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In 2008 the Bush Admin proposed a 700 billion bail out of the economy (7 ).

Of the above remove $17.4 billion for General Motors Corp. and Chrysler LLC for their own bail out program to avoid bankruptcy (8 ).

The above programs are loans, if all works well should get repaid. But who knows if the above will once again seek fine tuning of the program ie more money. Bill are you still sure "We have done right by the American people"?

Part of the recovery/bail out program was stress tests on the banks. Stress tests are routinely used by regulators and internal auditors to help mange a financial institution risks and aid in the institutions stability. It's unusual to have stress tests done this publicly, though (9 ). On the face of it seemed like a good move to determine were to go, but...

Members of staff of the Federal Deposit Insurance Corp. (FDIC) have said that the "stress" tests the Treasury Secretary did were "pointless exercise". Professor of economics and law at the University of Missouri, and former senior bank regulator and savings and loan prosecutor William Black said the tests were "a complete sham," and it was "It's a Potemkin model. Built to fool people," (10 ).

With the stress tests complete an accountant at Robins, Kaplan, Miller & Ciresi, Richard R. Zabel, reminded us "Now we have to deal with reality, and until you remove toxic assets, they are going to be an issue. If we continue to have home foreclosures and high unemployment, the value of these assets are going to continue to deteriorate." (11 ).

Preliminary results of the tests showed that At least seven of the 19 banks tested, needed 65 billion in fresh capitol, a few are
Bank of America ($34 billion)
Wells Fargo ($13 billion to $15 billion)
GMAC ($11.5 billion)
Citigroup ($5 billion)
Morgan Stanley ($1.5 billion)(12)

In reality 10 banks needed additional money to become stable. This ( 142 billion total ) money was gotten from the TARP. Program, by the fall of 2009 the federal reserved asked nine of the banks to submit a payment schedule to repay the money (13 ). This is due to the banks ability to raise enough money to ensure stability (14 ).

Things that make you wonder about the need and the program.

In April 2009 a government watch dog launched a investigation into some recipients of the multi hundred billion dollar bait out. Some of the recipients of the Treasury Department's Troubled Asset Relief Program (TARP) are being investigated for possible public corruption; corporate, stock and tax fraud; insider trading; and mortgage fraud. A report said "Those who make intentional misrepresentations in the TARP application process or in their financial reporting to Treasury may be in violation of several criminal statutes," (15 ).

A number of Executives of financial firms who received bail out cash received bonuses shortly after receiving the federally funded money. In their defense Bank of America spokesman Scott Silvestri said "People want to work here, but they want to be paid fairly,". President Obama said "We don't disparage wealth, we don't begrudge anybody for doing well, we believe in success," and also said "But it does offend our values when executives of big financial firms -- firms that are struggling -- pay themselves huge bonuses even as they continue to rely on taxpayer assistance to stay afloat."(16 ).

The bonus of the bailed out banks were hefty. New York State Attorney General Andrew M. Cuomo released a report called "No Rhyme or Reason: the 'Heads I Win, Tails You Lose' Bank Bonus Culture" in it he said "Compensation for bank employees has become unmoored from the banks' financial performance.". It also said "Citigroup and Merrill Lynch suffered massive loses of more than $27 billion at each firm. Nevertheless, Citigroup paid out $5.33 billion in bonuses, and Merrill paid $3.6 billion in bonuses. Together, they lost $54 billion, paid out nearly $9 billion in bonuses and then received TARP bailouts totaling $55 billion.(17 ).

Many of the banks that got aid to increase lending used it for other purposes. Of the 360 banks that got money in January 3009 110 invested at least some of the money, 52 repaid debts 15 used the money to buy new bank. about eighty percent said at least some of the money went to new lending (18 )


Xerox, corruption, SEC, improper payments, accounting improprieties,  U.S. Securities and Exchange Commission, India, accounting, improper, Private contractors, Iraq, Army , Government Accountability Office