Infinite Unknown

- French Socialist Nightmare: ‘The State Cannot Do Everything’ (Testosterone Pit, Feb 8, 2013):

The preannouncement came Thursday evening: PSA Peugeot Citroën, France’s largest automaker, would have a write-down of €4.7 billion. On top of a hefty operating loss. It would be colossal. An all-time record. Rumors spread immediately that PSA would need a bailout. The second in four months.

PSA passenger car sales in France dropped nearly 17% in 2012 from an already awful 2011. In January they dropped another 16.7%. Sales for all automakers dropped 15%, and PSA’s market share had eroded further. Kia-Hyundai sales jumped 21.2%, the only major automaker with gains. Even Volkswagen Group got clobbered: down 23.9%. PSA isn’t internationally diversified enough. It doesn’t have much in China and nothing in the US, the largest markets in the world, both growing. It’s mired in Europe where auto sales have ground to a halt. It’s bleeding €200 million a month. It’s trying to lay off 8,000 workers and shutter its plant in Aulnay-sous-Bois. And its Banque PSA Finance was bailed out last October with €7 billion in taxpayer money.

The government was so worried that it was actively studying a bailout, sources told the Liberation after the losses were announced. It was just hypothetical. “But if a capital infusion would become inevitable, the state could participate,” the source said. Instantly, a cacophony of discord erupted—within the Socialist government.

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Tags: Bailout, Cars, Collapse, Economy, EU, Europe, France, Francois Hollande, Global News, Government, Politics

YouTube Added: 07.02.2013

- ‘EU Parliament no better than banana republic’ with PR campaign (RT, Feb 8, 2013):

As eurozone leaders lock horns over the budget deal, speculation is rife the EU is set to invest millions in a PR campaign against online critics. It puts the EU Parliament on a par with so-called ‘banana republics’, MEP Nigel Farage told RT.

“The words ‘legal’ and ‘European Union’ don’t fit together. Nothing matters here, there are no rules,” says the UK Independence Party’s Nigel Farage of the EP plan to spend huge sums of taxpayer money on social network smear campaigns against those who speak out against it.

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Tags: Bailout, Dictatorship, EU, Europe, Fascism, Global News, Government, Lisbon Treaty, New World Order, Nigel Farage, Politics, Society

- How The Fed’s Latest QE Is Just Another European Bailout (ZeroHedge, Feb 2, 2013):

Back in June 2011 Zero Hedge broke a very troubling story: virtually all the reserves that had been created as a result of the Fed’s QE2, some $600 billion (which two years ago seemed like a lot of money) which was supposed to force banks to create loans and stimulate the US (not European) economy, ended up becoming cash at what the Fed classifies as “foreign-related institutions in the US” (or “foreign banks” as used in this article) on its weekly update of commercial banks operating in the US, or said simply, European banks. Continue reading »

Tags: Bailout, Banking, Economy, EU, Europe, Fed, Federal Reserve, Global News, Quantitative Easing, U.S.

- Daniel Hannan Destroys The 3 Unquestionable Myths Of Our Crisis (ZeroHedge, Jan 26, 2013):

The past and present bailouts of each and every bank (and ‘important’ industry) will, one day, be seen as a generational offense is how MEP Daniel Hannan begins this thoroughly British demolition of the three critical myths surrounding the crisis, that despite market optics, we are still living through. From the idea that capitalism has failed (it has not in his view, it has been ravaged by political pandering), to the crisis being caused by lack of regulation, and that greed is the single-driver of the mess that we remain in; Hannan suggests in a brief but extremely eloquent debate that there is a world of difference between being pro business and pro market as he destroys any semblance of credibility that the political (and elite) class has echoing a young Ron Paul in his thoroughly libertarian free-market sensibilities.

YouTube

Tags: Bailout, Banking, Collapse, Daniel Hannan, Economy, Global News, Government, Politics, Ron Paul, Society, Taxes, Taxpayers, U.K., U.S.

You can’t make this stuff up!

