Dream (by Susie at Suburban Guerrilla)
I was talking to a friend, and he said, “You know what I dream? That one day the Democrats will control both houses of Congress and the White House, and then we’ll stop the war, get all the money out of politics and have single-payer healthcare.” Hah. Keep dreaming.

Black Agenda Report

Obama Preserves Entrenched Power, Sidesteps Racial Disparities (by Glen Ford at the Black Agenda Report)
Barack Obama actually said it: a truncated form of the hackneyed rich man's expression, "a rising tide lifts all boats." The cliché was a fixture of trickle-down Reaganics and the Bush I and II permutations, as well as the Clinton deregulationathon. Now Obama employs it to justify his refusal to offer any programs to "address historical and emerging racial disparities." The twisted logic goes something like this: "The deeper Blacks sink into the abyss, the more they are eligible for general assistance - therefore, the Obama plan already contains everything African Americans need as a group, and will be of more use to them than to more advantaged groups." Thus, the nation's first Black President turns the misery index on its head.

Homeowners Underwater (Calculated Risk)
From the WSJ: House-Price Drops Leave More Underwater “…Moody's Economy.com estimates that of 78.2 million owner-occupied single-family homes, 14.8 million borrowers, or 19%, owed more than their homes were worth at the end of the first quarter, up from 13.6 million at the end of last year.” And many of these borrowers are in danger of default if they experience a negative event (death, disease, divorce, unemployment, etc.)

U.S. Says Bank of America Needs $33.9 Billion Cushion (New York Times)
The government has told Bank of America it needs $33.9 billion in capital to withstand any worsening of the economic downturn, according to an executive at the bank. If the bank is unable to raise the capital cushion by selling assets or stock, it would have to rely on the government, which has provided $45 billion in capital through the Troubled Asset Relief Program. It could satisfy regulators’ demands simply by converting non-voting preferred shares it gave the government in return for the capital, into common stock. But that would make the government one of the bank’s largest shareholders.

Crisis: Who Is to Blame?: Banks that Financed Subprime Industry Collecting Billions in Bailouts (by John Dunbar and David Donald, Center for Public Integrity)
The top subprime lenders whose loans are largely blamed for triggering the global economic meltdown were owned or bankrolled by banks now collecting billions of dollars in bailout money — including several that have paid huge fines to settle predatory lending charges. These big institutions were not only unwitting victims of an unforeseen financial collapse, as they have sometimes portrayed themselves, but enablers that bankrolled the type of lending that has threatened the financial system.
Click through for the highlights, and for a link to the full report.—Caro

The PPIP: keep banks out by Lucian Bebchuk at Economists' Forum, Financial Times, U.K., thanks to Economist’s View)
Should banks with large amounts of troubled assets be allowed to participate as managers or investors in funds set up under the US’s public-private investment programme?... One problem with allowing banks clogged with troubled assets to participate on the buying side is that it defeats one of the programme’s main goals: to cleanse the balance sheets of these banks of troubled assets… The second problem with the participation of banks with large holdings of troubled assets on the buying side is that it will exacerbate the misalignment of interests between the private side in funds set up under the programme and taxpayers. To enhance the programme’s effectiveness and protect the interests of taxpayers, the interests of the private side - the fund’s manager and the private investors affiliated with it - should be aligned with the interests of taxpayers.
Protect the interests of the taxpayers? Economists are such comedians!—Caro

As Investors Circle Ailing Banks, Fed Sets Limits (New York Times)
[G]iant private equity players are circling distressed banks around the country, competing to buy into the industry. Bidding wars are now breaking out among private equity firms, including the Carlyle Group… [Emphasis added.] They and other investors see banks as the recession’s biggest prize: potential money machines that could one day generate fabulous returns, particularly after the federal government eats the losses of failed banks, then heavily subsidizes their sale. But … some of them would prefer to take over the banks completely, replace their managements and take all the profit.

With strings attached, banks can return taxpayer money (McClatchy)
Federal regulators are preparing to release new rules governing how banks can return billions in taxpayer bailout money… [B]anks would have to give up a special loan guarantee program in the process... Few banks are thought to be strong enough to both give up the money they received from the Troubled Asset Relief Program, and walk away from the loan guarantees. The guarantees give investors a much greater degree of comfort in buying bonds issued by the still-troubled banks… To get the TARP money, the government required the banks to agree to tough executive compensation rules and to swear off bonuses, travel on company jets and other perks reserved for top officials.
What’s to stop them from giving the money back, handing out big bonuses, and then coming back with their hands out again? Nothing.—Caro

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Carolyn Kay
MakeThemAccountable.com