Reason Morning Links: A Subsidy for Banks, a Surge in Afghanistan, and a Suit Against George Bush

- Surprise, surprise: Many banks misuse their TARP subsidies.

- The Securities and Exchange Commission's case against Mark Cuban is dismissed.

- The Drug Enforcement Administration unleashes its own surge in Afghanistan.

- Former Guantanamo prisoners prepare to sue George W. Bush.

- Four more banks shut down.

- South African scientists launch clinical trials for an AIDS vaccine.

Comments

[Jim Stewert]

What exactly are we doing in Afghanistan again? I dont get it.

RT
http://www.anonymize.tk

[DJF]

Don't know why the US is there but the British are there so their taxpayers can build Ferris Wheels and Womans Parks

http://eureferendum.blogspot.com/2009/07/paradise-lost.html

[Untermensch]

The bit on misusing TARP subsidies is a little misleading. Treasury's position is pretty accurate: asking them to track the results of specific dollars given to banks is useless. Sort of like the shell game with the tobacco settlement funds that said states had to fund health and prevention programs with them but which in fact simply meant that they funded those programs entirely out of the settlement funds and added the funds that had previously funded them back into the general fund, thus legally complying with the settlement terms without actually having to do anything other than enrich the general fund.

For similar reasons, if a bank buys another bank, it's essentially meaningless to tell them that they can't do it with TARP funds (versus with other money they have sitting somewhere), because they can always say that the TARP funds went to loans but they bought the other bank with their own money, even though they wouldn't have had the money to buy the other bank without the TARP funds.

So are they misusing the funds? Well, probably yes, but are they misusing them in a legal sense? Probably not.

[Tricky Prickears]

What exactly are we doing in Afghanistan again? I dont get it.

You're no the only one.

Surprise, surprise: Many banks misuse their TARP subsidies.

Irony: The ally bank advertisement I see here. Aren't they being accused of "misusing" TARP funds?

[J sub D]

Many of the banks that got federal aid to support increased lending have instead used some of the money to make investments, repay debts or buy other banks, according to a new report from the special inspector general overseeing the government's financial rescue program.

...

Roughly 80 percent of respondents, or 300 banks, also said at least some of the money had supported new lending.

Nobody, I mean absolutely no-fucking-body, could have foreseen this development.

*sigh*

[J sub D]

With opium production soaring, and funding Taliban activities, the U.S. is sending dozens of DEA agents to help break trafficking rings, a shift in policy from crop eradication.

Finally the right people? are in charge and the narcotics trade in Afghanistan will eradicated.

psst! Wanna buy a bridge?

[Hugh Akston]

The best part of the TARP story is not that the banks are (mis)using funds, but that the Treasury has given up any semblance of trying to provide the vaunted transparency that has be come the hallmark of the this administration.

In a written response, the Treasury again rejected that call. Officials have taken the view that the exact use of the federal aid cannot be tracked because money given to a bank is like water poured into an ocean.

[J sub D]

South African scientists launch clinical trials for an AIDS vaccine.

I'll keep my fingers crossed. Were I a theist I'd be praying for success.

[T]

Officials have taken the view that the exact use of the federal aid cannot be tracked because money given to a bank is like water poured into an ocean.

Well, yes. Does the word fungible mean anything to anybody?

[P Brooks]

Many counter-narcotics officials, current and former, praised the DEA expansion, which they said they had pushed for since late 2006 but had faced seeming indifference or outright opposition from others in the Bush administration, including elements of the military and intelligence communities.

"Indifference or outright opposition from the military and intelligence communities"?

How can this be?

[Kyle Jordan]

"Many counter-narcotics officials, current and former, praised the DEA expansion, which they said they had pushed for since late 2006 but had faced seeming indifference or outright opposition from others in the Bush administration, including elements of the military and intelligence communities."

Well, for all their faults, the Military and intelligence communities actually know how to fight a fucking war. And turning possible allies or at least non-threats in to enemies is generally the smart thing to do. Heaven forbid this stop a good drug crusade though!

Fucking idiots.

[Hugh Akston]

I don't think fungibility is the issue. If the banks were required to keep their TARP funds in separate accounts, it would be a relatively easy matter to track whether those funds were transferred to one account to cover liabilities, or another to issue new loans.

