Category Archives: Government Bailout

Mitt Romney Gave Bonuses In Order To Deplete Bain’s Cash, & Get Federal Bailout

You want bonuses, Wall Street style? Here are the ones Mitt Romney handed out at Bain in order to extort a government bailout for a failing company. It’s simply unbelievable. Tim Dickinson of RollingStone writes about it in an Aug. 29 column, having deciphered over 500 pages, heavily redacted, from Freedom Of Information Act (FOIA) requests concerning Bain, in the early 1990s when Mitt Romney was working there for the second time.

This is after Romney was given his little berth at Bain Capital. The parent company, Bain & Co., asked Romney to step back in and handle restructuring Bain’s considerable debt. This was 1991, and Bain was doing horribly, and putting Romney in charge did not solve things; the negotiations he attempted with their creditors were not successful. The creditors, you know, just wanted to be paid.

Therefore — since the FDIC had a significant stake in Bain — Romney threatened to basically ruin the company if the government didn’t help them out with money. He told the FDIC and the other companies Bain owed money to that he planned to hand out very large bonuses to the executives and management, thus depleting the cash reserves, if all the creditors would not agree to reduce Bain’s debt by 65%. He wanted to pay just 35 cents on the dollar of what Bain owed.

According to the paperwork, Romney was permitted to hand out bonuses regardless of performance.

And the debt-restructuring agreement said ALL the creditors had to say a change to 35 cents on the dollar was okay, or he’d carry out his bonus plan.

But a few of the creditors thought it was a bluff, and they called it. They refused. So he gave out bonuses large enough to alarm analysts, who advised the federal government that they believed Bain was headed for trouble.

Matt Taibbi, also in RollingStone, explains Romney’s business actions: Mitt was “looting the cash reserves.” Interesting that he did this as a general strategy and not simply when in takeover mode against another firm. In this instance, it was the serious, adult version of a child threatening to hold his breath until he gets what he wants. When adults do it, they’re typically threatening to blow up something. And Romney was threatening to destroy Bain if the government didn’t step in and take care of them financially.

That first threat did not achieve what he’d wanted. So he tried again, announcing he’d do another bonus round of cash to management if all Bain’s creditors didn’t agree to — a new amount — 30 cents on the dollar for what Bain owed. As was evident in the documents, the FDIC was facing significant losses to the value of their piece of Bain. Analysts told the federal government that at this point in time (Aug. 1992) that Bain had defaulted on the revenue targets of the loan agreement they had, and was headed toward bankruptcy. They said Bain & Company had “no value as a going concern.”

Bain got its bailout, of $10 million, and it is difficult to believe the FDIC didn’t pressure the other creditors to sign on to the debt agreement, in which Bain only had to pay its creditors 30 cents on the dollar. Because by this time Romney had already awarded that second round of bonuses.

He’d just extorted the U.S. government successfully.

It’s a Wall Street Bonus: SEC and Big Banks Get Airport Pat-Down From Matt Taibbi.

Wall Street banks and the SEC officials pretending to regulate them may as well have had the colostomy bags ripped off them, shoved in their faces and told, “explain this!” — airport style. That’s the thought

SEC should be examined thoroughly

I had after reading Matt Taibbi’s new column in RollingStone. It is so worthy it should be read multiple times and tweeted and all that.

The SEC, it seems, has been destroying the documents of a case anytime the matter or complaint does not become a full investigation. Called out on it, now they are trying to deny and cover up that they’ve been doing it.

Taibbi’s revelations are amazing since much of them relate to whistleblower Darcy Flynn, who still cannot speak to the press. Flynn is an SEC attorney who was appointed to oversee documents which, he discovered, are regularly destroyed at the SEC as soon as the case relating to them isn’t upgraded to a full investigation. The destruction of such preliminary documents happens to be illegal, but it had become standard procedure. Senator Charles Grassley is currently trying to get answers about it from them.

Preliminary investigations over the last few years, include such familiars as: Goldman Sachs, Bernie Madoff, JPMorgan, Lehman Brothers, AIG, Deutsche Bank. Most of whom received government bailout funds.

