Bank of America is paying back the money. WOW – BUT……………………….

So Bank of America has unveiled a plan to repay the money that the Government gave them, opps sorry, provided to them as a loan via the TARP. As I listened to the story on NPR two key questions came to mind immediately. First is what is the government going to do with that money, pay back the debt or spend it stupidly. The second one is why are they paying it back now. I was, and am still, opposed to the TARP, the Troubled Asset Relief Program. What that actually means is bailing our dumb asses out because we got involved in so many bad investments and we are too big to fail, or WTAMIBODAOBWGIISMBIAWATBTF as I like to call it. I realize that does not roll off the tongue so I understand why they picked TARP instead. I was not in agreement when the red party gave away the 700 billion of our money (called TARP) in relief to the corporations who contributed mightily to this crappy economic situation we all find ourselves in. I was equally disappointed and outraged when the blue party gave away another 780 billion in the stimulus package. All that money, the bits we know about, and my shitty economic outlook has not improved one freakin bit. I on the other hand have been levied with more taxes, more of what they call fees and even the higher level of law enforcement passing out tickets like a drunk might throw beads in New Orleans. Bullshit I say!

Anyway, sorry for shooting off on a tangent, let me get back to Bank of America. Just the name irritates me, Bank of America, right. Might need to be Bank of overwhelming greed but then again that name could be applied to most of the gigantic, to large to fail financial organizations. They announced that they would repay 45 billion in tax payer money. Why, and why now? I see that their shares shot up 4.4% at 16.33 premarket on the repayment news. They had gained 11% over the year but this news had a fabulous outcome, fabulous for Bank of America. Fabulous for me and you, hardly and not so much. So how had the banking giant scrounged for the dough to pay the government back. Not through loans to normal folk, like was intended by the loaner, or us – but by using the same financial tools that they used to create the bubble in the first place. Trading stocks and bonds in the market. Seems to me a breech of contract but since they jammed TARP through the hallowed halls of our government in such a short time there was little time for detailed contracts, that may have slowed the process and what we ended up with is little more than a hand shake and wink, wink and a nod, nod. For 700 billion dollars – unbelievable.

So I thought, good, they are paying us back but then I got to wondering why. A company does not come to a 45 billion dollar decision easily, no matter the size. There must be an incentive, an incentive for Bank of America, not for us. It is nice to see the banking industry getting back on its feet, it is an important milestone in the government’s yearlong effort to stabilize the nation’s financial industry. BUT many, many ordinary Americans are still struggling with our day to day lives. Not only the worry of making ends meet at home but the worry about our means of support, our jobs. And at our jobs we are under increasing pressure to produce, we hear more and more the axiom, doing more with less. Doing more with less? What a BS thing to say, just like multitasking which is actually doing a bunch of tasks poorly instead of one task well. I am glad that the top tier of the finacial industry has been helped out but I am still confused because it has not helped me or my bottom line. Anyway, sorry I digressed there. So I also learned that with the loan still outstanding to the government there were still the restrictions on salaries Bank of America is able to pay the management.

So there it is! With Bank of America’s beleaguered leader, Kenneth D. Lewis, reaching the end of his tenure, it is only weeks away as a matter of fact. He, of course, sees the turnabout as particularly sweet. Mr. Lewis was run out of his role as chairman and then from his post as chief executive after the bank’s controversial takeover of Merrill Lynch last year. Yet under his tutelage he has managed to extricate Bank of America, not long ago regarded as one of the nation’s most troubled big banks, from Washington’s grip. Once out from under the Federal oversight of executives pay it frees them to go and hire some other overpaid suit to run the business. The bad thing, in my humble opinion, about the bailout, is the oversight of these monstrous institutions will be disappearing. Don’t get me wrong I do not think the government is qualified to provide oversight on the water cycle of my yard let along something this important but in this case I think it helped. I am glad they are paying the money they got in two bailouts back, that leaves only Citigroup and GMAC standing, alone as the only giant banks that have received such extraordinary aid, although other banks big and small have yet to repay single bailouts. I suspect some shading dealings in where they got the money but at least we are getting it back, or are we?

That leads me to the other question, what is the government going to do with the money? Will it go into the general fund or will it be squandered on ridiculousness without our knowledge? I do not and have not heard any conversations about how that money will be used when it comes back in, have you? Through simple observation I have noticed that politicians can not leave any money in the check book. What would be even better is to shift it out of the checkbook, by paying the people who loaned us the money – mostly the Chinese. Not that that is a bad thing, they bailed us out with the billions in investment in our government and I say thank you for hedging a long shot gamble on that investment. BUT we must remember, as long as we are indebted to them we are also beholden to them. Just like the institutions that hold notes for our consumer loans and credit cards, we are stuck with them and in most cases at their mercy. Who hasn’t seen their credit card interest rates jump up arbitrarily over the last year or two. We need to be vigilant in demanding that our elected officials pay this debt off with the money that is coming in from the various TARP recipients. I would bet the that money will likely be spent on other “crisis’s” that will pop up along the way.

I am not sure about ya’ll but I am skeptical as hell about my Governments ability to be honest, upright and do the right thing – about ANYTHING. I suspect that money will fall through the cracks, hell 45 billion is nothing. That is another issue that I have, they have successfully ruined our sense of scale when it comes to the size of these issues. Just for fun I did a bit of math to help he get the HUGE numbers of money we are talking about. A United States 100 dollar bill is .0043” thick. Well simple math will quickly tell you that just how crazy it is. A ONE billion dollar stack on $100 bills would stretch up 67 miles – YEP SIXTY SEVEN miles. So using that math we can extrapolate to 45 Billion. That stack would be a bit over 3000 miles, three thousand miles of 100 dollar bills stacked flat sides together. That is all the way across this great country. Now you want to see something stunning. Using the numbers that they gave away, the 700 in TARP and 780 in stimulus money it comes to 99,160 miles or, OR a stack of 100 dollars bills that reaches damn near half way to the moon. To get that far last time we only spent about 25 billion for the entire space program. I fear that this loss of understanding of the scale of money we are talking about it how they are getting away with it. That amount of money is incomprehensible to me, I do not even understand it. Another example of it would be this, if you could maintain counting, continuously and each number took two seconds it would take you over 62 years to count to one billion or, OR 91,760 years to count up the 700 and 780 billion added together. That is right damn near 10 Millennia and you know what, the Pleistocene era ended 12 thousand years ago – that was the end of the last ice age. That is how crazy those numbers are!

Anyway you get the point on the scale that is being used here. I have other concerns as well, concerns about the lenders calling in the markers. That I suppose is a oratory for another day though.