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"I learned that in extreme situations when human lives and dignity are at state, neutrality is a sin. It helps the killers, not the victims." Elie Wiesel, Holocaust Survivor who lost his family in the Holocaust - Nobel Prize Author
Socialism - Liberalism Quotation
"The American people will never knowingly adopt socialism, but under the name of liberalism they will adopt every fragment of the socialist program until one day America will be a socialist nation without ever knowing how it happened." – Norman Thomas
Former Car Czar Steven Rattner left the Obama administration within five months of signing on. He walked out with little respect for anyone in Obama's inner circle, including Rahm Emanuel and Tim Geithner, according to snippets from his coming tell-all book. But that was likely not the reason for leaving the Treasury. Rattner was in trouble with the New York Attorney General. Maybe the administration wanted him to leave, but official statements of his departure did not lend us to believe that to be the case. While the book is stirring political waters, there is little-trumpeted news of Rattner claiming Obama's transition team refused to work with Bush advisers - advice that would have saved taxpayers "billions of dollars." That's big news, but the press only slightly mentions this inconvenient bombshell.
Steve Rattner
The accusation of squandering billions trillons is so familiar to the administration, they aren't even bothering to refute the charge. They are, however, upset, that Rahm Emanuel has been accused of saying "f*** the UAW." The administration is frantically scrambling to deny that Rahm would EVER say such a terrible thing about a union member. Not only did he not say it, he didn't think it either, is the White House position. According to the White House "Rahm tirelessly defended and advocated on behalf of the auto workers," all-the-while working to f*** the rest of us.
Rattner admits that he had absolutely no background or interest in the auto industry when he was offered the job as Obama Car Czar. Rattner's background is in journalism (he was a New York Times reporter), communications, investment banking. In Spring 2009, New York City Mayor Michael Bloomberg gave Rattner and Quadrangle Group (which Rattner co-founded) his $16 billion "blind trust" to manage while Bloomberg considered running for U.S. president. Rattner continued in that capacity even as he entered the Treasury as Car Czar.
Rattner and the Quadrangle Group are now in hot water with the Securities and Exchange Commission (SEC) for a pay-to-play scheme. The Quadrangle Group and Rattner separated before he left the Treasury. Cronyism gone wrong - billions gone wrong. Nothing unusual coming from the U.S. Treasury or the White House.
Indications are strong that the Obama administration will order the flailing Fannie Mae and Freddie Mac to forgive mortgages when a mortgage is more than the value of the property. The buying of votes never ends. Every election year, Conservatives speculate on the Democrat October Surprise. In this year of extreme heat in the northeastern states, it appears the heat index may soar if we have this August Surprise.
Fannie Mae - October Surprise
This "mainstream bailout" of forgiving the mortgage debt of 15 million mortgages - estimated at $800 billion, flies in the face of this report from the Wall Street Journal saying things are beginning to look better at Fannie Mae, which for the first time in three years, showed loans 90 days behind falling to 5.15% in May from 5.30% in April.
The move, if it happens, would be a stunning political and economic bombshell less than 100 days before a midterm election in which Democrats are currently expected to suffer massive, if not historic losses. The key date to watch is August 17 when the Treasury Department holds a much-hyped meeting on the future of Fannie and Freddie. A few key points:
1) Republican leaders believe this is going to happen since GOPers and Democratic moderates in the Senate are unwilling to spend more taxpayer money on more stimulus. But such a housing plan would allow the White House to sidestep congressional objections and show voters it is doing something tangible about an economy that seems to be weakening.
2) Wall Street banks are alerting their clients privately to this possibility...
3) Keep in mind the political and economic context. The nascent recovery is already running out of steam. Wall Street economists just downgraded the government’s second-quarter GDP estimate of 2.4 percent to around 1.7 percent. And as even Treasury Secretary Timothy Geithner is warning, the unemployment rate may well begin to rise back toward the politically toxic 10 percent level given such sluggish growth. Many in the White House thought the unemployment rate would be dropping sharply by this point in the recovery.
Fannie Mae is the biggest single source of money for mortgages in the United States. From 1998 to 2004...it was headed by former Clinton budget director Franklin Raines, whose top management team included former Clinton Justice Department official Jamie Gorelick, sometimes mentioned as a future attorney general in a Democratic administration. During that period, the report says, Raines and his team grossly overstated Fannie Mae’s earnings — to the tune of $10.6 billion — for the purpose of paying themselves big bonuses.
In doing so, the report says, Raines and his team steered Fannie Mae far afield from its original mission, transforming it from a stable business into a risky one....
Fannie Mae is not just any private institution. It is congressionally chartered, meaning its existence is established in law, it does not have to pay state and local income taxes, and it is not subject to bankruptcy laws. It can borrow money at a lower rate than anyone else except the federal government itself. Given all that, there is a public perception that Fannie Mae is a rock-solid government institution. “There is an implied guarantee,” says Sen. John Sununu, a member of the Senate Banking, Housing, and Urban Affairs Committee who has sponsored legislation to reform Fannie Mae. “Investors think they are the next best thing to Treasuries.”
Obama visited a Ford plant this week and portrayed himself as the uber-patriot for saving the auto industry, all the while suggesting that anyone opposed to his bailout is not a patriot, and lost faith in the ability of Americans. Nevermind that Ford refused to be a part of the Cash for Votes program - the White House, says Ford benefited from the Government takeover because the federal money kept suppliers in business. I'm asking: when will the Government relinquish it's majority ownership of GM?
Barack Obama
Telling his "cheering" audience that Republicans lacked confidence in the resilience of American workers, he regretted that "we" didn't understand the "pride you take in building these great cars...." Of course, Americans like me and many of my friends have taken pride in American cars all of our lives.
The New York Times cheekily says that the bailout began under the Bush administration, without noting that Republicans, including G.W. Bush, denied the use of TARP for the auto industry, until Democrats succeeded in making it happen.
Ford did participate in an Energy Department loan to retool a line to build "energy efficient Explorers." Obama came to Ford with check in-hand: a $250 million dollar loan guarantee from the American taxpayer to finance the export of 200,000 vehicles to Mexico and Canada. Saved again by The One.
As we have been cautioned this week by various conservatives, headed by Ann Coulter, don't get comfortable with the conservative movement in America. There are always those claiming to be conservative, yet all to willing to do just about anything for a few votes.
Thaddeus McCotter and John Linder
Rep. Thaddeus McCotter (R-MI) heads my list. He is a man I have quoted numerous times and have admired. No longer.
According to Americas for Limited Government (ALG), McCotter is one of nine Republicans supporting H.R. 3936, the Preserve Benefits and Jobs Act of 2009. In fact, I find that McCotter is a co-sponsor along with 8 other Republicans: Virginia Brown-Waite (FL), Jo Ann Emerson (MO), Steve Latourette (OH), John Linder (GA), Tim Murphy (PA), Peter Roskam (IL), Aaron Schock (IL), and Patrick Tiberi (OH). The bill's sponsor is shown to be Earl Pomery (ND),
Rep. John Linder co-authored The Fair Tax with Neal Boortz, and is also a co-sponsor.
My question, in particular to McCotter and "The Fair Tax" guy, John Linder, is, how does this bill separate itself from redistributing my wealth? Check out McCotter's YouTube page, pick any video and you'll see the hypocrisy, and understand why I was sickened to see his name on this legislation.
