Obama to propose bank fees to recoup bailout funds

[Guest guest]

I'm slowly working my way through Atlas shrugged and I've been thinking the same thing. So much of what we are seeing, and have seen over the last decades, has been right out the novel.

I was talking to a family friend the other day and Atlas Shrugged came up. He mentioned a cousin of mine who's wife is from Denmark. She read Atlas Shrugged when she first came to this country and said she could see these things starting to happen here and believed it could all happened here. This was in the 1970's. I wonder what she thinks now?

Yes! Tax the successful to pay for the failures! This HAS to work! Obama says so!

.... I'm slightly terrified by how much it seems like thus administration read Atlas Shrugged and got the message completely wrong. I'm half expecting bills to start coming out named from the book soon. -=Russ=-

[Guest guest]

http://ca.news.yahoo.com/s/reuters/100114/us/politics_us_obama_banks

Obama to propose bank fees to recoup bailout funds

2 hours, 49 minutes ago

By Alister Bull

WASHINGTON (Reuters) - President Barack Obama on Thursday will propose major

U.S. financial firms pay a fee to protect taxpayers from up to $117 billion in

losses on a bank bailout that has spurred fury at Wall Street excess.

Obama, whose action comes amid mounting public anger over multi-million dollar

bank bonuses while ordinary Americans struggle in the face of 10 percent

unemployment, will announce the plan at 11:50 a.m., a senior administration

official said.

" The fee that is put forward here is in many ways a minimum -- a minimum of what

is owed back for the rather significant costs that are borne in many aspects by

the taxpayers, " the administration official told reporters.

The levy will recoup losses from a $700 billion taxpayer rescue of U.S. banks

called the Troubled Asset Relief Program, or TARP, conceived in 2008 by Obama's

predecessor, W. Bush, at the height of the global financial panic.

Forged after the collapse of U.S. investment bank Lehman Brothers and

multi-billion dollar rescue of insurance giant American International Group,

TARP helped stem the crisis by injecting public capital into the biggest U.S.

banks and convincing investors no others would be allowed to fail.

The action, together with massive monetary and fiscal policy stimulus from the

government and Federal Reserve, was unable to deflect the country's worst

recession since the Great Depression, which has pushed unemployment to a 26-year

high.

However, that did not obstruct bumper profits on Wall Street as stock markets

rebounded sharply in 2009 from crisis-lows. This has helped many of the banks

repay their TARP injections, freeing them of government rules on compensation

and allowing them to now pay out major staff bonuses.

FEW SPARED

Banks that have already repaid TARP capital will not be spared the fee, and nor

will firms that got no TARP money to start with, but nevertheless benefited from

the stability it brought to the U.S. economy, the official said.

Full details of the fee proposal will not be laid out until Obama delivers his

budget for fiscal 2011 in early February, and will then be subject to shaping by

Congress.

The plan will include a levy of 15 basis points, or 0.15 percentage point, on

the balance sheets of big firms with assets of more than $50 billion.

The Obama administration expects to raise $90 billion over the first 10 years,

and thinks this will ultimately cover all losses from TARP, although at the

moment these losses are being projected at $117 billion.

" The banks that are in question were significantly responsible for an enormous

degree of the reckless risk-taking that was borne throughout the entire

economy, " the official said.

AIG will be subject to the fee. But mortgage lenders Fannie Mae and Freddie Mac,

which are under government conservatorship, will be excluded, as will U.S.

automakers who got bailout money.

Public rage at bankers, whom Obama chided in December for their " fat cat

bonuses, " has taken on a deeper political dimension as Democrats who control

Congress weigh sweeping financial regulatory reforms in the face of stiff

industry opposition.

Wall Street chiefs were grilled on Wednesday at the opening hearing of a special

inquiry into the 2008 financial crisis and the resulting taxpayer bailout to

save their industry.

The White House said on Wednesday that an apology was the least the country

expects to hear from the banks.

The heads of Goldman Sachs, Stanley, JP Chase and Bank of America

faced the first public hearing of the Financial Crisis Inquiry Commission. It

will convene throughout the year and is expected to issue a report by December

15.

(Reporting by Alister Bull; editing by Todd Eastham)

[Guest guest]

Yes! Tax the successful to pay for the failures! This HAS to work! Obama says so!... I'm slightly terrified by how much it seems like thus administration read Atlas Shrugged and got the message completely wrong. I'm half expecting bills to start coming out named from the book soon. -=Russ=-On Jan 14, 2010, at 7:23, environmental1st2003 <no_reply > wrote:

http://ca.news.yahoo.com/s/reuters/100114/us/politics_us_obama_banks

Obama to propose bank fees to recoup bailout funds

2 hours, 49 minutes ago

By Alister Bull

WASHINGTON (Reuters) - President Barack Obama on Thursday will propose major U.S. financial firms pay a fee to protect taxpayers from up to $117 billion in losses on a bank bailout that has spurred fury at Wall Street excess.

Obama, whose action comes amid mounting public anger over multi-million dollar bank bonuses while ordinary Americans struggle in the face of 10 percent unemployment, will announce the plan at 11:50 a.m., a senior administration official said.

