How, exactly, is this a Ponzi scheme?

"A Ponzi scheme is a fraudulent investment operation that pays returns to investors from their own money or money paid by subsequent investors rather than from any actual profit earned. The Ponzi scheme usually offers returns that other investments cannot guarantee in order to entice new investors, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors in order to keep the scheme going."

Oh, and this gem from the comments section:

And the Obama Administration doesn't even WANT some of these businesses to PAY BACK their TARP money. They want to KEEP CONTROL of BUSINESS.

originalpechanga on April 17, 2009 at 12:22 PM


Hmmm, citation needed?

make me some tea: How, exactly, is this a Ponzi scheme?

Because this bastard is behind it.



/hot like a milwaukee summer

"Obama's "auto czar" to banks: Hey, how about forgiving Chrysler's $7 billion debt? Banks: What do we get in return? Czar: You'll get nothing and like it continue to be bailed out for your dumbass mistakes.

FTFY subby.

make me some tea: Hmmm, citation needed?

um, the guy IS a socialist.

It's gotta happen eventually.

That made more sense than usual for Hot Air until I got to the Ponzi scheme bit. They almost made an entire article make partial sense, a new high.

make me some tea: How, exactly, is this a Ponzi scheme?


The same way that Obama is a fascist, probably. In other words, it's not...but it sounds scary, and the audience won't look it up.

Spanky_McFarksalot: make me some tea: How, exactly, is this a Ponzi scheme?

Because this bastard is behind it.



/hot like a milwaukee summer

Wouldn't that be a Potsie scheme?

Abner Doon: make me some tea: How, exactly, is this a Ponzi scheme?


The same way that Obama is a fascist, probably. In other words, it's not...but it sounds scary, and the audience won't look it up.


No, he's a fascist socialist.

make me some tea: Oh, and this gem from the comments section:

And the Obama Administration doesn't even WANT some of these businesses to PAY BACK their TARP money. They want to KEEP CONTROL of BUSINESS.

originalpechanga on April 17, 2009 at 12:22 PM


Hmmm, citation needed?

That's actually true. Some banks want to repay the money now, but the administration is deciding if they should be able to opt out of the program. It seems reasonable to me though. If one bank pays out early, then everyone asks "Why haven't those other banks payed it off all ready? They must be weak." and then the other banks take a dive again. Goldman Sachs may have just gotten lucky with this upturn, and they don't want that to lead to a general downturn for all the other banks, and then maybe Sach's stops being lucky and they take a dive again and we're back where we were at the worst of this thing.

Abner Doon: make me some tea: How, exactly, is this a Ponzi scheme?


The same way that Obama is a fascist, probably. In other words, it's not...but it sounds scary, and the audience won't look it up.

Supply-Side Economics is a Ponzi Scheme, don't see "conservatives" b*tching about that.

*checks watch*

Yep, weekday afternoon, 'bout that time.

Did Goldman Sachs get lucky, or are they just counting the bailout money as revenue?

Oh look, a bank we gave a bajillion dollars is posting high revenues. Am I just too cynical or is this as transparent as it seems?

TheJoeY: Am I just too cynical or is this as transparent as it seems?

Yes.

TheJoeY: Did Goldman Sachs get lucky, or are they just counting the bailout money as revenue?

Oh look, a bank we gave a bajillion dollars is posting high revenues. Am I just too cynical or is this as transparent as it seems?

Yeah, the bank we gave 10 billion is showing 5 billion in profits, or something like that. Sounds kind of fishy.

DarkLancelot: Spanky_McFarksalot: make me some tea: How, exactly, is this a Ponzi scheme?

Because this bastard is behind it.



/hot like a milwaukee summer

Wouldn't that be a Potsie scheme?



It's a fonzi scheme.

Ed Finnerty

Whoa.

EL_FABREZ: Abner Doon: make me some tea: How, exactly, is this a Ponzi scheme?


The same way that Obama is a fascist, probably. In other words, it's not...but it sounds scary, and the audience won't look it up.


No, he's a fascist socialist.

He's a SuperFascistCrypto-MarxistMuslimKenyanSocialist!
Even though the sound of it is something quite atrocious, if you say it loud enough, you'll always sound precocious!
SuperFascistCrypto-MarxistMuslimKenyanSocialist!

/Um diddle diddle diddle um diddle ay
Um diddle diddle diddle um diddle ay

P.S. Ed Finnerty, what the hell is that?

RemyDuron: make me some tea: Oh, and this gem from the comments section:

And the Obama Administration doesn't even WANT some of these businesses to PAY BACK their TARP money. They want to KEEP CONTROL of BUSINESS.

originalpechanga on April 17, 2009 at 12:22 PM


Hmmm, citation needed?