The bill proposes to bailout unions, specifically multi-employer pension fund unions. Listed among them is the MLBPA (Major League Baseball Players Association, NFLPA (National FootballLeague Players Association and more than 100 other union-run funds, according to ALG. H.R. 3936 allows for bailouts of SEIU, Laborers' International Union of North America (LIUNA) and the Teamsters. All are underfunded and they are coming at our wallets.
Barack Obama will be chuckling this Memorial Day weekend in Chicago, as he enjoys his visits his beloved pizza joint there - you know, that pizza that he serves at the White House - flies the chef in, and all that. If Democrats can get staunch Republicans like McCotter to sponsor this horrible legislation, what can't he do?
From ALG:
“HR 3936does not require that a union cut benefits, have participants pay part of the pension costs, change retirement ages, limit access to younger employees, or use union dues to supplement the plan. It doesn’t require that unions negotiate for higher pension payments from employers in lieu of other benefits. Instead, it merely throws the unfunded liabilities onto the backs of taxpayers – a potential $165 billion dollar bailout,” Wilson explained.
Citing the hundreds of millions of dollars spent by labor bosses to support Obama, the Democratic majority, and the 9 House Republicans (see attachments below), Wilson decried unions’ “audacity to try to cash in on their political investment by foisting these unfunded liabilities accumulated under their watch onto the backs of taxpayers, who are struggling to fund their own retirements.”
The Senate version of the bill, SB 3157, was to be heard in the Health, Education, Labor and Pensions Committee on May 27th. The Senate Committee titled their bill Building a Secure Future for Multi-employer Pension Plans or Create Jobs and Save Benefits Act of 2010. It shows a full Committee hearing but no report on those hearings. Democrat Sen. Robert Casey (PA) is the sponsor. ALL CO-SPONSORS ARE DEMOCRAT in the Senate.
The House version of the bill sits in the House Education and Labor Subcommittee on Health, Employment, Labor, and Pensions and in the House Ways and Mean Committee.
I don't care that the unions are under-funded. I don't care that some of these states, especially Michigan and Ohio are hard-hit. The fact is that it should be a criminal matter that legislators may tell me to come to the rescue with my hard earned dollars.
I've had enough. I bet you've had enough. The ALG report on this is excellent and includes a line to PAC donations for each of the nine, as well as a link to a pdf of ALG president William Wilson's letter to the nine GOPers. Contact them here and here.
Among the PAC donations to McCotter, I notice there were many who really believed he believed in the tenets of our Republic, i.e. the Committee for the Preservation of Capitalism, the Free and Strong America PAC, the Freedom and Security PAC, the Freedom Project, Friends of Jeb Hensarling, Friends of John Boehner, the Growth and Prosperity Political Action PAC, Help America's Leaders PAC, the Texas Freedom Fund, and the Win Back America PAC.
An Oklahoma City property, the Crossroads Mall, is now owed by the U.S. government. The mall came out of bankruptcy last Spring, has a $77 million debt on its books, and is for sale with a price tag of $24 million. All the major anchor stores are long gone.
Fed Owned Crossroads Mall
The Obama government hired a real estate broker to sell the property on behalf of the America people.
Losses are potentially at taxpayer's expense because the Fed generally
makes a fat annual profit running the country's payments system and
other operations, and any losses reduce how much it can pay out to the
U.S. Treasury, and hence taxpayers.
After bailing out JPMorgan Chase, to the tune of $29 billion, they purchased Bear-Stearns and acquired the OKC property through their portfolio. Are there other "physical" properties out there that our government owns in our cities and towns? Well yes, and there are probably far more than these examples:
In part, this decline in value is because two other pieces of the
Bear Stearns collateral -- Extended Stay Hotels, and the GrandStay
Residential Suites Hotels in Oxnard, California -- have sought court
bankruptcy protection.
Extended Stay owes the Fed almost $900 million, consisting of $153
million in commercial mortgage-backed securities and $744 million in
junior mezzanine debt, while GrandStay won Chapter 11 bankruptcy
protection with a bit under $10 million in debt.
Our cities, towns and counties all have "federal" buildings, but now, "federal building" takes on a whole new meaning. We don't pay our trash and water bills in these new "federal buildings."
What the Fed and banks have said they are worried about is a new
wave of losses on commercial real estate and here is an example of an
early adopter in the Fed's portfolio," said Lou Crandall, chief
economist at Wrightson ICAP in Jersey City, New Jersey.
"The fact that the thing was written so that the Fed does not have
the oil rights is just classic. Not that that is the Fed's fault," he
said.
That's a very telling comment. "Fed does not have the oil rights is just classic." There is an oil pump in the parking lot of this mall. Oil and mineral rights are often not sold in Oklahoma when a property changes hands. What would the Feds have done, had they known owning mineral rights on this property was a possibility, and the owner of those rights did not want to sell?
A cell phone in Washington, D.C. belts out "If You’ve Got the Money, I’ve Got the Time,” by Willie Nelson.
A recorded voice answers: "FRB Property Management. We’re busy. Leave a message!”
Caller: "Ben! Jim, in Oklahoma City. The women’s rest room next to my store is backed up! Help!”
Willie sings again: "If you’ve got the money, honey ...”
Caller: "Ben, Josh, in Oklahoma City. Some of the lights are out again in my end of the mall. Can you get somebody on it?”
Willie warbles: "Bring along your Cadillac, leave my ol’ wreck behind ...”
Caller: "This is Jim again, in Oklahoma City. Mr. Bernanke, the backed-up rest room is flooding my store! Do something!”
Silly, huh? But Ben Bernake, as Federal Reserve Board chairman, is, in fact, the landlord of Crossroads Mall in Oklahoma City.
The Mize article says that the Feds are now in court in New York City City trying to hold the original mall owners responsible for the debt.That's an interesting concept - kind of like the way old-America used to work.
The half-empty Crossroads Mall is still open for business on the south side of Oklahoma City.
The following is a breakdown of Inspector General Neil Barofsky's report before the House Committee on Financial Services, Subcommittee on Oversight and Investigations, ending June 30, 2009. Don't run away. You need to know this.
Rep. Barney Frank (D-MA) is the chairman of the House Committee on Financial Services. Rep. Dennis Moore (D-KS) is the chairman of the Subcommittee on Oversight and Investigations. I do not see this report linked on the webpages. Perhaps it is there, but I have not found it.
The following is the essence of the report, in my estimation. Below the "essence" is the full text. When you see text in between brackets [ ], those are my comments. I have used some short cuts in the "essence" but have not changed the meaning in anyway (you can check that for yourself as I have provided the page numbers.
Note that I have interchanged SIGTARP (Special Inspector General TARP) with "we."
Page 3
Transparency: ...repeatedly failed to adopt recommendations believed essential to providing basic transparency.
Use of Funds Generally: Other than in a few agreements...Treasury has declined to adopt this recommendation, calling any such reporting "meaningless"...
Valuation of the TARP Portfolio: Treasury has retained asset managers and is receiving such valuation data...but has not committed to providing such information except on the statutorily required annual basis [does that mean no valuations have been provided as TARP is not yet a year old?]