"The fee that is put forward here is in many ways a minimum -- a minimum of what is owed back for the rather significant costs that are borne in many aspects by the taxpayers," the administration official told reporters.

The levy will recoup losses from a $700 billion taxpayer rescue of U.S. banks called the Troubled Asset Relief Program, or TARP, conceived in 2008 by Obama's predecessor, W. Bush, at the height of the global financial panic.

Forged after the collapse of U.S. investment bank Lehman Brothers and multi-billion dollar rescue of insurance giant American International Group, TARP helped stem the crisis by injecting public capital into the biggest U.S. banks and convincing investors no others would be allowed to fail.

The action, together with massive monetary and fiscal policy stimulus from the government and Federal Reserve, was unable to deflect the country's worst recession since the Great Depression, which has pushed unemployment to a 26-year high.

However, that did not obstruct bumper profits on Wall Street as stock markets rebounded sharply in 2009 from crisis-lows. This has helped many of the banks repay their TARP injections, freeing them of government rules on compensation and allowing them to now pay out major staff bonuses.

FEW SPARED

Banks that have already repaid TARP capital will not be spared the fee, and nor will firms that got no TARP money to start with, but nevertheless benefited from the stability it brought to the U.S. economy, the official said.

Full details of the fee proposal will not be laid out until Obama delivers his budget for fiscal 2011 in early February, and will then be subject to shaping by Congress.

The plan will include a levy of 15 basis points, or 0.15 percentage point, on the balance sheets of big firms with assets of more than $50 billion.

The Obama administration expects to raise $90 billion over the first 10 years, and thinks this will ultimately cover all losses from TARP, although at the moment these losses are being projected at $117 billion.

"The banks that are in question were significantly responsible for an enormous degree of the reckless risk-taking that was borne throughout the entire economy," the official said.

AIG will be subject to the fee. But mortgage lenders Fannie Mae and Freddie Mac, which are under government conservatorship, will be excluded, as will U.S. automakers who got bailout money.

Public rage at bankers, whom Obama chided in December for their "fat cat bonuses," has taken on a deeper political dimension as Democrats who control Congress weigh sweeping financial regulatory reforms in the face of stiff industry opposition.

Wall Street chiefs were grilled on Wednesday at the opening hearing of a special inquiry into the 2008 financial crisis and the resulting taxpayer bailout to save their industry.

The White House said on Wednesday that an apology was the least the country expects to hear from the banks.

The heads of Goldman Sachs, Stanley, JP Chase and Bank of America faced the first public hearing of the Financial Crisis Inquiry Commission. It will convene throughout the year and is expected to issue a report by December 15.

(Reporting by Alister Bull; editing by Todd Eastham)

[Guest guest]

"Yes! Tax the successful to pay for the failures! This HAS to work! Obama says so!

"... I'm slightly terrified by how much it seems like thus administration read Atlas Shrugged and got the message completely wrong. I'm half expecting bills to start coming out named from the book soon."

Hopefully you see the larger implications of this? If the big banks get taxed or slapped with some additional kind of federal fee, they will pass it on to consumers. Take it from someone who used to work in one of the biggest banks in North America as a superviser in their bookkeeping department. Our bank paid thousands a month PER BRANCH in federal reserve fees alone. At the time I quit that bank, there were 150 branches. There are three times as many now.

The fees which the bank will pay to the fed will be reflected in lower interest rates paid to customers, who are already stressed by ATM fees, overdraft fees, check ordering fees and all sorts of other fees. They will go to smaller banks.

These smaller banks will happily take the customers, but they still will not have enough money from their customer base to make substantial loans. Thus only homeowners and small businesses will get loans from them while bigger businesses will not be able to borrow from the big banks due to depleted funds.

Remember that federal government INSISTED that the banks take bank ballout money that it didn't need, and now banks are in essence being charged for that service.

What the fed should have done is let the big banks fail. They were engaged in poor lendingpractices anyway. The government would then pay off the depositors and be done with it. It might have cost the government more money, but it would have insured that ONLY fiscally responsible banks survived. Plus, whenever you have a situation where fewer banks exist, but the number of auditors remains stable, the end result is better oversight.

Instead, the fed worsened the situation to begin with and is worsening the situation now.

Here are the results from a Yahoo poll:

Has Obama brought meaningful change to the world?

(36%)Yes (64%)No

What a record!!!

Administrator

[Guest guest]

Good points.

Something just stated on the news is that many of the banks are paying back their TARP money. However, the auto companies still owe over $75 billion in handouts, but they aren't being taxed. Given what we've seen with this deal on health care, where unions will be exempt from the Cadillac health care tax until 2017, is that the auto companies won't be bothered as a sap to the unions.

This President and the Dems are playing pure politics with the economy, not economics and trying to do what is right.They are just doing what is best for their own political careers and party power, not what is really going to help the US.

In a message dated 1/14/2010 1:37:04 P.M. Eastern Standard Time, no_reply writes:

Hopefully you see the larger implications of this? If the big banks get taxed or slapped with some additional kind of federal fee, they will pass it on to consumers. Take it from someone who used to work in one of the biggest banks in North America as a superviser in their bookkeeping department. Our bank paid thousands a month PER BRANCH in federal reserve fees alone. At the time I quit that bank, there were 150 branches. There are three times as many now.