Concern about TARP and Citigroup repayment

There is growing evidence that our country is on a path of having to take a 'fall' because of what is going on with the way money is being managed.

The inspector general who oversees TARP estimates the total cost of Wall Street bailouts could eventually reach $23.7 trillion. And I thought we were only talking hundreds of billions. And look at the fact that the $200B savings that Geithner pointed out is going to be spent versus saving to apply toward this huge liability.

Then today I found out that Citigroup who is repaying $25B of their TARP loan is going to get a giant tax break of $38B. Companies are allowed to offset their losses against their gains, but in this situation, the government sale of 34% stake in Citi and Citi's share sales qualify as a change in ownership. What is totally disheartening is that the news reported the repayment and excluded what the 'government intentionally set up' that requires the IRS to allow it. This may be legal but is totally unethical. Wouldn't you repay your debts if you were going to receive an even bigger monetary gift by doing so? This kind of behavior crosses all lines of political parties. It doesn't matter who is in office. Money always affects the leaders' judgment by forcing action that always keeps it first versus looking out for the welfare and common good of the people. Yet at this time in our history, we have gotten the better of ourselves, because we have weakened our ability to maneuver due to the mountainous debt. Debt buries at all levels when it gets unmanageable. It appears to me that handwriting is on the wall and it is not in the distant future.

One final comment, I saw Time chose Bernanke as the person of the year. I can only laugh since as you know I think he should be replaced by allowing the banks to lead the way in telling the government what to do through intimidation of the financial system collapsing. I keep remembering what Thomas Jefferson said about the banks being too powerful. I would rather this system fail and we start over than imprison each of us, our children, our grandchildren, our great grandchildren, and future offspring indefinitely.

TARP Repayment, Housing

Timothy Geithner recently said, "None of them would have survived... the entire financial system and all the major firms in the country, and even the small banks across the country, were at that moment at the middle of a classic run, a classic bank run." This statement is in contrast to what the executives of the big banks said, like Goldman Sachs who claimed they would have survived without government help at the peak of the crisis. I wonder what he means by a 'classic' collapse. I presume he's talking from the textbook.

Imagine being the handful of people who believed the entire system was collapsing and what they were thinking and feeling at the time, like Paulson and Bernanke. Look at how a few can control the whole course of our financial system. Congress totally bought into that fear and there was no 'check and balance.' I'm still supporting the removal of Bernanke.

Good news is that most of the TARP will be repaid and that at least $200B is saved. I hope the government doesn't go out and immediately spend the savings. There are still hundreds of billions the government guarantees of devalued securities and other assets of the banks. There needs to be some form of 'available savings' for unexpected disruptions.

I can't help but comment on the housing industry. Chase said in November that 50% of the borrowers on their mortgages didn't make the 3 months of the payments required to make modified loans permanent. What the government is forcing the banks to do is not achievable because people were given loans in the past that even with monthly reductions, extensions on the timeframe of the mortgage, and low interest rates still cannot qualify, and it is outside their financial means to continue. Yet the government seems to have a one-tracked mind and continues this path that is nonproductive. Also, one of the big housing websites, Trulia.com is showing increasing new listings for foreclosures that are coming onto the market in the areas that I follow in California and Oregon.

Given my belief that each of us has a soul plan, there is a mixture of destiny and choice. I also believe that the world has a soul plan along with each individual country. I wonder what the U.S. has destined on its path as we move into 2010. It is a time of major change. There is no doubt about it based on what we have experience in the last two years.

Healthcare, Importance of Experience, Personal Responsibility

On my July 27, 2009 blog, I shared what my personal experiences have been with medical insurance and also my opinion regarding what the current administration is attempting to do along with what I think would be prudent steps. As a country, we need to change our perspective as to how the individual is perceived. Instead of encouraging the victim energy with the 'government will take of you scenario', we need to be helping others learn how to be more resourceful and how to live within their means. This is a conservative viewpoint, yet I see that the continuation of our democracy and capitalism depends on this magnitude of a change. All the actions from the government should stem from this way of looking at us collectively. I am concerned that we are headed down the primrose path, but it is an exciting time and shows the importance of the individual standing firm in his/her integrity. The government at all levels does not know what is best for us. We have to influence them in a way that they listen and act accordingly, not just give us lip service and then act from what they think is right.

I see signs of our inexperience in our government showing up in the last few days. For example, we put a 35% tariff on the tires coming from China. They are in great consternation which tells me that there was no greasing of the wheels before acting. I wonder if anyone thought this whole process through, given the leverage that China holds because of their ownership of our debt to a tune of close to a trillion. Imagine the interest rate increase on this debt if they decided to protest against this tariff by dumping some of it.

There is great eloquence of self-expression coming from Washington D.C., but the actions are not matching what is being said. They have lost touch with the people. I am giving them credit that they had some connection in the past. An example is my personal experience with my two senators and representative, especially from their response around the TARP. They were receiving 95+% against, as was my vote, and still thought they knew better. They don't realize that their strength comes from us who see differently, more at the ground level, from living our own life experiences. A democracy has to include the people because the President's office, Senate, and House of Representatives are individuals mainly with law backgrounds who are affluent. It's easy for them to abuse their power, taking care of their needs/wants first as is reflected in their health care program. We as citizens are responsible for keeping them in check. Your power of influence is greater than you would believe. Don't hesitate to make your own words known when you know that others are not operating with integrity or ethics, or are just plain ignorant.