Page 3 and 4
Regular disclosure of PPIF Activity, Holdings, and Valuation: ...the taxpayer will be providing a substantial portion of the funds that will be used to purchase toxic assets in the Public-Private Investment Funds (PPIF)...all trading activity, holdings, and valuations of assets...Not only should the disclosure be required as a matter of basic transparency in light of the billions of taxpayer dollars at state,...but the disclosure would serve well one of Treasury's stated reasons for the program in the first place: the promotion of "price discovery" in the illiquid market. Treasury has indicated that it will not require such disclosure.
In the need to balance transparency...Treasury's default position should always be to require more disclosure rather than less...provide the American taxpayers as much information about what is being done with their money as possible. Unfortunately, in rejecting basic transparency recommendations, TARP has become a program in which taxpayers (1) are not being told what most of the TARP recipients are doing with their money, (ii) have still not been told how much their substantial investments are worth, and (iii) will not be told the full details of how their money is being invested....
Imposition of Information Barriers, or "Walls," in PPIP: we noted conflicts of interest and collusion vulnerabilities were inherent in the design of PPIP...PPIF managers will have significant power to set prices in a largely illiquid market...PPIF managers having an incentive to overpay significantly for assets or otherwise using the valuable, proprietary PPIF trading information to benefit not the PPIF, but rather the manager's non-PPIF business interests. We made recommendation to impose strict conflicts of interest rules....Treasury adopted many of the recommendations...HOWEVER, Treasury has declined to adopt on of our most fundamental recommendations - the requirement for imposition of an informational barrier or "wall" between the PPIF fund managers making investment decisions on behalf of the PPIF and those employees of the fund management company who manage non-PPIF funds. Treasury has deceided not to impose such a wall...despite that it has been done in other Government bailout-related programs...the risk is the reputational risk that Treasury could face if a PPIF manager should generate massive profits in its non-PPIF funds as a result of an unfair advantage...leaving Treasury vulnerable to an accusation that has already been leveled against it...that Treasury is using TARP to pick winners and losers...benefiting a chosen few at the expense of the dozens of firms that were rejected, of the market as a whole, and of the American taxpayer...putting in jeopardy the fragile trust the American people have in TARP and the government.
Pages 5 - 8
Discussion that $643.1 billion of the $700 billion will be spent in 12 programs. To date, $643.1 billion has been committed, $441 billion has actually been spent. There is a chart on page 6 of Total Potential Funds Subject to SIGTARP Oversight as of June 30, 2009. On page 7 is a chart of Incremental Financial System Support, by Federal Agency.
Details the Special Inspector General's Investigations Division and the misdeeds of programs around the country who have taken client's monies while falsely identifying themselves as TARP.
Through June 30, 2009, SIGTARP has 35 ongoing criminal and civil investigations. These investigations include complex issues concerning suspected accounting fraud, securities fraud, insider trading, mortgage servicer misconduct, mortgage fraud, public corruption, false statements, and tax investigations. Two of SIGTARP’s investigations have recently become public: [see the list inside the document below
Page 9
Future Audits - Assessment of use of fund by TARP recipients, including the Making Home Affordable Mortgage Modification Program
Page 9 and 10
[We're told how the IG's office is putting people to work in America - expecting that final number to be 160 new hires] [That's 160 people just to watchdog the hundreds already being paid to do so, including Joe Biden] SIGTARP did not know their own budgetary needs when the FY2010 budget was put together, and have asked for a budget of $23,300,000.00. THAT'S TWENTY THREE MILLION, THREE HUNDRED THOUSAND DOLLARS!
[Don't get me wrong, the Inspector Generals are the good guys in this scenario and if they can make Treasury be transparent, and then put those in prison who deserve to be in prison, if and when fraudulent and criminal, then $23,300,000.00 is a bargain, I guess.]Page 10
Ends with making nice and saying that basically Treasury has cooperated with SIGTARP's information requests - AND while SIGTARP and Treasury have disagreed "vociferously,"...SIGTARP believes that Treasury has engaged actively in consulting with SIGTARP about it's concerns. [Problem is, as you can see above, Treasury has consulted and then rejected the consultations.]
Follows Statement of Neil Barofsky, Special Inspector general Troubled Asset Relief Program:
Barofsky Testimony
FOR OFFICIAL USE ONLY UNTIL RELEASED BY THE HOUSE COMMITTEE ON FINANCIAL SERVICES SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS STATEMENT OF NEIL BAROFSKY SPECIAL INSPECTOR GENERAL TROUBLED ASSET RELIEF PROGRAM BEFORE THE HOUSE COMMITTEE ON FINANCIAL SERVICES SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS July 22, 2009 Chairman Moore, Ranking Member Biggert and Members of the Committee, I am honored to appear before you today to deliver to this Committee my quarterly report to Congress. In the nine months since the Emergency Economic Stabilization Act of 2008 (“EESA”) authorized creation of the Troubled Asset Relief Program (“TARP”), the U.S. Department of the Treasury (“Treasury”) has created 12 separate programs involving Government and private funds of up to almost $3 trillion. From programs involving large capital infusions into hundreds of banks and other financial institutions, to a mortgage modification program designed to modify millions of mortgages, to public-private partnerships using tens of billions of taxpayer dollars to purchase “toxic” assets from banks, TARP has evolved into a program of unprecedented scope, scale, and complexity. Moreover, TARP does not function in a vacuum but is rather part of the broader Government efforts to stabilize the financial system, an effort that includes dozens of inter-related programs operated by multiple Federal agencies. WARRANTS Pursuant to one of the initial TARP programs, the Capital Purchase Program (“CPP”), Treasury allocated $250 billion to provide funds to qualified financial institutions to build capital, increase the flow of financing, and support the economy. As of March 2009, Treasury forecast spending only $218 billion in this program. The economic terms of the CPP transactions were that, in exchange for the TARP infusions, Treasury received senior preferred stock of the banks that pays a 5% dividend for five years and 9% thereafter. Consistent with the terms of EESA, Treasury also received warrants – option to purchase additional stock. For publicly traded banks, Treasury received warrants of common stock; for privately held banks, Treasury received warrants for additional preferred shares, which were immediately exercised. As banks repurchase their CPP investments, they have the option to purchase the warrants. How those warrants are valued is an important matter that greatly affects the taxpayers’ return on these investments. As a part of SIGTARP’s oversight efforts, we have been coordinating our efforts with other agencies to avoid duplication, and it has been my pleasure to work with my co-panelist from the Government Accountability Office (“GAO”), Thomas McCool, and with the Congressional Oversight Panel (“the Panel”), chaired by co-panelist, Professor Elizabeth Warren. As a part of this coordination, on June 10, 2009, SIGTARP entered into a special coordinated effort with the Panel to examine the pricing of warrants in the context of the return of CPP funds by TARP-recipients. The Panel issued a July 10, 2009, report valuing the warrants that Treasury had bought to date. SIGTARP plans to conduct an audit of the warrant repurchase/sale process and will have the benefit of the Panel valuations as context. SIGTARP’s audit will examine several key questions, including exanimation of the process Treasury has established to value the warrants for re-purchase, whether Treasury follows a clear and consistent process in considering potentially differing valuations of warrants, and the extent to which Treasury has established an objective basis for its ultimate valuation decisions. SIGTARP, if appropriate, will issue recommendations with the report of this audit. OTHER