And just why did those in particular not get investigated, when as we know, criminal activity was definitely taking place then, and resulted in the “cratering” (Taibbi’s favorite verb) of the economy just a little later? That of course can be answered with a picture of a revolving door, with SEC top people leaving and going straight to their new, very-well-paying jobs at JPMorgan or another bank, while the just-resigned head of said bank goes to his new job at the SEC. A few years later they or other individuals at same banks trade places. The relationship between the SEC and the Big Banks is that of friends, mentors, and future employers.

It’s not just the evils of who in particular got elected last. It’s a deeply-rooted weed in our government which has been growing for almost 2 decades, the era of the too-big-to-fail Big Banks.

Wall Street Bonus Pigs, and the Plague. Time Magazine’s pregnant women.

The recent Wall Street bonuses that Goldman Sachs, CIT, JPMorgan et al gave their top employees were from a syringe. They got vaccinations against the dreaded new H1N1 flu. Excuse me, but this means that now every time I write the name “Goldman Sachs” a pig will appear. Please excuse the delay while I conjure that pig up. *** goldman-sachs-pig2

Okay… And I solemnly swear that each time Goldman Sachs (oops, pig!)goldman-sachs-pig21 is mentioned by me that I will bring in the pig. This is the pig we own, the pig we are supporting.

Each of the major bailout corporations were given — by the CDC?!! — a supply of vaccine from around 200 to 1200 doses. Citigroup got the 1200.

I didn’t realize the too-big-to-fail banks’ staff consisted entirely of babies and pregnant women. Or are they all just over 80 or something?

Time Inc. and Sloan-Kettering in NYC also got the vaccine; I never knew that Time Magazine was a health care facility. Next time I get sick, maybe I should go there. And cough hard.

Are corporations a division of the community or something, that the CDC consults with to communicate with the general public, is this why they have distributed medicine to them? Are they part of the government? I have to think for a minute what I am a citizen of. Wait. Does the branching go: Nation… state….county…municipality/town…citizen — or is it: Nation…corporation…region….department…office cubicle…citizenworker?

Sorry for all the questions. I still have to learn to stop asking stuff. And I have to quit makin’ stuff up, while I’m at it.

Morgan Stanley said they were giving their whole supply (1000 doses) to area hospitals. Is there any confirmation, I wonder? You know how much we believe them these days. Believe, believe, believe.

So this is how it is now: Wall Street gets the lifesaving vaccines, gets the billions of dollars’ bailout. I read that Canada gave the vaccine to a hockey team, the Calgary Flames, AND their families, the day before local clinics had to stop giving it out to the at-risk groups because they ran out. I’m not sure how much more palatable this is. Hockey teams in Canada are the equivalent of Brad & Angelina, George Clooney, Miley Cyrus. All of whom probably already got the vaccination. Which is logical, on the government’s part because: Movie and TV celebrities are the people who keep us going to movies, watching TV, keep us buying consumer goods, all of which keeps us medicated materially and keeps us from doing other things, like changing our government dramatically.

I wonder if J.K. Rowling, the Englishwoman richer than Queen Elizabeth, has had the vaccine yet.

It’s a shame. These corporations have put us in the position of actually wishing their top staff would get sick. It’s not likely to happen; the Goldman Sachs (pig!) executives probably already received their shots, and vaccinations are pretty effective.

I never, ever thought we’d be here. Goldman (pig!)goldman-sachs-pig22, CITI, JPMorgan, AIG, and the Fannie siblings act openly giving these outrageous bonuses, unwarranted super-special health consideration the public does not get; they do everything so unabashedly! If we had the plague, all the bankers and brokers would simply leave the cities and go to their estates in green Florence, sing, and tell one hundred stories while we died! Do you realize that?

Does anyone wonder how brokers do on organ transplant lists?

We have been unable to persuade our swollen, dropsical Congress to do things like break up the banks, or add the regulation that should be there. Our president is asleep and dreaming, like Chthulhu in his house at R’lyeh. And pigs — I tell you — are flying.

Wall Street Journal Article on Prime Mortgage Defaulting.

