More than $50 billion of new capital was raised as part of the effort by the biggest banks to repay the money from the Troubled Asset Relief Program and get out from under the thumb — and pay caps — of Washington.
All told, December was the biggest month in history for offerings, according to Thomson Reuters.
Here’s what the post-bailout bonanza means for all the banks that helped find investors for the new shares: Bank of America’s $19.3 billion offering generated $482 million in fees; Citigroup’s $17 billion offering resulted in $425 million in fees; and Wells Fargo’s $12.2 billion offering led to $275.6 million in fees. (The banks paid themselves roughly 2.5 percent of the offering price.)
[…]
On the fees from the post-bailout offerings, there is an element in all of this of just moving money from one pocket to another.After all, paying yourself a fee just means the cost of the offering is lower than if you had used an outside bank to do the work. It’s not real revenue.
But when bonus time comes, and when employees tally up the work they did for the year, they will be compensated for their work on these offerings as if they had worked for an outside client.
[…]
While many on Wall Street may hold a dim view of the Treasury, one banker I spoke with said he had a message for Timothy F. Geithner: “Thank you.”
It’s all a rigged shell game. They made money going broke, they made money getting help and now they’re making money repaying that help. And we just pay and pay and…
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“Regulatory capture” is so oldschool. How about “regulatory circus?”
Yup… Change you better believe in, because the IRS will and we get to pay for it.
But he wasnt talking about small pocket-change.
Why any middle-class wage earner does business with a commercial bank is beyond me. Unless you are running a firm with large-scale credit needs, you can get cheaper and better service from a credit union. Some even offer small business loans and many provide mortgages, albeit not subprime or no-money-down nonsense loans. Deposits also are protected to the same amount as in a commercial bank. Unless credit unions turn suddenly stupid, as did the mutual savings and loans a couple of decades ago when the MBAs got the bright idea to turn them for-profit and fund shopping centers, they’re a much better option than a bank.
(T)enth
(A)mendment
(R)epealed
(P)ermanently
It’s amazing how most people haven’t figured it out yet.
“The president has packed his economic team with Wall Street insiders intent on turning the bailout into an all-out giveaway”
http://rollingstone.com/politics/story/31234647/obamas_big_sellout/1
Doesn’t matter. Carter bailed out Chrysler with a loan (we got that back), Reagan bailed out the 740+ failed savings and loan banks (about $120 billion in early 80s dollars). If you think this kind of corporate bailout stops because you vote for party X vs party Y you’re just stupid. Same with all the other issues. Don’t like “big government” and taxes…vote Republican, except government will get bigger (did under Nixon, Ford, Reagan, Bush 1, Bush 2) and the IRS will still be here and take the same taxes within a percentage point of too.
Either form a new party or stop “bitching”. Republicans especially always fight campaign reform (god FORBID something like publicly financed elections). So you get THIS! Dude, if it takes $400 million dollars to run for President, why would you think they aren’t owned by corporations? HELLO!
#8, Well said!
The system has been rigged from the start:
A bank “borrows” money from the Federal Reserve at close to 0%.
They use the money to buy Treasury Bills, which pay 3.5% (10 years). The government loves this because they can run a deficit.
The banks put the Treasury Bills on their balance sheets as an asset, and they can borrow more from the Federal Reserve.
Repeat 10 times.
So now the banks are getting close to 30% return with zero risk.
Why waste time dealing with customers?
Remember, anyone who opposes powerful, enforced re-regulation of the banking industry is voting for more of this crap.
Shut up and bend over, beatch!!!
Those damn Republicans!
Yep, Obama is in the pocket of the bankers, big time.
And how would it have been different under the Republicans?
Didn’t any of you buy stock when this was happening?
You could be making money from all of this too! Yes, even as a tax payer.
Relax, it is still only US dollars, not real money.
#7 Matt Taibbi is THE MAN! He is the best writer on all things financial, but his range is so much greater. I also like Floyd Norris and Kurt Eichenwald, but they aren’t nearly as entertaining.
#11 Regulation caused the credit collapse? What planet are you from? When the banking business is unregulated it will always blow a niche product into a major crisis. Every hear of IBGYBG(I’ll Be Gone, You’ll Be Gone)? Time horizons, and often jobs, are extremely short on Wall St.
#17 Thankfully all the major countries are doing the same thing we are (debt explosion). Most of them start from a worse debt% to GDP, so we do have some cover. The next time it goes in the toilet I think we will do better than the rest. Still, the trend is not good.
I think it is becoming clear that the real test of Obama is whether he will do anything substantive that the banks don’t like. Personally I think he is just an image and not substantive. I would, very much, like to be proved wrong.
The reason I do business with a big bank is they bought my bank. I think that happened maybe three times? Maybe that shouldn’t have been allowed to happen?
# 18 chris paraphrases #11 Greg Allen (incorrectly in my view) thus:
“#11 Regulation caused the credit collapse? What planet are you from? When the banking business is unregulated it will always blow a niche product into a major crisis.”
I think you misunderstood his post — I believe he’s saying this will all happen again unless we re-regulate the banks.
= = = = =
From the article:
‘one banker I spoke with said he had a message for Timothy F. Geithner: “Thank you.” ‘
I think we should all thank Geithner. Instead of a decade-long world-wide Depression, we’ve had an (admittedly major) eighteen-month recession, which appears to have hit bottom. Their efforts appear to be helping…
Yeah, you’re right. I did misread it. Sorry Greg Allen.
I’m neutral on Geithner and Bernanke. We’ve heard the world would end if dumb investors didn’t get paid back for (any one of a long line of debt problems). World hasn’t ended yet, that’s a plus.
The negative is that Obama was so focused on the short term that he seems to have missed the chance to get real reform done. Now that the banks appear healthy (and have resumed paying lobbyists) they can prepare the next implosion.