AREAS OF INTEREST SIGTARP has made a variety or recommendations concerning the TARP program and has worked hard to advance the general understanding of the TARP. With respect to recommendations, one of SIGTARP’s most important oversight responsibilities is to provide recommendations to Treasury so that TARP programs can be designed or modified to facilitate effective oversight and transparency and to prevent fraud, waste, and abuse. SIGTARP’s reports detail these recommendations and provide updates on their implementation. Two categories of recommendations, however, are worth highlighting in particular: Transparency in TARP Programs Although Treasury has taken some steps towards improving transparency in TARP programs, it has repeatedly failed to adopt recommendations that SIGTARP believes are essential to providing basic transparency and fulfill Treasury’s stated commitment to implement TARP “with the highest degree of accountability and transparency possible.” SIGTARP’s July 21, 2009, Quarterly Report includes one new recommendation and there are several other additional unadopted recommendations from prior quarterly reports: • Use of Funds Generally: One of SIGTARP’s first recommendations was that Treasury require all TARP recipients to report on the actual use of TARP funds. Other than in a few agreements (with Citigroup, Bank of America, and AIG), Treasury has declined to adopt this recommendation, calling any such reporting “meaningless” in light of the inherent fungibility of money. SIGTARP continues to believe that banks can provide meaningful information about what they are doing with TARP funds — in particular what activities they would not have been able to do but for the infusion of TARP funds. That belief has been supported by SIGTARP’s first audit, in which nearly all banks were able to provide such information. Valuation of the TARP Portfolio: SIGTARP has recommended that Treasury begin reporting on the values of its TARP portfolio so that taxpayers can get regular updates on the financial performance of their TARP investments. Notwithstanding that Treasury has now retained asset managers and is receiving such valuation data on a monthly basis, Treasury has not committed to providing such information except on the statutorily required annual basis. Disclosure of TALF Borrowers Upon Surrender of Collateral: In TALF, the loans are non-recourse, that is, the lender (Federal Reserve Bank of New York) will have no recourse against the borrower beyond taking possession of the posted collateral (consisting of assetbacked securities (“ABS”)). Under the program, should such a collateral surrender occur, TARP funds will be used to purchase the surrendered collateral. In light of this use of TARP funds, SIGTARP has recommended that Treasury and the Federal Reserve disclose the identity of any TALF borrowers that fail to repay the TALF loan and must surrender the ABS collateral. Regular Disclosure of PPIF Activity, Holdings, and Valuation: In the PPIP Legacy Securities Program, the taxpayer will be providing a substantial portion of the funds (contributing both equity and lending) that will be used to purchase toxic assets in the Public- • • • Private Investment Funds (“PPIFs”). SIGTARP is recommending that all trading activity, holdings, and valuations of assets of the PPIFs be disclosed on a timely basis. Not only should this disclosure be required as a matter of basic transparency in light of the billions of taxpayer dollars at stake, but such disclosure would also serve well one of Treasury’s stated reasons for the program in the first instance: the promotion of “price discovery” in the illiquid market for MBS. Treasury has indicated that it will not require such disclosure. Although SIGTARP understands Treasury’s need to balance the public’s transparency interests, on one hand, with the interests of the participants and the desire to have wide participation in the programs, on the other, Treasury’s default position should always be to require more disclosure rather than less and to provide the investors in TARP — the American taxpayers — as much information about what is being done with their money as possible. Unfortunately, in rejecting SIGTARP’s basic transparency recommendations, TARP has become a program in which taxpayers (i) are not being told what most of the TARP recipients are doing with their money, (ii) have still not been told how much their substantial investments are worth, and (iii) will not be told the full details of how their money is being invested. In SIGTARP’s view, the very credibility of TARP (and thus in large measure its chance of success) depends on whether Treasury will commit, in deed as in word, to operate TARP with the highest degree of transparency possible. Imposition of Information Barriers, or “Walls,” in PPIP In the April 21, 2009, Quarterly Report, SIGTARP noted that conflicts of interest and collusion vulnerabilities were inherent in the design of PPIP stemming from the fact that the PPIF managers will have significant power to set prices in a largely illiquid market. These vulnerabilities could result in PPIF managers having an incentive to overpay significantly for assets or otherwise using the valuable, proprietary PPIF trading information to benefit not the PPIF, but rather the manager’s non-PPIF business interests. As a result, SIGTARP made a series of recommendations in the April Quarterly Report, including that Treasury should impose strict conflicts of interest rules. Since the April Quarterly Report, Treasury has worked with SIGTARP to address the vulnerabilities in PPIP, and SIGTARP made a series of specific recommendations, suggestions, and comments concerning the design of the program. Treasury adopted many of SIGTARP’s suggestions and has developed numerous provisions that make PPIP far better from a compliance and anti-fraud standpoint than when the program was initially announced. However, Treasury has declined to adopt one of SIGTARP’s most fundamental recommendations — that Treasury should require imposition of an informational barrier or “wall” between the PPIF fund managers making investment decisions on behalf of the PPIF and those employees of the fund management company who manage non-PPIF funds. Treasury has decided not to impose such a wall in this instance, despite the fact that such walls have been imposed upon asset managers in similar contexts in other Government bailout-related programs, including by Treasury itself in other TARPrelated activities, and despite the fact that three of the nine PPIF managers already must abide by similar walls in their work for those other programs. If nothing else, the reputational risk that Treasury and the program could face if a PPIF manager should generate massive profits in its non-PPIF funds as a result of an unfair advantage, even if that advantage is not strictly against the rules, justifies the imposition of a wall. Failure to impose a wall, on the other hand, will leave Treasury vulnerable to an accusation that has already been leveled against it — that Treasury is using TARP to pick winners and losers and that, by granting certain firms the PPIF manager status, it is benefitting a chosen few at the expense of the dozens of firms that were rejected, of the market as a whole, and of the American taxpayer. This reputational risk is not one that can be readily measured in dollars and cents, but is rather a risk that could put in jeopardy the fragile trust the American people have in TARP and, by extension, their Government. TARP in Context During the last 36 hours there has been considerable media coverage and interest in section 3 of SIGTARP’s July Quarterly Report, which attempts to place the TARP into context in terms of how it has evolved and of the greater government-wide effort. TARP, as originally envisioned in the fall of 2008, would have involved the purchase, management, and sale of up to $700 billion of “toxic” assets, primarily troubled mortgages and mortgage-backed securities (“MBS”). That framework was soon shelved, however, and TARP funds are being used, or have been announced to be used, in connection with 12 separate programs that, as set forth in Table 1 below, involve a total (including TARP funds, loans and guarantees from other agencies, and private money) that could reach nearly $3 trillion. Through June 30, 2009, Treasury has announced the parameters of how $643.1 billion of the $700 billion would be spent through the 12 programs. Of the $643.1 billion that Treasury has committed, $441 billion has actually been spent. TOTAL POTENTIAL FUNDS SUBJECT TO SIGTARP OVERSIGHT, AS OF 6/30/2009 ($ BILLIONS) Total Projected Funding at Risk ($) $218.0 ($70.1) Projected TARP Funding ($) $218.0 ($70.1) Program