Dodd Tries to Undo Bonus Protections He Put In...

[me]

The Homeowner Affordability and Stability Plan
The HASP provides assistance to homeowners by providing lower rates to individuals that can not refinance their homes because of the reduction in home prices; help for homeowners facing foreclosure and capital injections to Fannie Mae and Freddie Mac to keep mortgage rates low.



The Treasury has set-up a site http://financialstability.gov/ to provide the public with information on the evolution and success of the plan, including providing online access to all the contracts with recipients of aid.


A look at what has already been done: the TARP (it's only been 5 months, but there's been plenty of action...)
The by now famous (or infamous depending on your point of view) TARP came into existence just a few months ago, on October 3, 2008. The plan was first introduced by the then Treasury Secretary John Paulson as a mechanism to assist struggling financial institutions re-capitalize themselves and re-start lending by purchasing their toxic assets, so that they could take them off their balance sheets.  The TARP was the Treasury's and Fed's response to the havoc that broke through the market in the aftermath of Lehman Brothers' bankruptcy and the "bailout" of the insurance giant AIG, which received a gigantic $85 billion loan in exchange for an 80% ownership stake in the company.  A few days after these events, the credit markets which had been under severe strain, seized with the announcement that a money market fund heavily invested in Lehman's debt could not return 100% of the assets to its investors.  This caused a run on money market funds and inter-bank lending went to a standstill. By the evening of Thursday September 18, Paulson and Federal Reserve Chairman Ben Bernanke announced plans to put together a facility to buy the troubled assets of financial institutions so that they could stop the string of continuous losses in their portfolios caused by bad mortgage and derivative bets and thus have a hope of recapitalizing themselves and start lending.

Congress approved a $700 billion package under the Emergency Economic Stabilization Act, which authorized the Treasury to take the necessary steps to address the credit crises.  The funds were to be disbursed through the Troubled Asset Relief Program (TARP) in two tranches of $350 billion.  Soon after the TARP was authorized, the Treasury decided that buying troubled assets was no longer the best course of action to take to help the financial markets.  Rather it proceeded to inject capital directly to banks and other financial and non-financial institutions.  The table below provides a summary of the top recepients of TARP funds (this table provides the full list).

While most of the funds went to banks, the former insurance giant AIG received $70 billion from the TARP (bringing the total investment from the government, Fed and Treasury, to $180 billion), and two of Detroit's "Big Three" received close to $21 billion in total ($5 billion going to GMAC, the financial arm of GM and Cerberus), so that they would avoid bankruptcy.  and To date the Treasury has parted with over $300 billion of the first $350 billion of funds approved, and a few days before the Obama administration took power, Congress approved the disbursement of the remaining $350 billion to the Treasury.  Citigroup and Bank of America deserve special mention, to help them avoid insolvency in light of the large losses in their portfolios of assets (BoA's coming in large part from their acquisition of Merrill Lynch in mid September), the Treasury provided additional capital investments and loss guarantees.

   

TARP Funds Disbursed

($ million)
AIG   70,000
Citigroup   50,000
Bank of America   45,000
JPMorgan Chase & Co.   25,000
Wells Fargo & Company   25,000
General Motors Corporation   10,284
Morgan Stanley   10,000
The Goldman Sachs Group, Inc.    10,000
The PNC Financial Services Group Inc.   7,579
U.S. Bancorp   6,599
GMAC LLC   5,000
SunTrust Banks, Inc.   4,850
Chrysler Holding LLC   4,000
Capital One Financial Corporation   3,555
Regions Financial Corp.   3,500
Fifth Third Bancorp   3,408
American Express Company   3,389
BB&T Corp.   3,134
Bank of New York Mellon Corporation   3,000
KeyCorp   2,500

While most of the funds went to banks, the former insurance giant AIG received $40 billion from the TARP (bringing the total investment from the government, Fed and Treasury, to $125 billion), and two of Detroit's "Big Three" received close to $21 billion in total ($5 billion going to GMAC, the financial arm of GM and Cerberus), so that they would avoid bankruptcy.  To date the Treasury has parted with over $330 billion of the first $350 billion of funds approved, and a few days before the Obama administration took power, Congress approved the disbursement of the remaining $350 billion to the Treasury.  Citigroup and Bank of America deserve special mention, to help them avoid insolvency in light of the large losses in their portfolios of assets (BoA's coming in large part from their acquisition of Merrill Lynch in mid September), the Treasury provided additional capital investments and loss guarantees.


All in all 362 institutions in 46 states have received TARP funds.  AIG at top with $70 billion of capital in the form of common looking preferred shares, for an ownership stake of 77.9%, and at the bottom small banks receiving $1.3 million.



The distribution of banks by state receiving funds non-surprinsingly sees New York on top as home of most of the investment banks and many a commercial bank.  North Carolina, home of Bank of America comes a distant second.  California, one of the epicenters of the mortgage crisis, comes in first with the "distinction" of having the most banks receiving funds from the TARP; North Carolina and New York are second and third.  The following table provides a snapshot of the states whose banks have received the most aid.  The full list is available here.



   

Total TARP Funds Disbursed

($ million)
   

Number of Institutio

http://trackthestimulus.com/TARP.aspx

I tried to give you enough information to encourage you to research the subject before continuting to make yourself look uninformed but to no avail...

On September 16, 2008, the Federal Reserve Bank of New York extended a line of cerdit to AIG in the amount of $85 billion.  Congress had nothing to do with it.

On October 9, 2008, the company borrowed an additional $37.8 billion from the Fed via a second line of credit.  Congress also had nothing to do with this.

On November 10, 2008, the Treasury announced it would purchase an additional $40 billion in preferred stock from AIG, this time under the authority of H.R. 1424 (TARP); this was approved by Congress.