Diverting from Wall Street Bonuses for a moment, let’s look at that article by Stan Leibowitz from the Wall Street Journal claiming that subprime mortgages didn’t fuel the economic meltdown.

The writer claims he’s made a study and “found” that it is negative equity, not subprime loans, that led to the majority of defaults on mortgages. He’s claiming that prime loans with no money paid down are the major culprit (putting the blame back on the borrower again. Giving the public a slap in the face, with love from the Big Banks.).

Yeah. But when a loan company makes you a prime loan and you pay no money down, they will usually then arrange a second loan on top of the first to provide for that money normally given as a down payment on a house. Countrywide, for instance, made this type of arrangement. (Because somehow many lenders still paid lip service to the money-down standard, while shedding every other standard along the way.) That second mortgage might be a subprime loan and the WSJ writer has not identified it either way.

Either way, the no-money-down mortgage is a liar loan. It was improper to approve it. And furthermore: Liar Loans have a much greater impact on this WSJ writer’s “study” than he will say, because liar loans are supposed to be those in which the lender failed to ascertain the real financial status of the borrower.

That isn’t really what they are. They are more often loans for which the lender MADE UP  the financial status of the borrower — as testified to by a whistleblower former employee of Ameriquest.  See the interesting video.

So that’s two parts of his stats I don’t believe.

Borrowers can borrow only what you lend them. We know who started the meltdown and profited from it. Wasn’t borrowers…

Bonus Time at Wall Street’s Goldman Sachs. Needing Diversion. Thinking About Elves.

Supersized Wall Street bonuses are planned by Goldman Sachs to be paid soon to their top executives and traders, bonuses exceeding last year’s and the year before. The moment I read about it, I

<I>Once again we may see stovepipe hats on Wall Street.</I>

Once again we may see stovepipe hats on Wall Street.

thought this decision was going to be undone by the provisions restricting TARP companies — since GS has not paid back the $10 billion it owes the U.S. But Goldman is NOT grouped among those handful of companies that received “extreme assistance”  on whom these restrictions lie. How handy!


No, they only received $10 billion, that’s all, and were laxly permitted to receive the complete value ($12.9 billion) of their credit default swaps from AIG — thus sending AIG into broke status — and special treatment at every step it has taken in recent years. GS is NOT being investigated for misrepresenting its financial status to its shareholders, although documents have emerged suggesting this very thing. Some would say those documents demonstrate it, not suggest it. 

So Goldman can go ahead and pay those bonuses, nothing much stopping them.

And now (according to one of the biggest Wall Street trade groups, the Securities Industry and Financial Markets Association (SIFMA), is going on the road with a niceness campaign to try to convince the public in some of the big cities that Wall Street doesn’t really suck.

They hired former assistants of Henry Paulson in this campaign. Are they really hoping, let alone expecting, to change the minds of the general public?

But …we know that the security industries suck. How can we blind ourselves to the fact that they suck? Because they actually suck.

A nice parade might work, for five minutes anyway. This level of distrust is difficult to sustain and it would be a nice break. After all, I already have to divert myself from grim reality with cartoons of honest sheriffs and other righteous inventions. For instance, I went to read to look at Sheriff Pony.


(Cut to: Diversion from Bleak Financial Reality.)

Sheriff Pony looks like the offspring of Quickdraw McGraw and Smurfette, when maybe Quickdraw had to go to France during the war. The Smurfs are French, in case you didn’t know.

<I>Quickdraw McGraw's Baby Mama?</I>

Quickdraw McGraw's Baby Mama?



I bet all the major elves are related.

The tribe of Smurfs, I’d guess, are foreign cousins of the Keebler elves, who everyone knows are ardent capitalists — almost as bad as the Ferengi. Both the Smurfs and the Keeblers practice magic. You know the song: “And they’re baked in magic ovens and there’s no fac-tory. Hey!”

I know what you’re about to ask…. What’s their connection with the Rice Krispie elves? Well, they’re the first cousins of the head Keebler elf, who entertains a rather low opinion of them. The Rice Krispie brothers, Snap, Crackle, and Pop, were sort of drifter artists who at last found work in the cereal industry to keep themselves from starving in the gutter. The Keeblers, by contrast, are very bourgeousie and successful. They love their magic ovens. They’re so smug.