That's actually true. Some banks want to repay the money now, but the administration is deciding if they should be able to opt out of the program. It seems reasonable to me though. If one bank pays out early, then everyone asks "Why haven't those other banks payed it off all ready? They must be weak." and then the other banks take a dive again. Goldman Sachs may have just gotten lucky with this upturn, and they don't want that to lead to a general downturn for all the other banks, and then maybe Sach's stops being lucky and they take a dive again and we're back where we were at the worst of this thing.

Also - access to the books is desired more than "control". Same reason why the NSA and NSF would fund research into every quantum computing project they could. Not becuase they wanted them to succeed, but if they gave money, they get progress reports...

DarkLancelot: Wouldn't that be a Potsie scheme?
Lt. Cheese Weasel: It's a fonzi scheme.

So much win.

I tried to submit the Washington Post article instead of the Hot Air one, but the mods claimed that it had already been submitted but not listed. I'm not the subby for the Hot Air article because I refuse to submit them because the first thing that happens is the news is dismissed because it is from Hot Air, the same way as if it was from Faux News.

That all being said, this is really stupid. I think that this whole thing is a bad idea. How much trouble does a company have to be in before the feds will twist arms to get loans forgiven? Can private individuals take this deal? I'd love for the government to make my bank forgive my car loan. That would make my life easier.

Renart: what the hell is that?

Photoshop these girls jumping on their bed from Oct 2007.

TheJoeY: Did Goldman Sachs get lucky, or are they just counting the bailout money as revenue?

Oh look, a bank we gave a bajillion dollars is posting high revenues. Am I just too cynical or is this as transparent as it seems?

Apparently, your company is too big to fail only when there are many people in government positions that used to work for you.

It's not bailing out Chrysler, it's bailing out Cerberus.

/Daimler must be SOOO happy to have sold them when they did.

bulldg4life: TheJoeY: Did Goldman Sachs get lucky, or are they just counting the bailout money as revenue?

Oh look, a bank we gave a bajillion dollars is posting high revenues. Am I just too cynical or is this as transparent as it seems?

Apparently, your company is too big to fail only when there are many people in government positions that used to work for you still take payouts from you.

FTFY

bulldg4life: TheJoeY: Did Goldman Sachs get lucky, or are they just counting the bailout money as revenue?

Oh look, a bank we gave a bajillion dollars is posting high revenues. Am I just too cynical or is this as transparent as it seems?

Apparently, your company is too big to fail only when there are many people in government positions that used to work for you.

The Daily Show coverage of Goldman's recovery was pretty good.

If anyone doubted that the bailouts have turned into nothing more than a big Ponzi scheme

You keep using that term...

RemyDuron: That's actually true. Some banks want to repay the money now, but the administration is deciding if they should be able to opt out of the program. It seems reasonable to me though.

According to what I've read about this, the TARP funds that the banks accepted (or were induced to accept) were deposited through their Federal Reserve accounts. Some banks that didn't actually need the money had it deposited regardless. The money was lent at something like 1.5%. The banks have no method of paying back money that they no longer need for liquidity purposes. The Fed holds all of the cards since the now-solvent banks still need to do the usual transfers and loans through the fractional reserve system.

Let's say your company is in bad straights and you take out a business loan to consolidate your debts and tide you over until you were able to sort things out. You go back to the bank when you have your cash flow back to normal to retire the debt and the banker says, "Oh, no. We don't think you need to pay the money back yet. In fact, we won't accept it. You need to hang onto it until some undetermined time that we'll let you know about later on. And, of course, your interest will continue to accrue. By the way, we get to come in and tell you how your business needs to be run for awhile, too."

Perfectly reasonable.

Of course they should forgive it. You can't squeeze blood out of a turnip.

RemyDuron: bulldg4life: TheJoeY: Did Goldman Sachs get lucky, or are they just counting the bailout money as revenue?

Oh look, a bank we gave a bajillion dollars is posting high revenues. Am I just too cynical or is this as transparent as it seems?

Apparently, your company is too big to fail only when there are many people in government positions that used to work for you.

The Daily Show coverage of Goldman's recovery was pretty good.

Please link, good sir.

Rapmaster2000: If anyone doubted that the bailouts have turned into nothing more than a big Ponzi scheme

You keep using that term...

Ponzi scheme: a fraudulent investment operation that pays returns to investors from their own money or money paid by subsequent investors rather than from any actual profit earned.

Megabanks right now: extremely weak due to illiquid positions and nearing collapse, unable to meet obligations, posting record losses
Government: gives them money with little accountability and tells them to fix the mess, and damn the expense.
Caveat: They're legal.

We need a term for legal investment operations that pay returns to investors from money paid by subsequent investors rather than from any actual profit earned.

TheGreatGazoo: It's not bailing out Chrysler, it's bailing out Cerberus.

/Daimler must be SOOO happy to have sold them when they did.