Capital Purchase Program (“CPP”) Brief Description or Participant Investments in 649 banks to date; 8 institutions total $134 billion; received $70.1 billion in capital repayments GM, Chrysler, GMAC, Chrysler Financial; received $130.8 million in loan repayments (Chrysler Financial) Government-backed protection for auto parts suppliers Government-backed protection for warranties of cars sold during the GM and Chrysler bankruptcy restructuring periods Purchase of securities backed by SBA loans Automotive Industry Financing Program (“AIFP”) 79.3 79.3 Auto Supplier Support Program (“ASSP”) 5.0 5.0 Auto Warranty Commitment Program (“AWCP”) 0.6 0.6 Unlocking Credit for Small Businesses (“UCSB”) Systemically Significant Failing Institutions (“SSFI”) Targeted Investment Program (“TIP”) Asset Guarantee Program (“AGP”) Term Asset-Backed Securities Loan Facility (“TALF”) Making Home Affordable (“MHA”) Program Public-Private Investment Program (“PPIP”) 15.0 15.0 AIG investment 69.8 69.8 Citigroup, Bank of America investments Citigroup, ring-fence asset guarantee FRBNY non-recourse loans for purchase of asset-backed securities Modification of mortgage loans 40.0 301.0 1,000.0 40.0 5.0 80.0 75.0 50.0 Disposition of legacy assets; Legacy Loans Program, Legacy Securities Program (expansion of TALF) Capital to qualified financial institutions; includes stress test Potential additional funding related to CAP; other programs 500.0 – 1,000.0 75.0 Capital Assistance Program (“CAP”) TBD TBD New Programs, or Funds Remaining for Existing Programs Total 131.4 131.4 $2,365.0 – $2,865.0 $699.0 Note: See Table 2.1 in Section 2 for notes and sources related to the information contained in this table. As massive and as important as TARP is on its own, it is just one part of a much broader Federal Government effort to stabilize and support the financial system. Since the onset of the financial crisis in 2007, the Federal Government, through many agencies, has implemented dozens of programs that are broadly designed to support the economy and financial system. In our most recent quarterly report, we summarize these programs and the total potential support to the financial system as of 6/30/09, there is approximately $3.0 trillion outstanding, $4.7 trillion is the total support to date, including money that has been paid pack and programs that have ended. In total, the potential federal support through all of these programs is approximately $23.7 trillion, as indicted below: INCREMENTAL FINANCIAL SYSTEM SUPPORT, BY FEDERAL AGENCY SINCE 2007 ($ TRILLIONS) Maximum Total Potential Current Balance Federal Reserve FDIC Treasury — TARP (including Federal Reserve, FDIC components) Treasury — Non-TARP Other: FHFA, NCUA, GNMA, FHA, VA Total $1.4 0.3 0.6 0.3 0.3 $3.0 Balance as of 6/30/2009 $3.1 0.3 0.6 0.3 0.3 $4.7 Support Related to Crisis $6.8 2.3 3.0 4.4 7.2 $23.7 Notes: Numbers affected by rounding. Amounts may include overlapping agency liabilities, “implied” guarantees, and unfunded initiatives. Total Potential Support does not account for collateral pledged. See the “Methodology for Estimating Government Financial Exposure” discussion in this section for details on the methodology of this chart. Other agencies include: FHFA, National Credit Union Administration (“NCUA”), Government National Mortgage Association (“GNMA”), Federal Housing Administration (“FHA”), and U.S. Department of Veterans Affairs (“VA”). For a full description of the backup for these numbers and the methodology for calculating them see Section 3 of our July Quarterly report. Oversight Activities of SIGTARP The oversight activities discussed above and all other SIGTARP efforts to date are detailed in SIGTARP’s reports dated February 6, 2009, 1 April 21, 2009,2 and July 21, 2009. Additionally, on July, 20, 2009, SIGTARP issued an audit report concerning how recipients of CPP funds reported their use of such funds.3 In February 2009, SIGTARP sent survey letters to more than 360 financial 1 See http://www.sigtarp.gov/reports/congress/2009/SIGTARP_Initial_Report_to_the_Congress.pdf. See http://www.sigtarp.gov/reports/congress/2009/April2009_Quarterly_Report_to_Congress.pdf. 2 3 See http://www.sigtarp.gov/reports/audit/2009/SIGTARP_Survey_Demonstrates_That_Banks_Can_Provide_Meaningfu_%20Information_On_Their_Use_Of_TARP_Funds.pdf. and other institutions that had completed TARP funding agreements through January 30, 2009. The audit report finds that, although most banks reported they did not segregate or track TARP fund usage on a dollar-for-dollar basis, they were able to provide insights into their actual or planned future use of TARP funds. For some respondents the infusion of TARP funds helped to avoid a “managed” reduction of their activities; others reported that their lending activities would have come to a standstill without TARP funds; and others explained that they used TARP funds to acquire other institutions, invest in securities, pay off debts, or that they retained the funds to serve as a cushion against future losses. In light of the audit findings, SIGTARP renews its recommendation that the Secretary of the Treasury require all TARP recipients to submit periodic reports to Treasury on their use of TARP funds. SIGTARP’s Investigations Division has developed rapidly and is quickly becoming a sophisticated white-collar investigative agency. Through June 30, 2009, SIGTARP has 35 ongoing criminal and civil investigations. These investigations include complex issues concerning suspected accounting fraud, securities fraud, insider trading, mortgage servicer misconduct, mortgage fraud, public corruption, false statements, and tax investigations. Two of SIGTARP’s investigations have recently become public: • Federal Felony Charges Against Gordon Grigg: On April 23, 2009, Federal felony charges were filed against Gordon B. Grigg in the U.S. District Court for the Middle District of Tennessee, charging him with four counts of mail fraud and four counts of wire fraud. The charges are based on Grigg’s role in embezzling approximately $11 million in client investment funds that he garnered through false claims, including that he had invested $5 million in pooled client funds toward the purchase of the TARP-guaranteed debt. Grigg pleaded guilty to all charges and is scheduled for sentencing on August 6, 2009. FTC Action Against Misleading Use of “MakingHomeAffordable.gov”: On May 15, 2009, based upon an action brought by the Federal Trade Commission (“FTC”), a Federal district court issued an order to stop an Internet-based operation that pretended to operate “MakingHomeAffordable.gov,” the official website of the Federal Making Home Affordable program. According to the FTC’s complaint, the defendants purchased sponsored links as advertising on the results pages of Internet search engines, and, when consumers searched for “making home affordable” or similar search terms, the defendants’ ads prominently and conspicuously displayed “MakingHomeAffordable.gov.” Consumers who clicked on this link were not directed to the official website, but were diverted to sites that solicit applicants for paid loan modification services. The operators of these websites either purport to offer loan modification services themselves or sold the victims’ personally identifying information to others. SIGTARP is providing assistance to FTC during the investigation. • More than 50% of SIGTARP’s ongoing investigations were developed in whole or in part through tips or leads provided on SIGTARP’s Hotline (877-SIG-2009 or accessible at www.SIGTARP.gov). Over the past quarter, the SIGTARP Hotline received and analyzed more than 3,200 tips, running the gamut from expressions of concern over the economy to serious allegations of fraud. Further, SIGTARP is in the process of completing audit reports concerning executive compensation restriction compliance, controls over external influences on the CPP application process, selection of the first nine participants for funds under CPP (with a particular emphasis on Bank of America), AIG bonuses, and AIG counterparty payments. In addition, SIGTARP is undertaking a series of new audits, as follows: • Follow-up Assessment of Use of Funds by TARP Recipients: This audit will examine use of funds by recipients receiving extraordinary assistance under the Systemically Significant Failing Institutions program, the Automotive Industry Financing Program, as well as insurance companies receiving assistance under CPP. Governance Issues Where U.S. Holds Large Ownership Interests: The audit, being conducted at the request of Senator Max Baucus, will examine governance issues when the U.S. Government has obtained a large ownership interest in a particular institution, including: (i) What is the extent