion. That is how we got to where we are today. The bankers, media, and our Congressional leaders all emphatically claim that we need another $700 billion of taxpayer debt for goods never received stacked on top of the current $10 trillion of national debt. Can America really survive if taxpayers are held accountable for mistakes made by some wealthy investment institutions?
Permission to reprint granted
Garland Favorito is a co-founder of VoterGA.
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