Well, I'm pretty sure they weren't too happy with buying them in the first place. Seeing as how they took a several billion dollar loss in the transaction I'm sure anything about Chrysler made Daimler happy.

In business school, they taught us that the debt holders are in line ahead of the unsecured debt and all of the equity claims.

I want, a hamburger... I want... a hotdog.


/farts
//double farts

Not a single bank was forced to take TARP money. How many times will this lie be repeated?

Now, somebody will post an article claiming a guy who was in the meetings SAID they were forced with no proof whatsoever.

Nobody was forced, they wanted and needed it. Time to play ball.

JoeJitsu: According to what I've read about this, the TARP funds that the banks accepted (or were induced to accept) were deposited through their Federal Reserve accounts. Some banks that didn't actually need the money had it deposited regardless.

Bull. The worst that can be said is that banks were pressured to accept by being told it was a one-time offer, and if they refused, they couldn't change their mind later. Nobody just woke up to find TARP funds in their account.

The banks have no method of paying back money that they no longer need for liquidity purposes.

Five banks so far have already paid back their TARP borrowings in full, and many others have made partial payments. Somehow, THEY managed.

Shut up Michelle Malkin, you cock.

Yomoxu: Please link, good sir.

Here you go

Sum Dum Gai: JoeJitsu: According to what I've read about this, the TARP funds that the banks accepted (or were induced to accept) were deposited through their Federal Reserve accounts. Some banks that didn't actually need the money had it deposited regardless.

Bull. The worst that can be said is that banks were pressured to accept by being told it was a one-time offer, and if they refused, they couldn't change their mind later. Nobody just woke up to find TARP funds in their account.

The banks have no method of paying back money that they no longer need for liquidity purposes.

Five banks so far have already paid back their TARP borrowings in full, and many others have made partial payments. Somehow, THEY managed.

Amazing how many people still buy this, like the banks are victims.

NO BANK WAS FORCED TO TAKE MONEY.

Sum Dum Gai: JoeJitsu: According to what I've read about this, the TARP funds that the banks accepted (or were induced to accept) were deposited through their Federal Reserve accounts. Some banks that didn't actually need the money had it deposited regardless.

Bull. The worst that can be said is that banks were pressured to accept by being told it was a one-time offer, and if they refused, they couldn't change their mind later. Nobody just woke up to find TARP funds in their account.

The banks have no method of paying back money that they no longer need for liquidity purposes.

Five banks so far have already paid back their TARP borrowings in full, and many others have made partial payments. Somehow, THEY managed.

Really? That seems to directly contradict several stories I've heard on NPR/BBC (local NPR plays BBC World Service for 1 hour each day, can't remember which I heard it on) when they were discussing the reasons for not letting Goldman Sachs pay back the money. Did Goldman's money not come from TARP?

I will say, the OP is something I did not expect to see today.

RemyDuron: Yomoxu: Please link, good sir.

Here you go

Thank you very much, kind sir!

RemyDuron: Really? That seems to directly contradict several stories I've heard on NPR/BBC (local NPR plays BBC World Service for 1 hour each day, can't remember which I heard it on) when they were discussing the reasons for not letting Goldman Sachs pay back the money. Did Goldman's money not come from TARP?

Actually, the banks are required to negotiate on returning TARP funds; Goldman wants to pay back some of the funds, and it's still an open question if the Federal Reserve (the regulatory agency that oversees Goldman-Sachs) will seek to prevent it or not.

The six banks (according to the article, I had only heard the first five) were smaller.

PascalsGhost:
Amazing how many people still buy this, like the banks are victims.

NO BANK WAS FORCED TO TAKE MONEY.

You know, they say that once a lie is out on the Internet, it never goes away. Therefore, I would like to posit that Michelle Malkin was once repeatedly terked by a syphilitic bear.

The Dreaded Rear Admiral: You know, they say that once a lie is out on the Internet, it never goes away. Therefore, I would like to posit that Michelle Malkin was once repeatedly terked by a syphilitic bear.

Please don't spread lies like this. The bear didn't have syphilis.

another political dipshiat spending my money and not knowing what the fark they are doing.

both sides wake up and get rid of all the bastards. they are spending our money, not theirs. if you are that bad with your money you don't belong in the conversation anyway

Chrysler will have a great time getting a loan in the future!

/drtfa

The bonds in question appear to be unsecured. Unsecured creditors of utterly insolvent companies get nothing in a liquidation and they might get a few cents on the dollar in a reorganization.

The banks holding the bonds are just playing chicken to negotiate for a few bucks more.

EL_FABREZ: Abner Doon: make me some tea: How, exactly, is this a Ponzi scheme?


The same way that Obama is a fascist, probably. In other words, it's not...but it sounds scary, and the audience won't look it up.


No, he's a fascist socialist.

THIS