Yeah, they’ve got work and they do not need to rub it in. 

All of a sudden I’m feeling sympathetic towards the Rice Krispie guys. And all these people lately, who are out of jobs.

I Hear the Cries of the Trust Fund Babies. AIG and Hank G.


So!  On Wall Street, we hear that $4.3 billion in stock was set aside for the retirement of some of the most highly-compensated managers at AIG.  And for continuation of their bonus lifestyle. Now, Hank Greenberg is being officially accused of stealing that fund.  From what I’ve read I wouldn’t put it past him.

Wait a minute.hank-g

How dare AIG set up a trust fund for management only? Even if it’s been government-owned only since last year, before that it was government-related and before that, it was still a public corporation. Can they do that?

A goddamn trust fund for the already rich. How… predictable.

That Wall Street Maurice Greenberg is one little sonofagun. His little pursed mouth looks like he’s trying hard to smile and keep his false teeth from falling out at the same time.

And the attorneys on either side: Boies, Greenberg’s lawyer, represented the Gore side in Bush vs. Gore in 2000. Well, he’s now obviously on the wrong side.  And then the other guy, Theodore Wells, defended Scooter Libby in his criminal trial. Why is he now representing AIG in a civil trial? 

Oh, right. Big business is all criminal. So he isn’t actually going out of his specialty. In fact, I’m not kidding. It looks like U.S. business today is composed of 95% theft, 4% poor judgement, and 1% advertising. 


The Relevance of Webcomics in a Post-Bailout World. Problems With Credit Cards.

Giving The Hairy Eyeball to Banking and Investment!200901123

Bonuses on Wall Street aren’t addressed specifically on webcomic, but the storyline of the site does follow a fantasy of mine about staging a revolution against the present order. There’s a little yellow guy in a red cape named Topato, who sails into the castle and tells the princess, “We’re overthrowing your father’s offensively incorrect idea of a democratic government, my lady. The rule of Law must be allowed to change with the times.”

Right out of my own fantasy mouth! And Topato’s friend, co-leader of the revolution  Sheriff Pony, says: “Princess Dongle, by removing your father from power we will be on the path to an equal society. No longer shall a minuscule elite class prey mercilessly upon a lackadaisical, overmedicated working class.”

Then Topato says: “It’s revolution o’clock…”200901124

I consider them both holy men.

I admit I overly enjoy several internet comics. Like According to Goats, when you do something impossible, like invert so you’re sucked into your own personal black hole, thus entering a different universe consisting only of yourself, what is left in this universe is: a Pop Tart. Either that or a kitten, since apparently they’re equivalent. 

But in this world, as we’ve seen, the U.S. government intervenes when it feels like it. Otherwise, AIG would now exist as a Pop Tart. (Or kitten.)

And the lots of many car dealerships would be rustling and meowing with — kittens! 

When we turn on TV, we’d get back-to-back-to-back commercials for toaster pastries during Bones and 30 Rock instead of ads for Jeeps, Fords, and other pieces of doomed metal. 

When Barney Frank opens his mouth to tell us how he’s protecting us in the overseeing of the bailout money, out will fall — a kitten!

Tim Geithner, when he gets hungry during meetings, will have no worries, because his pockets will miraculously be full of Toaster Strudels. (Which will make him very sticky. If he seems reluctant to shake hands, you’ll understand why.)

Eric Cantor will open his box of Lipton teabags to hand some out to his friends but will find only crushed crumbs of strawberry-frosted toaster pastries, mixed with kitten hairs.

Persons attending grass-roots protests of tax policy will discover neither grass nor root, only Pop-Tart policy with kitten tax.

(Images above from and used by permission of artist.) 


And now, shall we speak of Usury?

We are not speaking of simple moneylending, which Shylock engaged in.  I never saw any proof that Shylock charged an unreasonable interest. He just had to find some sort of career out of the usual since he was a Jew and not allowed to own land.