of Government involvement in management of companies in which it has made sizeable investments, including direction and control over such elements as governance, compensation, spending, and other corporate decision making? (ii) To what extent are effective risk management, internal controls, and monitoring in place to protect and balance the Government’s interests and corporate needs? (iii) Are there performance measures in place that can be used to track progress against long-term goals and timeframes affecting the Government’s ability to wind down its investments and disengage from these companies? (iv) Is there adequate transparency to support decision making and to provide full disclosure to the Congress and the public? Status of the Government’s Asset Guarantee Program with Citigroup: The audit examining the Government’s Asset Guarantee Program (“AGP”) with Citigroup, based upon a request by Representative Alan Grayson, will address a series of questions about the Government’s guarantee of certain Citigroup assets through the AGP such as: (i) How was the program for Citigroup developed? (ii) What are the current cash flows from the affected assets? and (iii) What are the potential for losses to Treasury, the Federal Deposit Insurance Corporation, and the Federal Reserve under the program? Making Home Affordable Mortgage Modification Program: This audit will examine the Making Home Affordable mortgage modification program to assess the status of the program, the effectiveness of outreach efforts, capabilities of loan servicers to provide services to eligible recipients, and challenges confronting the program as it goes forward. • • • Operational Status Regarding SIGTARP’s operational status, we continue to filling out our ranks. As of July 20, 2009, we have hired 70 personnel, and have several new hires to begin over the coming weeks. Currently, SIGTARP’s senior and upper-level management ranks are for the most part in place, and, thus, we anticipate that hiring will proceed rapidly. SIGTARP’s efforts have been assisted by dual compensation and direct hire authorities that it has been provided via statute and regulation. We are very pleased with our progress, and we are confident that SIGTARP will achieve its current goal of approximately 160 full-time employees by the second quarter of FY 2010. Nonetheless, section 121(j) of EESA, as amended, provided $50 million for SIGTARP, but this figure will not be sufficient to fund SIGTARP’s activities through FY 2010. SIGTARP had not been established when Treasury submitted its initial FY 2010 budget request to the Office of Management and Budget (“OMB”), during the summer of 2008. Additionally, SIGTARP was not in a position to definitively project its FY 2010 needs when OMB reopened the FY 2010 budget in the early spring of 2009 (i.e., SIGTARP’s key management and budget personnel either had not yet been hired or had just arrived). Thus, SIGTARP was effectively precluded from submitting a substantive request for additional funds when the budget was reopened. SIGTARP, accordingly, submitted to Treasury a request for an amendment of the FY2010 budget request in the amount of $23,300,000. Cooperation In spite of accounts in the media, to date, Treasury has cooperated with SIGTARP’s information requests. Moreover, although SIGTARP and Treasury have disagreed, sometimes vociferously, over the design and implementation of TARP programs, SIGTARP believes that Treasury has engaged actively in consulting with SIGTARP about its concerns. Chairman Moore, Ranking Member Biggert and Members of the Committee, I want to thank you again for this opportunity to appear before you, and I would be pleased to respond to any questions that you may have.
President Obama says he sees a lack of humility among bankers today. He said the industry "should be more focused on products we're providing consumers. Let's make sure we're operating in a more secure, safe fashion." Weigh that against the Treasury's lack of humility and their complete failure to operate in a "more secure, safe fashion."
Rush has interesting commentary.
Who knew that MSNBC paid Keith Olbermann $4 million annually before his salary increase to $7.5 million - after the bailout, using your money and mine?
Hat tip to Erik Telford at Human Events.com: When is a Bailout Not a Bailout?
The $296 billion spent on World War II, America’s most expensive war, would be $4.1 trillion adjusted to today’s dollars, according to the CRS report from June.
The adjusted cost of the Civil War would be $60.4 billion for both the Union and the Confederacy combined. The inflation-adjusted cost of the Vietnam War would be $686 billion. The cost of the current Iraq war up to last June was $648 billion, while the adjusted cost for Afghanistan to that point was $171 billion.
The total cost of the American Revolution was a relatively inexpensive $1.8 billion.
World War II was financed by savings, the American people’s savings, when Americans bought war bonds,” said Olivier Garret, CEO of Casey Research, who analyzed the value of the bailout compared to the major U.S. wars and other major historical government expenses. “Today, families are in debt and government is in debt.
According to Bloomberg, the federal government has made commitments worth a total of $8.5 trillion in the bailouts of 2008. That includes actual expenditures as well as loan and asset guarantees.
My Senator, Jim Inhofe was on Cavuto yesterday. He said that Secretary Paulson lied to the people. After a quick recover, Cavuto queried: are you saying that Paulson to the country. Inhofe said "yes, he lied." In a speech on the Senate floor this week, Inhofe had this to say:
If you were a reasonable person and were to assume that a major event in the financial world has prompted the negotiations the led to the decision on releasing the second $350 billion, you would be wrong. The true reason Congress may be asked to release the second $350 billion is politics.
Again, no event in the financial world has prompted this request for $350 billion.
Read more from Inhofe, including his statement on the "letters of assurances" the government received from bailout-ees - "a bunch of promises on paper..." I don't know about you, but it is about time we call a lie a lie. It's not the politically correct thing to do, but it is the honest thing to do.
UK: Officials fear Gaza will "radicalise" British Muslims at Jihad Watch
Apparently the same way Iraq, dogs, and underwear ads tend to radicalize Muslims. If the latter are constantly crying "wolf" -- that is, if everything "offends," "enrages," and "radicalizes" them, if "cartoons" lead to riots and deaths -- exactly when should the world take Muslim complaints seriously?
"Ministers voice fears Gaza will radicalise British Muslims," from AFP, January 12:
LONDON (AFP) — Government ministers expressed concern Monday that Israel's military campaign in Gaza was radicalising Muslims in Britain.
Communities Secretary Hazel Blears said she was "very concerned" that the conflict could help extremists, and justice minister Shahid Malik warned it was having a "profoundly acute and unhealthy" effect on Muslim communities here. Read more at Jihad Watch, including a statements sent to PM Gordon Brown by members of a moderate Muslim organization.
Muslims in Britain are definitely angry, and aren't they always? In fact, they are angry enough to threaten high profile Brits with beheading, including Madonna and Amy Winehouse's producer as well as others. Online Islamic forums are heated, and are the vehicle for the violent threats (beheading)..and guess what, some British taxpayer pounds support these al-Qaeda organized forums, all in the name of tolerance.
Simply Jews has up two videos. The second has been around the web for a few days. It's excellent, but the first video is sobering. Watch a Palestinian wedding celebration in the streets of Gaza. The music is playing, the men are dancing, an Arab is narrating in perfect English. More music, and now here comes Hamas in their trucks. They charge down the street and they begin the murders. They beat the head of the groom and kill him...shooting their own people yelling allah akhbar!
The narrator asks: if Hamas are Palestinians, why are they killing Palestinians? Why are Muslims not saying death to Hamas?
The narrator asks: Why did Palestinians dance in street to celebrate 9/11/2001 (there's footage of the 9/11 celebrations in this video), but they kill their own people for dancing and celebrating a wedding? The answer, the narrator says: Palestinian leaders want their people to be sorry, to cry. The question again: Why would the Palestinians not rise up against Hamas? I hope you will take a few minutes to watch this video at Simply Jews.
