Don't Spend the Money Yet, Taxpayers.

We've frequently commented here how we wont see a thin dime paid back to us taxpayers from the auto companies or AIG on these bailouts and so far we are correct. Or as they say in the hood, "correck". Now GM announced yesterday that they might pay back $1.4bn of the multiple, multiple billions they have received from you and me. Well la dee da da. So we might get a thin dime back. But that might be all. Now the banks have been a different story. Well, kind of.

Citibank and Wells Fargo have been in the news the last few days saying they are desperate to pay back the TARP money we gave them, with interest. It looks like they are going to do it too! Yahoo! But as the funny cat on ESPN, Lee Corso, likes to say, "not so fast my friends."

Lets hit Wells first. They benefit from fun accounting. Now follow this closely, if you dont remember. Wells bought Wachovia who had bought Golden West Financial. Golden West was run by a nice gent named Herb Sandler. He sold Golden West (and owned like 70% of the shares) to Wachovia at the very tippity-top of the market. Now people say he duped Wachovia. Saturday Night Live also did a skit that said Herb and his wife Marion, were "people who should be shot in 2006". No kidding. They must've then found out that old Herb was a BIG BIG donor to the Democratic Party and now you cant find the clip anywhere. You cant make this stuff up. Anyhoo, Herb gets into my "top 10 traders of the decade" for his basically selling a worthless portfolio of about $122bn in bad mortgages for quite a bit. 

You know who owns that portfolio now? Wells Fargo does. Yes they are paying back TARP money. Why? Who knows? But they will be back at the feeding trough soon you mark my words. Because that $122bn portfolio has not been marked down anywhere near where it should be. And you know where it should be marked? ZERO. BUBKIS. NYET. Soneone please tell me I'm wrong. Because if they had to sell that portfolio, yes even in this "rallying market, they'd get no interest. Fun right?

Citi is a whole different ball of wax but similar in that it has no money. See Citi is paying back the dough from TARP but you know what? The press has quietly reported (on pages like 25 or 26, NOT page 1) that  although Citi is paying back the TARP money they are being told by the IRS that they dont have to worry about paying billions of taxes that they owe. Thats our money folks. Why do they play these games? Dunno. But if we've learned anything these last few years, the kaka (technical term) always rises to the top. 

I feel for the workers at Citi because they are just doing their jobs trying to make money. The management though I guess starting with Sandy Weill and then Bob Rubin, boy, put these guys at Citi, and therefore us taxpayers, in a pickel. Although, both gents have claimed they weren't responsible for the risk taking at the firm. At least when the losses were occuring right? They certainly collected a lot when things were going well. Maybe that was due to their ideas on strategically placed ATMs all over the globe? Assclowns.  

Comments

[divvytrader]

..................... --

in the office of new BAC CEO Brian Moynihan

Moynihan : yes , this is Brian

caller : hello Brian , its Vikram Pandit ....... i just wanted to call to say con------

Moynihan : who the hell are you , Pandit ..... i didn't order Indian food today .

Pandit : huh ? Brian ... this is Vikram Pandit ..... CEO of Citibank

Moynihan : yeah right ..... and i'm the mayor of Dublin Ireland too .......

Pandit : hey asshole , i was calling to congratulate you on your new job but ....

( Moynihan calling to his assistant " hey , who is CEO of Citi ? ..... what ?? it really is an indian dude? .... oh crap )

Moynihan : Pandit .... Pandit ... my apologies ......... i had you mixed up with somebody else ...........

Pandit : lemme get this straight ...... BAC just appointed a guy to run biggest bank in USA who has no clue who his competing CEO are ?

Moynihan : easy Vikram ....... i ran consumer banking here ... and with CEO's at banks like revolving doors of late , rather hard to keep track , ya know ......... besides , you sound a bit like Ramesh down at the Tandoori Kitchen and ..... hey , would you like to grab some lunch there one day ?

Pandit : Thanx but i'll take a rain check until you catch up on what major bank CEO should know before offered the job .....

Moynihan : easy Pandit ........ with your lump of turd secondary yesterday swirling in the toilet just over $3 , i wouldn't start lectureing me .

Pandit : uh ... Brian .... speaking of lump of turd secondaries ? at least mine is still above secondary price .... or did you even know you guys sold a trillion shares recently at $15 ....

Moynihan : hey my turbaned one ........ at least i'm gonna get a monster bonus next year and won't have to take Geithner's call like he's my wife .............. and when your stock is down to 25 cents and you need a loan ? go call Dimon pal ......... he'll pick the coins off your eyes in the grave

Pandit : F*** off , buddy ....... with the government behind us , we're bullet proof ......... when CMBS start imploding and your zillion dollar jumbo home loans start doing implosions and Geithner calls to ask what i think , i'll tell him to pull the handle and let the bowl empty with you in it !

...... and so another day in the never ending saga " As The Banks Burn " comes to an end

[WL]

lol great stuff Richie!