We are referring to interest that is above and beyond what humans should be paying, charging usurious rates of interest on money lent. The notion of creating wealth for yourself from thin air this way disgusted our forefathers. They had respect for manual work, for craftsmanship, for farming, etc. They did not care, on the other hand, for people who found ways of getting the fruit of others’ labor through capitalizing.

Dante put Usurers in the same circle of Hell as sodomites and others who engaged in “unnatural practices.” Labor was “natural,” lending was not.  The Roman Catholic Church considered it unearned income. So society was fairly prejudiced against lending to begin with; but as soon as economies began becoming more sophisticated (which happened in the Stone Age) it became a necesssary part of the whole. What was considered too high an interest to charge, then?

In past centuries, 10 percent often used to be a sort of cutoff. I don’t think it’s related to titheing. It’s just a number. For instance, British government in 1545 used to penalize lenders trying to charge more than that.

And today, ten percent seems to echo in many quarters, still, as an upper limit on consumer personal loans, but if you check laws for your state, they actually go all over the board. Some states don’t seem to even have a cap. And exceptions apply all over. Speaking of lending laws, why don’t credit cards fall under these laws completely? If the federal law states that a company may charge fees that are “legal” in the particular state the customer is in, how does it happen that I have the rates I do? Why are late payment penalties considered the same as interest and in what calculator does the penalty for a late $1 charge become $29 and still remain a legal percentage of the original charge? So a rate of 2900% is legal in my state? In any state??

Pardon. I seem to be foaming at the mouth. 

Ah, Capital One. Ah, BOA, ah Wells Fargo. If only we were free to change the terms of our contract with you at any time, as you are. We would cut our rates by 5 percentage points; forgive ourselves for, say, 2 late payments per year; eliminate monthly or yearly membership fees and replace them with a single joining fee. That seems fair. And for your past practices, we grant ourselves the right to walk up to you in the street and slap you in the face once without legal repercussions, or key your cars once, or merely harmlessly spit on you each and every time we see you.

Now, that’s what I call a contract. And it’s social!

I wouldn’t feel so strongly if we were also able to earn similar interest in your banks when you use our money, you see. Why is it okay for banks and other lenders to charge these incredible percentages but no ordinary customer can get anything like that in any sort of savings instrument? Savings accounts, money market accounts yields have fallen to one-half, one, or perhaps two percent in most cases.

I am waiting to hear what happens with the bill Chris Dodd has gotten past committee in the Senate, which at least halts the hikes in rates on credit cards “at any time, for any reason” but feel sure that the CC companies will do what they can to FIND reasons. 

Tomorrow among other things I might ponder the phone companies. The execs of those certainly get a lot of pay bonuses. And I will be annoying.

Don’t blame me; I get my orders from Sheriff Pony. 

He’s blue.

Wall Street’s Duplicitous Financial Products. My Sickness, and The Problem of Visiting The Underworld.


Wall Street Bonuses! Did you get yours yet? No? You must not work on Wall Street, then! You don’t matter in this world!

Down to business. 

I have to confess that I descended into the bowels of the earth yesterday, and visited the BileMaster. And I drank some of the brew he makes. It’s awful; tastes like quinine mixed with Gatorade. But you find you can’t stop drinking it, so I had a lot. **


Afterwards, your vision is tinged sort of greeny-yellow with red streaks running down it. Or maybe those red streaks are just the blood running into my eyes from the gash on my head. I don’t know how I got that. I don’t really remember what I did most of the evening. 

Today, I find I hate everything. Filth surrounds us. And everyone is a crook, I think. I look around and I see crooks on every side. Crooks, crooks, crooks….

I’m really sorry;  I don’t usually talk like this. It’ll take another day or so to get back to normal, so I’ll just get this off my chest and out of my system while I’m waiting to recover my usual sweet self and sunny outlook. So read this, you bastard!

Again — I’m sorry. Hard to control myself.



The President says it was “instant gratification” that fueled the bust of the economy? Not precisely. Instant gratification is to blame for the proliferation of the microwave, Tivo, millions of TV channels, and lots of other stuff like that. The growth of the economy is not equal to the bust of the economy. And that’s what the “culture” of instant gratification helped along: the growth. Not the bust.