I caught a few minutes of the new Hannity show tonight. 24 was on so I was checking in during 24 commercials. Monica Crowley was a guest. Hannity was reporting on Prince Harry's latest scandal: a video showing the Prince talking with a military mate before deploying to Afghanistan. The friend had a cloth over his head and horror of horrors, Harry told the friend he looked like a "raghead," and worse, he referred to someone as a "Paki." I've been hearing about this all day, it's the top story in London - "massive outrage" is being reported - nevermind that Islamic forums are threatening to behead some of their fellow Brits.
Anyway, Monica Crowley was expected to be offended by Harry's comments. She usually does not disappoint, and she didn't this time. I will have to paraphrase, but she said something like:
"hey, he's young, he was preparing for war, this what warriors do. I've had enough of the feminization of males."
Oorah, Monica.
IsraPundit reports on a conference call, One Jerusalem, for bloggers with Benjamin Netanyahu: Gaza is a frontline battle between Militant Islam and the rest of the world. With elections in Israel scheduled for early February, and Netanyahu, the Likud party leader hoping to be Israel's next Prime Minister, a Washington Times columnist asked this question:
Is this battle a local affair or a battle on behalf of the West?”
IsraPundit writer, Jerry Gordon (The Iconoclast):
I asked Netanyahu whether the conflict in Gaza has finally ended the peace process begun with Oslo for a Two State solution leading to a Palestinian state. He replied that Israel must first re-establish security in the area. It might assist in shoring up moderates among West Bank Palestinians with economic enterprises and programs. However, he was convinced that any final peace settlement was not realistic. As he put it, “you cannot build on the apex of a pyramid; rather you must build a firm base.
Read the full article, including Netanyahu's comments on unilateral withdrawal from Gaza at IsraPundit.
If you haven't heard the story of the Norwegian doctor who was complicit in faking the death of a boy in Gaza, while the camera rolled, Confederate Yankee has some excellent commentary, along with the video showing someone performing CPR, badly, on the young "Israeli victim." CNN bought it hook, line and sinker. It was all a lie and a sham. Note: The "brother" was filming. Said he received "a call" saying that his brother had been killed when their house was born. How are cell phones working amid the destruction in and around Gaza City?
Amerisrael says that diplomats are attempting to put Fatah back into power in the Gaza Strip. "Swapping out one terror group for another." After the Hamas grab of the Gaza Strip, Fatah has been seen as more "moderate" toward Israel, but make no mistake, what they say about Israel, they do mean. Their constitution still calls for death to Israel. Amerisrael.
John Kerry's debacle: He finally made Senate Chair of the Foreign Relations Committee:
Now Mr. Kerry’s first hearing as chairman on Tuesday will be to consider the nomination of Mrs. Clinton, the woman he did not endorse for president, to the premier cabinet position in the administration of the man he did back. It cannot be the outcome he had in mind.
As I watched Barack Obama’s latest press conference I kept going back to my impressions of him during the campaign - he looks like a student. Not exactly a big confidence builder. I was reminded of a piece Allen wrote a while ago - He’s not a bad man, he’s just stupid.
Sadly, it seems Mr. Obama is worse than the old snake oil salesman. He’s even worse than Bernard Madoff. At least Madoff’s victims all willingly signed up for the too-good-to-be-true. Fifty-seven million Americans didn’t sign up for Mr. Obama’s programs, nor did our children or grandchildren, but we will all be stuck paying the tab for decades to come. Michelle Malkin nailed it when she called his proposed stimulus package The Generational Theft Act of 2009.
Obama’s line about seeking out Marxist professors also sticks in my mind.
I’ve never heard a quote where he said to balance the Marxists he sought out supply-side economics professors, of the FA Hayek ilk. While dreaming up his grand plans to control the economy, does he ever take the time to read economic theory that’s counter to the Marxists?
He made sure he mentioned that he inherited the $1.2 trillion deficit. No reporter thought to ask him why he didn’t do something about that while he was a voting member of the US Senate. The last time I checked Congress controls the purse strings, the President just signs spending bills when they land on his desk.
It also would have been nice if a reporter had asked whether the $700 billion TARP program is included in the $1.2 trillion deficit, and if it’s included, whether they’re accounting for the revenue to the Treasury that program is generating. They’ve already realized a gain of $8 billion or 4%. According to the Wall Street Journal “if you annualize TARP’s return on the assumption that it will continue to succeed, it would add up to a roughly 16% return on that initial $200 billion investment a year.”
Sure, Obama’s promising more “investment”.
But what will he invest in? Unproven green technology that may be more expensive than current technology? 600,000 government jobs? He said the deficit will expand into the trillions (note this is plural of trillion) in the months to come. From what I’ve heard, it sounds more like he plans to just spend, not invest, a great deal of our money.
Finally, the media could have redeemed themselves by asking whether his constant attacks on the US economy over the past year or two could possibly have had anything at all to do with the current situation. Think about it. Americans were hearing for months and months that our economy was failing. Responsible Americans stopped spending money and started saving.
What happens when we stop spending our money on goods and services?
What Mr. Obama doesn’t seem to understand is that the more money Americans have in our pockets the more we spend. In other words, when we use the fruits of our labor to purchase things we desire we are ”spreading the wealth around.”
What happens when politicians promise small business owners that their taxes are going to increase? They lay people off. They stop “spreading the wealth around.” Unless Mr. Obama starts to understand these simple principles we, our children and the children who are yet to be born are in for a world of hurt.
Twenty-two pounds of UAW contract, that's...22 pounds! That's what The Intellectual Redneck says, and he also says there's little in those pages "regarding efficiency and competitiveness."
For more, read his commentary AND the contract.
Cross posted by Findalis of Monkey in the Middle
From Act for America
The news that AIG is now promoting Shariah-compliant products in America is spreading fast. Our friend and colleague Jeffrey Imm has been writing about this for some time now. His commentary below provides additional insight into this situation.
In his commentary he urges us, as taxpayer owners of AIG, to make our disapproval of AIG's entanglement with Shariah known. We agree. Because of the government bailout of AIG we are all "shareholders" now.
There are two things you can do.
First, read Mr. Imm's commentary below. Second, either call AIG or sign the online petition - or both. The preferred course of action is to place a phone call. If you can't make the time to call today, do so on Monday or Tuesday next week.
There are two people we can call. Peter Tulupman is AIG's Public Relations Manager. His number is 212.770.3141. Jim Crain is listed on AIG's press release as the person to call for more information about the Shariah-compliant insurance now being offered. Mr. Crain can be reached at 617.345.4105. When you call please be respectful but unequivocal in expressing your strong disapproval with how AIG is entangling itself with Shariah.
AIG needs to hear from us. Thousands of calls into AIG will not only send a message to AIG, it will send a message to other companies that are considering or beginning to wade into the morass of Shariah-compliant finance.
Let's do what we do best! ACT! today!
AIG Defies U.S. Taxpayers by Promoting Sharia in America
For the third month in a row, AIG is in the news regarding its promotion of Sharia-compliant finance (SCF) products, which promote the Islamic supremacist, segregationist ideology of Sharia. For a company struggling with its financial survival, it remains astounding that AIG would want to incite its American taxpayer owners by promoting products that are based on an Islamic supremacist political ideology.
