Citigroup will be audited because Grayson (Fl-D) asked

If you haven't heard about Neil Barofsky, he's been doing his service to this country by making sure we get down to the truth on issues relating to the bailouts/TARP.

There are some people that we need to thank for doing a superb job -- Barofksy will be looking into how Citigroup's loans and securities were valued at the time they insured by the taxpayer in the form of federal asset guarantees. If they marked their loans and securities higher than their actual value, there is significant "exposure" to the taxpayer, as pointed out by Nobel laureate Joseph Stiglitz.

Read more here:

Citigroup Inc.’s $301 billion of federal asset guarantees, extended by the U.S. last year to help save the bank from collapse, will be audited to calculate losses and determine whether taxpayers got a fair deal.

Neil Barofsky, inspector general of the U.S. Treasury Department’s $700 billion Troubled Asset Relief Program, agreed in an Aug. 3 letter to audit the program after a request by U.S. Representative Alan Grayson. Barofsky will examine why the guarantees were given, how they were structured and whether the bank’s risk controls are adequate to prevent government losses.

• Add new comment

Hooray -- FED CHief and FDIC dealing with failing or big banks

Federal Reserve of Kansas City Chief, Thomas Hoenig and the FDIC are actually doing something about failing banks! Hoenig and Sheila Bair have both been vocal about bad economic policy in the past and are going strong now too!

Hoenig is pushing for letting too-big-to-fail banks fail! He is convening a meeting of Fed Chiefs and directors in Wyoming and will be pursuing a lively debate on the issue on purpose. Bernanke is set to speak tomorrow. Bernanke himself talked about letting big banks fail to avoid moral hazard in a June 24 testimony. Hoenig has been a champion of the real facts -- overconcentration in banking has led to a more unstable and risky system. He suggests we let them fail when they do and allow the shreholders to take the hit instead of taxpayers. Perfect answer to moral hazard and ballooning US debt.

The FDIC is returning to a solution oft proposed in the past - splitting up failed banks into bad and good in order to get them off of the government's books! Hooray. We'll see if there will be buyers from the private market. Either way, trying something to speed up the reslution process is a tribute to making banks own up to their own mistakes.

• Add new comment

Loan modifications happening at a dismal rate << 10% !!

From USA Today:

'JPMorgan Chase is helping one in five troubled homeowners eligible for a government-sponsored housing rescue, while Wells Fargo is reaching 6% of eligible borrowers, and Bank of America is aiding 4%, the U.S. Treasury Department said Tuesday In its first monthly progress report on the $50 billion loan modification program launched in March.

Several loan servicing companies — including American Home Mortgage Servicing and PNC Financial Services Group— have yet to modify a single loan.'

• Add new comment

We're happy to join Prosperity Agenda.US

Prosperity Agenda, based in Baltimore and a project of Campaign for Fresh Air and Clean Politics Air, is run by Kevin Zeese. Kevin Zeese is an important political activist who has helped to change the political landscape and engage people in issues that affect our society. Zeese spearheaded efforts to create the Baltimore Economic Crisis Network with other Baltimore activists and organizations. They have organized demonstrations in front of banks, held town hall meetings and organized events on radio discussing the economic problems of Baltimore. He also engaged his organization and members with A New Way Forward starting in May 2009 -- they organized a protest in Baltimore against Wells Fargo on June 11, 2009. Since then, Prosperity Agenda has helped to shape the direction of ANWF and has also graciously offered to make us this new site. In that generous and altruistic spirit, their web expert, Joseph Schroeder has built our new site. We're extremely thankful for all of his hard labor and his willingness to help the cause. We thank people like Kevin and Joseph and their colleagues, who labor in the interest of making a better world.

• Add new comment

Our new home -- find our old blogs

Our old blogs will be back online soon. Thanks for your patience.

• Add new comment