It was people doing things that they found they could get away with, because the general public didn’t know about it. It was hidden, greedy crime. That’s what started the bust. Then it was the mismanagement of all the financial institutions dealing with the outcome of that hidden greediness.

No one in the past seemed to consider the big lack of savings accounts on the part of the middle class “the economy” — so let’s not call it that now. Our savings never really figured into things, at least in the last half-century. Only our spending did.

“The economy” still doesn’t care about us. But it will when we’re older, or broke, and out on the street. Then we finally become part of “the economy” because we’re so very visible. Big, out on the streets, demanding answers. Just like Godzilla.


The Duplicitous Products

Back in the early 90s, I thought that America’s main product that the world needed, or at least wanted, was military force and weapons. (Both our army itself, and our weapons manufacturing.) It seemed that the world’s use of us was to make us the police officer of the globe. Or so it seemed to me for about five minutes.

Now, the U.S. supplies the world with things it didn’t really ask for. Except maybe the bankers and finance guys. They would have wanted these things. 

What are our products? The credit default swap. Wall Street bonuses as a pay system. The bundled, insured, diced-up  bunch of toxic loans. The practice of demanding from customers multitudes of hidden fees that no one thought of charging for, until lately. Duplicitous products of finance and business!

Did you know that fully HALF of the people who received loans from companies like Countrywide, who ended up with Adjustable Rate Mortgages and subprime loans, actually qualified for prime rate loans? That’s fifty percent. That is NOT the poor being enabled to buy houses. That’s regular borrowers duped into signing stuff they didn’t know they were signing. They were conned into putting their names down for ballooning mortgage payments. 

This is as good, or better, than the scams of the eighties, when banks were scammed by fake borrowers who took out big loans to flip real estate and other stuff, and eventually just walked off with the money. Of course the fake borrowers were usually also people from banking, who knew how to work the banking system.

This is as good as Enron. As good as manipulating the energy market of the largest state in the nation. As great as Wall Street bonuses. As good as the Bush election in 2000.


If you don’t own a bunch of stock, WHY on earth do you worry how the stock market does? (And why are the news media trying to make it so important?) That’s like taking the temperature of your neighbor down the block to see if YOU have a fever or not. 

WHY is the credit default swap still a legal transaction? Or is Wall Street simply a bookie operation? Is AIG one?

WHY hasn’t shorting stock been severely restricted already?

I suspect everything and everyone in business now. That’s what the stream of revelations of the machinations of the financial corporations has done to me. For instance, I turn on the TV, there’s this American Idol show running over its time into the next hour. I wonder why — because that never happens. TV ad time is so expensive.

It was planned, I think. A little gimmick that made some sneaky people money in a new way. In the ten minutes of that show overlap, sensation/surprise Adam Lambert sang so prettily. He was:

1) Seen by a whole lot of people who never ordinarily watch American Idol. These accidental viewers were waiting for the show Fringe, which has a very different audience.

2) Missed by the regular viewers of Idol who DVR’d the episode, who probably set their recording devices to correspond with the normal time of the show. They missed the overrun of 10 minutes.

3) Yanked off, which in the first few hours afterwards, showed that video of the last 10 minutes. Now it does not, and people are rabidly searching for it. (He was that interesting, yes.)

4) Sold hugely on iTunes. That 10-minute performance from TV (trimmed down) is now for sale there. The planners managed to keep it exclusive by making it run past its time. 


Just an interesting little experiment that was probably very successful.


But the bigger arena of business artistry is elsewhere: the fees that credit card companies, banks, cell phone companies, and other companies have found they could charge us. More examples of American creativity!

It’s hard to list all those newfangled fees that have cropped up in the last year or two. We’ll post a short list of some examples soon. And you’ll soon be noticing those and zillions more, every time you open your eyes. Or your mail.


**The BileMaster evidently sold a batch of his brew to Kenya once.  And Alan Turing (father of the Turing Machine) may have eaten an apple dipped in it. It’s bad stuff.