i.justrealized

Rachel Maddow explains why to save the economy is to spend money and not to provide tax cuts and so on. Rachel Maddow Show – “…get out of the way of people who are actually trying to save the country.”

Rachel Maddow Show – “…get out of the way of people who are actually trying to save the country.”

• $1.00 in non-refundable tax rebates results in $1.02 of economic activity
• $1.00 in infrastructure spending results in $1.59 of economic activity
• $1.00 in food stamp spending results in $1.73 of economic activity.

USA dropped a stimulus package that is worth some 800 billion. Now I’m actually wondering what’s “bullpucky”, turns out it is a more polite way to say “bullshit”. Hmm… Then don’t say it! It ruins the whole point of using the word “bullshit”, if you can’t say it, don’t.

Ha! I love the Reddit title: Step 1) Bank of America needs and gets Bailout money, Step 2) BOA buys Merrill Lynch. Step 3)……….. Step 4) Bank of America needs Bailout money.

Banks in Need of Even More Bailout Money

In a sign of deepening fragility among the nation’s largest banks, the government is preparing to throw a new multibillion-dollar lifeline to Bank of America, several people briefed on the talks said Wednesday, the latest effort to stem a tide of growing losses in the financial system.

Bank of America, which was already granted $25 billion in capital from the Treasury’s Troubled Asset Relief Program in October, is seeking billions more to shore up its balance sheet as it struggles with mounting losses at Merrill Lynch, which it recently acquired, said these people, who were not authorized to speak publicly.

Bank of America’s shares fell 4.2 percent, to $10.20, in regular trading Wednesday, and are down nearly 30 percent this year. At one point in after-hours trading, the shares fell to their lowest level since 1991.

The government’s willingness to feed Bank of America a new tranche of taxpayer money comes on the heels of greater federal intervention in Citigroup. After pumping more than $45 billion in Treasury money onto its balance sheet, the government has put pressure on Citigroup to dismantle its troubled empire in an effort to stop losses and curb capital injections. (Source: The New York Times)

I wonder how would the Obama team respond to this.

Well if the banking industry gets it, why not the porn industry?

Porn Kings to D.C. – Help Us Through Hard Times

Joe Francis and Larry Flynt claim the economy has made America’s sexual appetite go limp, so they’re going to the one place where sex is always rampant — Congress.

Flynt (the “Hustler” guy) and Francis (the “Girls Gone Wild” dude) are asking the government for a $5 billion bailout, claiming the adult entertainment industry has taken a huge shot to the face because of the downturn — citing the fact that XXX DVD sales are down 22% from a year ago.

“With all this economic misery and people losing all that money, sex is the farthest thing from their mind,” Flynt says. “It’s time for Congress to rejuvenate the sexual appetite of America.”

Francis sees his industry like the big three automakers, only BIGGER: “Congress seems willing to help shore up our nation’s most important businesses; we feel we deserve the same consideration.”

Francis says he’s going to D.C. to personally make the pitch. Sounds like someone has a bone to pick. (Source: TMZ)

Of course I’m not suggesting you should bail out the porn industry. But seriously too much money has been poured to the bailout so US$5b for the porn industry? Perhaps this isn’t that significant after all

The U.S. government announced multi-billion dollar backstop for Citigroup. Citigroup, with $2 trillion worth of assets, is the largest U.S. bank by assets.

Too big too fail again?

U.S. Offers Citigroup Sweeping Safety Net

The Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. said last night they will protect Citigroup, one of the nation’s largest banks, against potential losses on a $306 billion pool of troubled assets.

Citigroup would absorb the first $29 billion in any further losses on these assets, which are primarily securities backed by mortgages and commercial real estate loans, with the government stepping in to cover most of the losses beyond that amount. In return, the government is to receive $7 billion in preferred shares in the company.

The government also will invest another $20 billion in Citigroup, on top of the $25 billion infusion of taxpayer dollars already made.

This time, though, the company in jeopardy is truly gigantic. Citigroup is the largest U.S. bank by assets, with $2 trillion on its books. (Source: Washington Post)

On other news, Bloomberg reports Goldman, Morgan Stanley May Want Citigroup:

Goldman, Morgan Stanley May Want Citigroup, CreditSights Says

A purchase of Citigroup Inc. would “significantly” add to Goldman Sachs Group Inc. or Morgan Stanley’s earnings as long as the U.S. government absorbed losses on the embattled bank’s assets, according CreditSights Inc.

Buying Citigroup “would be significantly accretive to Goldman and Morgan Stanley’s earnings as the potential buyer would be acquiring a significant future earnings stream for a relatively low price,” David Hendler, an analyst at CreditSights in New York, wrote in a report yesterday. The buyer “would probably receive government support if it was needed.” (Source: Bloomberg)

Erm… As long as what?

I wonder if this would set a chain reaction affecting finance related organizations in the US. If AIG really goes bankrupt, it would be the largest corporate bankruptcy in terms of assets. AIG has US$1 trillion worth of assets.

AIG struggles to survive financial tsunami

Insurer American International Group Inc struggled for survival a day after a financial tsunami swept away investment bank Lehman Brothers and forced the sale of rival Merrill Lynch in the biggest financial industry shake-up since the Great Depression.

The U.S. Federal Reserve has hired investment bank Morgan Stanley to review options for AIG — which has lost some 92 percent of its value so far this year — a person familiar with the situation said Monday.

Darkening one of the few bright spots from the weekend’s mayhem, Bank of America — which would surpass Citigroup Inc as the country’s largest bank by assets with the planned takeover of Merrill — saw its shares plunge. (Source: Reuters)

I have AIA policies. Regarding insurance policies, there likely be a takeover and the policy remains the same. If bankruptcy occurs for AIG, branches such as AIA (American International Assurance) probably be affected by value, but it doesn’t mean AIA would go bankrupt too.

I’ve been following the US finance thing a little, things don’t seem optimistic.