Otherwise it's like giving your alcoholic brother-in-law a $50, but only after he crosses his heart to use it to pay rent.

[Kyle Jordan]

*Generally NOT the smart thing to do.

[P Brooks]

Fungibility is an issue, but, unlike a government institution, a private entity like a bank is constrained by law (and GAAP) from limitless spending. If the TARP money is not there, they cannot do everything they're doing now. One can reasonably speculate as to what they would or would not be up to.

[R C Dean]

The bit on misusing TARP subsidies is a little misleading. Treasury's position is pretty accurate: asking them to track the results of specific dollars given to banks is useless.

The lack of TARP accountability isn't the biggest money-laundering operation in history. AIG is. All the money given to AIG is going right out the back door to the counterparties on busted derivatives (yeah, Goldman, I'm looking at you) via all those insurance polices AIG wrote on the derivatives. AIG was bailed out to give cover to a massive wealth transfer to the big Wall Street players.

[P Brooks]

Irony: The ally bank advertisement I see here. Aren't they being accused of "misusing" TARP funds?

If you consider zombie banks to be a misuse of TARP funds, then yes. Ally GMAC should be a poster child for Tarp misuse.

[hmm]

? Surprise, surprise: Many banks misuse their TARP subsidies.

Money freely given without rules was used freely. The government supported consolidation of banks, something it has done since before the FDIC came into existence.

The fact they are turning a profit so quickly and the whole GS ordeal is troubling to say the least.

[Johnny Longtorso]

Can I put in a plug for an older article I ran across awhile back?

http://www.city-journal.org/2008/eon1030hh.html

...As economist Russell Roberts of George Mason University points out, Bank of America reported that nonperforming CRA-eligible loans were a significant drag on its third-quarter 2008 income. Its earnings report states: "We continue to see deterioration in our community reinvestment act portfolio which totals some 7 percent of the residential book. . . . The annualized loss rate from the CRA book was 1.26 percent and represented 29 percent of the residential mortgage net losses." This is a far cry from the advocates' standard line that CRA loans, while less lucrative than standard mortgages, are still profitable. ...

[BMB]

For the love of all that's holy, somebody please include counting jobs created or saved to Herbert M. Allison Jr's list of duties.

[Gunboat Diplomacy]

This is Bullshit!

When the TCF Bank Stadium opens in less than two months, the University of Minnesota plans to implement a system to deter alcohol-related problems by administering breathalyzers to prior offenders.

The program, called "Check BAC" - as in blood alcohol content - is just one of the many steps the University and police are taking to prepare for the inevitable trouble that will come with bringing football back to campus. University police have been travelling around the Big Ten looking for advice on alcohol enforcement and traffic control to get ready.

Check BAC is modeled after a University of Wisconsin-Madison program. If a student is caught for underage consumption or ejected from the stadium for public intoxication, they are automatically enrolled in the program. If the student comes back to a game that same season, they will be required to provide a breath sample on a portable breath tester.

http://www.mndaily.com/2009/07/14/university-police-prepare-campus-football

[P Brooks]

But- there's nothing in the Constitution about a right to watch college football (drunk or otherwise)!

[T]

I don't think fungibility is the issue. If the banks were required to keep their TARP funds in separate accounts, it would be a relatively easy matter to track whether those funds were transferred to one account to cover liabilities, or another to issue new loans.

Oh, come now. We put all the TARP money in this account. We only use the TARP money for making loans. Every other red cent we would have used to make loans is now being used to acquire SmallBank. The money from TARP we don't loan is used as collateral for the remaining debt to buy SmallBank. See how easy that was?

[johnl]

The Cuban case was so weak it makes one wonder why it was brought.

[TrickyVic]

"""If a student is caught for underage consumption or ejected from the stadium for public intoxication, they are automatically enrolled in the program. If the student comes back to a game that same season, they will be required to provide a breath sample on a portable breath tester.""

How do the cops know if your are enrolled in the program? Are they going to check every ID and compare it to a database?

[The Gobbler]

"How do the cops know if your are enrolled in the program? Are they going to check every ID and compare it to a database?"

Sounds about right.

[han]

Such Norman Rockwell scenes are rare today.