- Italian Scandal Widens As Italy’s Third Largest Bank Set To Get Third Bailout In 3 Years; Draghi, Monti Implicated (ZeroHedge, Jan 26, 2013):

While little has been said in the mainstream western press about the ongoing fiasco surrounding Siena’s Banca Monte dei Pasci, Italy’s third largest bank and the world’s oldest which may get its third bailout in three years - or even be nationalized – as soon as today, for fears that it may break the thin veneer of “recovery” in the European financial system, the situation on the ground in Italy is getting more serious by the minute, and will have implications on both next month’s general election, on Mario Monti, on Silvio Berlusconi, on frontrunner for the Prime Minister post Pier Luigi Bersani, and reach as far up as the head of the ECB – Mario Draghi.Several hours ago, on Saturday morning, the four-member board of the Bank of Italy – this time without its prior president Mario Draghi – met to consider the position of scandal-hit bank Monte dei Paschi di Siena and decide whether to authorize its request for 3.9 billion euros ($5.3 billion) of state loans.

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Tags: Bailout, Banking, Derivatives, Derivatives market, Deutsche Bank, ECB, Economy, EU, Europe, Global News, Goldman Sachs, Government, Italy, Mario Draghi, Mario Monti, Politics, scandal, Silvio Berlusconi

- Secrets and Lies of the Bailout (Rolling Stone, Jan 4, 2013):

It has been four long winters since the federal government, in the hulking, shaven-skulled, Alien Nation-esque form of then-Treasury Secretary Hank Paulson, committed $700 billion in taxpayer money to rescue Wall Street from its own chicanery and greed. To listen to the bankers and their allies in Washington tell it, you’d think the bailout was the best thing to hit the American economy since the invention of the assembly line. Not only did it prevent another Great Depression, we’ve been told, but the money has all been paid back, and the government even made a profit. No harm, no foul – right?

Wrong.

It was all a lie – one of the biggest and most elaborate falsehoods ever sold to the American people. We were told that the taxpayer was stepping in – only temporarily, mind you – to prop up the economy and save the world from financial catastrophe. What we actually ended up doing was the exact opposite: committing American taxpayers to permanent, blind support of an ungovernable, unregulatable, hyperconcentrated new financial system that exacerbates the greed and inequality that caused the crash, and forces Wall Street banks like Goldman Sachs and Citigroup to increase risk rather than reduce it. The result is one of those deals where one wrong decision early on blossoms into a lush nightmare of unintended consequences. We thought we were just letting a friend crash at the house for a few days; we ended up with a family of hillbillies who moved in forever, sleeping nine to a bed and building a meth lab on the front lawn.

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Tags: AIG, Bailout, Bank of America, Banking, Barack Obama, Ben Bernanke, Bush administration, Citigroup, Economy, FDIC, Fed, Federal Reserve, Financial Crisis, General Motors, George Bush, Global News, GM, Goldman Sachs, Government, Great Depression, Henry Paulson, Jamie Dimon, Larry Summers, Lehman Brothers, Merrill Lynch, Neil Barofsky, Nomi Prins, Obama administration, Politics, Ponzi schemes, Sheila Bair, Society, TARP, Taxpayers, Timothy Geithner, U.S., Wachovia, Wall Street, Wells Fargo

- Facing backlash, AIG won’t join suit against U.S. (USA Today/AP, Jan 9, 2013):

NEW YORK — Facing a certain backlash from Washington and beyond, American International Group won’t be joining a shareholder lawsuit against the U.S. government.

AIG was legally obligated to consider joining the lawsuit being brought against the government by former AIG Chief Executive Maurice Greenberg, who claims that the terms of the $182 billion bailout weren’t fair to AIG shareholders.

The prospect of AIG joining the lawsuit had already triggered outrage. A congressman from Vermont issued a statement telling AIG: “Don’t even think about it.”

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Tags: AIG, Bailout, Economy, Global News, Government, Politics, U.S.

