(8 am. – promoted by ek hornbeck)
The looting operation commonly known as the US Government’s financial rescue plan will accelerate now that we know the next move in this cynical game. Up to now, the hundreds of billions of dollars supplied by taxpayers to dishonest and incompetent financial institutions have been LOANS. In theory, at least, the recipients pledged to repay the taxpayers once their businesses recovered. Now we learn that Geithner and Summers, the embedded agents of Wall Street intend to convert these loans to STOCK. What’s wrong with that? Here’s what is wrong:
1. Common stock holders, unlike bond holders or secured lenders, have no assurance of any return on their investment. All they are entitled to are stock certificates and an invitation to the shareholders’ meeting. Bankruptcy of the company in which they own stock usually results in a TOTAL LOSS.
2. The voting rights of stock can be engineered to deprive certain classes of stockholders of representation. This can be done by subtle, incremental degrees, so that the public slowly loses the control that would properly be associated with a large equity position. All a crooked bank has to do is get the government to agree to convert its equity into a class of stock that has restricted voting rights. Since Geithner and Summers are Wall Street puppets, their complicity in this matter is assured. Anything that restores investor “confidence” in the markets is OK with them.
3. A large equity position usually translates into representation on the board of directors, another important means of control that should be available to taxpayers owning substantial amounts of stock in a company. However, the appointment of “zombie directors,” removes this threat to management. The government-appointed directors of AIG have already demonstrated their completely ineffectual presence and thus provided an impressive example of how not to represent the interests of taxpayers.
Conversion of US Treasury loans to stock without securing the rights of stockholders for the taxpayers is the perfect form of “nationalization” for Wall Street. The gangsters at Goldman Sachs, J.P. Morgan, Citigroup, and B of A will receive vast infusions of taxpayer cash, while continuing to operate irresponsibly and paying themselves lavish bonuses. The taxpayer “stockholders” will either lose everything in massive bankruptcies and reorganizations or receive nothing in return for their huge investment as their equity is rendered meaningless by cunning management maneuvering.
This is legalized looting of the Treasury, and Obama’s administration is directly responsible for it.