In October 2008, I wrote how the U.S. government gave an $85 billion loan to AIG, without demanding divestment of its business ventures reselling Sharia mutual trusts and its AIG Takaful division selling Sharia-based insurance. November 2008, I wrote about how the U.S. government purchased $40 billion in AIG stock, making you as a taxpayer, an owner of a company promoting Sharia through such businesses.
For two months, I have warned that AIG's Takaful division was planning to expand to offer such AIG-specific Sharia products here in the United States. Now AIG has announced that it has Sharia-based insurance products for the United States, and AIG is promoting them.
On December 1, 2008, AIG announced that it was "introducing a Takaful Homeowners Policy, the first installment in Lexington Takaful Solutions, a series of Shari'ah-compliant (Takaful) product offerings in the U.S. The newly announced Takaful products are compliant with key Islamic finance tenets and based on the concept of mutual insurance." Note that AIG indicates that such Sharia insurance products are the "first installment" in a series of Sharia products.
In the AIG press release, AIG Takaful's Abdallah Kubursi expresses his pride in AIG's ability to promote Sharia within the United States, stating "This is truly a global effort on the part of AIG."
This is our company, using our taxpayer dollars, to promote Islamic supremacist Sharia-based products in our country. As we are $40 billion owners in AIG, this is our problem as Americans. What is our government and AIG going to do about this?
First, let's remember what Sharia is and is not.
Sharia is a legal codification of the political ideology of Islamic supremacism. This Sharia legal codification is intended to enforce discriminatory and segregationist practices against women and non-Muslims and to suppress the liberties of those living in Islamic theocracies. As a legal codification of a supremacist ideology, Sharia is incompatible with democratic values and the inalienable human right that "all men are created equal."
In 2001, nearly two months before the 9/11 attacks, the European Court of Human Rights determined that Sharia law was incompatible with democracy and human rights. The President of the European Court of Human Rights stated that "the Court found that sharia was incompatible with the fundamental principles of democracy as set forth in the Convention... Principles such as pluralism in the political sphere or the constant evolution of public freedoms have no place in it. According to the Court, it was difficult to declare one's respect for democracy and human rights while at the same time supporting a regime based on sharia...". Even British courts have ruled that Sharia is "discriminatory."
In a nation such as the United States, based on the inalienable human rights of equality and liberty, why would American taxpayers seek to fund a business selling products that promote a discriminatory, segregationist, and supremacist ideology that is "incompatible with democracy and human rights"?
Sharia is not merely "cultural beliefs," "religious beliefs," or "social preference." In the AIG press release, AIG's Abdallah Kubursi would have Americans believe that the goal of promoting such Sharia products is to expand "social preference." But America has rejected those who would label supremacist values as "social preference," just as they rejected white supremacists who once called for racial segregation and discrimination. America's society, businesses, government, and law rejects supremacist ideologies.
Just ask President-Elect Barack Obama.
This is the same Sharia ideology that has been used by the Islamic supremacist Taliban to murder those who they believe have committed moral crimes, the same Sharia ideology that was used to murder a 13 year old girl last month who was raped in Somalia, and the same Sharia ideology supported by the Taliban, Al Qaeda, and Islamic supremacists around the world. It is the same Sharia ideology whose zakat charities have been used to fund jihadist terrorist organizations. On September 18, 2008, Congressman Tom Tancredo's office introduced "Jihad Prevention Act" (H.R. 6975). According to the press release from his office on this bill, "the legislation would make the advocacy of Sharia law by radical Muslims already in the United States a deportable offense."
But now American taxpayer dollars are being used to promote products based on Sharia?
In fairness to AIG, there are many who do not understand the political Islamic supremacist nature of Sharia.
Stop Sharia Now (FAQ item 17) provides a quote regarding an "Islamic Finance conference" in New York City where an attendee asked the meaning of Sharia. One of AIG's Sharia advisors, Sheik Nizam Yaquby, ambiguously responded by stating that "Shariah is the path on which we walk, the water which we drink." Those of us who are aware that Sharia is a legal codification for all aspects of Islamic supremacist life grasp what Yaquby was trying to communicate; certainly none of the supremacist aspects of Sharia was communicated by Yaquby. It is then reported that "Not one person in the room followed up with a question. The group went back to looking at flowcharts and graphs." So it should be little surprise that few people involved with Sharia finance products actually understand the ramifications of promoting Islamic supremacist Sharia.
To give AIG an opportunity to respond to this, I called the individual listed on AIG's press release for its Sharia Takaful Homeowners Policy, Jim Crain, and talked to him about the AIG product. My impression is that AIG's Jim Crain is a businessman, and I got the distinct feeling that he was uncomfortable with being named as the AIG point of contact on a product with political connotations.
I told AIG's Jim Crain about the online petition signed by over 100 individuals calling for the Federal Reserve Board and the Department of Treasury to call for AIG to divest itself of its Sharia businesses. I also told AIG's Jim Crain about how the Islamic supremacist Taliban and other groups are seeking to promote Sharia.
AIG's Jim Crain told me that he had no comment on AIG's Sharia product linkage to the Islamic supremacist Sharia ideology, but stated that with "this business venture" it was not AIG's intent "to enter into the political arena at all." Jim Crain stated that he did understand that Sharia is viewed as a political ideology, and commented "that is becoming more apparent as the days go on." (I would conclude from this that I was not the first person who has called Jim Crain about this.) He stated that "it is entirely possible" that the public is going to think that AIG is taking a political position that is pro-Sharia. Jim Crain concluded our discussion by stating "I am going to pass your concerns on to our senior management and legal."
Now it is your turn. American taxpayers own $40 billion worth of AIG stock. This is your company and your responsibility to contact AIG about both its Sharia finance businesses and its efforts now to promote Sharia-based insurance in the United States.
Let AIG's Jim Crain know that the calls he has gotten thus far complaining about AIG's Sharia based business is the tip of the iceberg. Jim Crain's phone number and email address are provided on the AIG press release to discuss AIG's Sharia-based Takaful Homeowners Policy. Let him know precisely what you think of it as a shareholder in AIG, and ask Jim Crain to make certain that his senior management also is aware of your concerns as well.
Sign our online petition demanding that the Federal Reserve, Securities Exchange Commission, and Department of Treasury carry out their fiduciary responsibilities under H.R. 1424 to act as the Financial Stability Oversight Board in America's interest - and demand that AIG divest itself now of its Sharia businesses. This is an opportunity to make American commitment to human rights a part of how companies do business in America.
It is our responsibility to let AIG know our concerns.
Let's make our voices heard on this outrage, just as we would if AIG was offering a white supremacist financial products, black supremacist financial products, or any other products or services linked to a supremacist ideology. We need to make our voices heard because supremacism is fundamentally against the inalienable human rights of equality and liberty, as defined in America's Declaration of Independence... and declaration of our identity as well. By the very definition of America, we are responsible for equality and liberty, and we are responsible for confronting Islamic supremacism.
From Monkey in the Middle:
AIG received billions in a bailout from the US Taxpayers. This was to help keep it in business, not perpetuate a scam that will cost the US Taxpayers even more money. Shar'ia financing is one of the biggest scams that has come along in years. Banks are running towards it knowing that if they go under because of it, the US Government will just bail them out again.
We must finally take a stand and say NO! This is not acceptable to us. Not when your bank is facing ruin. Not when the US taxpayer is throwing money at you. Not now, not ever!
Sign the petition and call today!
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