- AIG Considers Suing US Over US Bailout Of AIG (ZeroHedge, Jan 8, 2013):

Sometimes you just have to laugh – or you will cry. In what could well have been Tuesday Humor if it wasn’t so real, the AIG board (fulfilling its shareholder fiduciary duty) is considering joining Hank Greenberg’s suit against the government over the cruel-and-unusual bailout that saved the company. The $25bn lawsuit, as NY Times reports, based not on the basis that help was needed but that the onerous nature “taking what became a 92% stake in the company with high interest rates and funneling billions to the insurer’s Wall Street clients” deprived shareholders of tens of billions of dollars and violated the Fifth Amendment (prohibiting the taking of private property for “public use, without just compensation”). The ‘audacious display of ingratitude’ comes weeks after the firm has repaid the $182 billion bailout funneled to it and its clients by an overly generous Treasury. The firm has asked for 16 million pages of government documentation, this “slap in the face of the government” portends a question of whether the government will sue The Fed for enabling the recovery that strengthened Greenberg’s case that the bailout was so harsh. Happy retirement Tim Geithner.

- Lawmakers outraged after AIG announces potential suit against US over bailout (FOX News, Jan 9, 2013):

As American International Group Inc. weighs whether to join a lawsuit against the government that spent $182 billion to save it from collapse, U.S. lawmakers have a message for the insurance behemoth: “Don’t even think about it.”

In a letter to AIG Chairman Robert Miller, U.S. Reps. Peter Welch, D-Vt., and Michael Capuano, D-Mass., characterized the insurer as the “poster child” for Wall Street greed, fiscal mismanagement and executive bonuses.

“Now, AIG apparently seeks to become the poster company for corporate ingratitude and chutzpah,” the letter read. “Taxpayers are still furious that they rescued a company whose own conduct brought it down. Don’t rub salt in the wounds with yet another reckless decision that is on par with the reckless decision that led to the bailout in the first place.”

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Tags: AIG, Bailout, Economy, Government, Politics, U.S.

- Greek Banks To Merkel: “Please Ma’am, Can We Have Some Moar”, Or Here Comes Bailout #4 (ZeroHedge, Jan 7, 2013):

As loathed as we are to say “we told you so,” but we did and sure enough eKathimerini is reporting this evening that: thanks to the ‘voluntary’ haircuts the Greek banks were force-fed via the latest buyback scheme and the political uncertainty causing non-performing loans (NPLs) to rise (in a magically unknowable way), they will need significantly more ‘capital’ to plug their increasingly leaky boats. The original Blackrock report from a year did not foresee a rise in NPLs (which Ernst & Young now estimates stands at 24% of all loans) and the buyback dramatically reduces the expected profitability of the banks as it removes critical interest payments that would have been due. Whocouldanode? Well, plenty of people who did not just buy-in blindly to the promise of future hockey-stick returns to growth. Expectations are now for the Greek bank recap to be over EUR30bn.
Via eKathimerini,

The country’s main banks are considering requesting additional funds for their recapitalization.

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Tags: Bailout, Banking, Collapse, Economy, EU, Europe, Germany, Global News, Government, Greece, Politics

- Here Comes The Student Loan Bailout (ZeroHedge, Jan 5, 2013):

2012 is the year the student loan bubble finally popped. While on one hand the relentlessly rising total Federal student debt crossed $956 billion as of September 30, and was growing at a pace that will have put it over $1 trillion by the end of 2012, the one data point confirming the size, severity and ultimately bursting of this latest debt bubble was the disclosure in late November by the Fed that the percentage of 90+ day delinquent loans soared from under 9% to 11% in one quarter.

Which is why we were not surprised to learn that the Federal government has now delivered yet another bailout program: this time focusing not on banks, or homeowners who bought McMansions and decided to not pay their mortgage, but on those millions of Americans, aged 18 to 80, that are drowning in student debt – debt, incidentally, which has been used to pay for drugs, motorcycles, games, tattoos, not to mention countless iProducts. Which also means that since there is no free lunch, all that will happen is that even more Federal Debt will be tacked on to replace discharged student debt loans, up to the total $1 trillion which will promptly soar far higher as more Americans take advantage of this latest government handout. But when the US will already have $22 trillion in debt this time in four years, who really is counting? After all, “it is only fair” that the taxpayer funded “free for all” bonanza must go on.

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Tags: Bailout, Barack Obama, Debt, Economy, Global News, Government, Obama administration, Politics, Students, U.S.