The workings of these three incidents get somewhat convoluted but as you can see, most of the money used to bail out AIG came directly from the Fed and was never voted on by Congress.  You can't hold them responsible for something over which they neither had a vote nor any control.

[Exterminator]

Do you have a point?  Perhaps the sources I researched were outdated but even if AIG has gotten $70 billion under TARP, the bulk of the money still came from the Fed without any involvement from Congress whatsoever.

[Henry Hawk]

I tried to give you enough information to encourage you to research the subject before continuting to make yourself look uninformed but to no avail...

On September 16, 2008, the Federal Reserve Bank of New York extended a line of cerdit to AIG in the amount of $85 billion.  Congress had nothing to do with it.

On October 9, 2008, the company borrowed an additional $37.8 billion from the Fed via a second line of credit.  Congress also had nothing to do with this.

On November 10, 2008, the Treasury announced it would purchase an additional $40 billion in preferred stock from AIG, this time under the authority of H.R. 1424 (TARP); this was approved by Congress.

The workings of these three incidents get somewhat convoluted but as you can see, most of the money used to bail out AIG came directly from the Fed and was never voted on by Congress.  You can't hold them responsible for something over which they neither had a vote nor any control.

Okay, you are correct on who actually gave the money out....

but it is congress' job to look out for our best interests of this country....and they are doing everything but that ....they buddied up with these banks, like AIG to line their own pockets and putting their personal agenda's before the needs of the people...

and Barney Frank and Dodd are two, that can be directly pin pointed for NOT looking out for the best interest of the people....imo

[Henry Hawk]

Funny, where was the outrage when the banks were buying congressmen left and right to get their bankruptcy bill passed?  Does it seem to anyone else like the banks were so adamant about banruptcy reform because they saw this coming?

the Banks knew exactly what was going on.....they are much smarter than those in congres...

[Henry Hawk]

we are drifting away from the point to this thread....Dodd and congress is outraged about these bonus' and it was DODD and Congress that passed a bill in the Stimulus package that allowed them to get their bonuses....they knew damn well that they was getting a huge bonus....and NOW!! these B@st@r# are crying that these guys need to give it all back or they are going to TAX is back from them....now, isn't THAT illegal as hell to do?...is there NOT suppose to be no Taxation without representation?

[Exterminator]

but it is congress' job to look out for our best interests of this country....and they are doing everything but that ....they buddied up with these banks, like AIG to line their own pockets and putting their personal agenda's before the needs of the people...

Like this is anything new?

and Barney Frank and Dodd are two, that can be directly pin pointed for NOT looking out for the best interest of the people....imo

Correct but you are looking at this through your partisan colored glasses.  The aforementioned bankruptcy bill was a republican initiative that clearly favored the interests of the campaign contributors over those of the constituents.  Of course, once those contributors started spreading money around on the other side of the aisle, enough dems jumped on board to finally get the thing passed.  These are exactly the types of things that make me believe there is no real substantial difference between the two major parties...both work for the same corporations.

[Henry Hawk]

Like this is anything new?

Correct but you are looking at this through your partisan colored glasses.  The aforementioned bankruptcy bill was a republican initiative that clearly favored the interests of the campaign contributors over those of the constituents.  Of course, once those contributors started spreading money around on the other side of the aisle, enough dems jumped on board to finally get the thing passed.  These are exactly the types of things that make me believe there is no real substantial difference between the two major parties...both work for the same corporations.

Ex, I am right there with you on this...there are very, very few in washington that are there representing the people...from either side of the parties...they are vastly representing the one's who are lining their pockets...

I'm just as sick of the repubs, ex....I want to see, all of them out of there........

we SHOULD have let these guys GO bankrupt!

[Exterminator]

Ex, I am right there with you on this...there are very, very few in washington that are there representing the people...from either side of the parties...they are vastly representing the one's who are lining their pockets...

I'm just as sick of the repubs, ex....I want to see, all of them out of there........

Anyone who doubts this need only pay attention to the lavish private parties thrown by these companies at either of the national conventions.  No surprise that these types of events are illegal at any other time.

we SHOULD have let these guys GO bankrupt!

They very well still may...the difference now is that we own 80% of them.

[Henry Hawk]

They very well still may...the difference now is that we own 80% of them.

tell me they did NOT know exactly what they were doing...(the banks that is)

I'm serious....Dodd and Frank need to resign...I'm not being biparisan here....we CAN control those who were involved...

[Exterminator]

tell me they did NOT know exactly what they were doing...(the banks that is)

Of course they did...very well played, too!

I'm serious....Dodd and Frank need to resign...I'm not being biparisan here....we CAN control those who were involved...

Everyone is involved...would you like for the entire government to resign?

[Henry Hawk]

Of course they did...very well played, too!

Everyone is involved...would you like for the entire government to resign?

as a mater of fact yes...

but you can start with the ones who had a direct hand in this mess...

[Exterminator]

It would seem that there is some confusion about who actually added the exclusion for these bonuses to the ammendment as the original version did not contain it.

[Henry Hawk]

It would seem that there is some confusion about who actually added the exclusion for these bonuses to the amendment as the original version did not contain it.

you mean these guys are acting like they cannot figure out WHO added anything to a bill?.........THAT IS A BUNCH of crap...as confusing as they can be......are they saying that our system is THAT flawed when something can be added to a bill without any way to trace who or what was attached......I'm not buying that for a minute...

[Exterminator]

You are certainly welcome to research it but that's how the system works and it happens all of the time.

[Henry Hawk]

You are certainly welcome to research it but that's how the system works and it happens all of the time.

so no one is responsible?..........Dodd was the author of the Bill.....if something got on it that HE did not want....then HE is not doing HIS job....another reason HE should be fired or resign.