Comments on: Bank of America Spends $7 Billion on Chinese Bank, Then Lays Off 30,000 Workers

By: Ian Welsh

Ian Welsh — Sun, 14 Dec 2008 20:56:09 +0000

Ummm, who cares if it was done before or after the layoffs? You trying to claim the two decisions were firewalled from each other? As for the call options, they didn’t have to be exercised.

And yes, it is very accurate to say that Bank of America spent 7 billion of taxpayer money and laid off workers.

You will also note that I say they shouldn’t have been allowed to buy up Merrill.

By: eggroll

eggroll — Sun, 14 Dec 2008 10:02:47 +0000

China Construction Bank is one of China’s four big state-owned banks. The Chinese state has spent billions ridding its balance sheet of non-performing loans so its shares can be acquired by other companies. The US government is also cleaning up balance sheets of its troubled banks. What seems to be happening is that banking has become too big for national borders or national loyalties. Banks just follow the money flows. America is the world’s largest creditor nation, and we are just beginning to see the implications of this. Jesus saves, Moses invests, and Confucius retains the controlling stake.

By: DonJefe68

DonJefe68 — Sun, 14 Dec 2008 03:34:04 +0000

I am not a Bank of America apologist, but I do want to make a correction to this timeline. The purchase in question was an exercise of call options taken out before the market crash. In addition, the relationship between Bank of America and the China Construction Bank goes back to 2006. Bank of America did not enter into a whole new relationship following the announcement of layoffs, nor was the exercise of the call options done after the announcement of layoffs.

Additionally, it is worth noting that these layoffs include the reductions in workforce due to the merger of Bank of America with Merrill Lynch. That doesn’t help anyone who was laid off, but those were hardly unexpected or counter to any expectation,.

There are plenty of reasons to criticize Bank of America, but to claim that Bank of America siphoned TARP money to take over a Chinese bank just prior to unexpectedly laying off tens of thousands is stretching the truth.

By: acquarius74

acquarius74 — Sun, 14 Dec 2008 00:49:04 +0000

Sounds intelligent and just, Rickbrew9x. The first big mistake was to put so much power in the hands of the stick-up man. Then the lack of strict requirements in the legislation is a total mystery to me.

Since the $350 Billion remaining should be in control of the new Sec. Treasury, I don’t see why he couldn’t do as you suggest in sentence 2.

Sentence 3 is the only sensible correction to the abuse that Bank of America just pulled off. Congress needs to call a special session Now, scrap the former legislation and succeed it with a new bill setting out strict regulations and also demanding that the banks who accept bail-out money must begin lending to businesses with good credit history within a set period of time or return the money to Treasury.

This entire fiasco is insanity!

By: Watson

Watson — Sun, 14 Dec 2008 00:11:56 +0000

This recalls 1982, when US Steel CEO David Roderick famously brushed off congressional criticism of plant-closings by saying that USS ‘is not in the business of producing steel, it is in the business of producing profits!’ A few years later, they changed their symbol from USS to USX.

By: Rickbrew9x

Rickbrew9x — Sun, 14 Dec 2008 00:05:46 +0000

As I understand the bail-out bill, the procedures for handing out the money are entirely up to the Secretary of the Treasury.

What if the new Secretary of the Treasury comes in and says that the use of (fungible) taxpayer funds to buy up a Chinese bank is not in the taxpayer interest and must be repaid to the treasury immediately?

That could put a real crimp on all purchases or mergers with financial organizations outside the U.S. Any banks that wanted to make such purchases or mergers would be required to forgo all U.S. taxpayer funds.

By: Rickbrew9x

Rickbrew9x — Sat, 13 Dec 2008 23:57:53 +0000

This shows a major flaw is supply side economics that conservatives ignore. The potential investors given the money will then invest it where the return is highest, normally outside the U.S.

That means that supply side trickle-down not only does NOT stimulate the American economy, it exports jobs to other parts of the world. That’s what globalized finance does. Trickle-down economics with tax cuts to the wealthy degrades the American economy.

By: peterboy

peterboy — Sat, 13 Dec 2008 23:23:15 +0000

why dont we just shoot ourselves.
for context, see the last depression as depicted in:
They Shoot Horses, Don’t They.

bankers could give two shits about us. We need some real conditions on the give away.

By: acquarius74

acquarius74 — Sat, 13 Dec 2008 22:08:57 +0000

Thank you, Ian. One of your best again. I had not heard of the BofA buying into the Chinese bank. So - - bottom line is that the US taxpayer involuntarily bought the Chinese bank stock and gave it to BofA, along with $8 Billion more for bonuses and miscl. expenses, huh?

I see a pattern emerging that I wish you would refute or support. I’m sure you haave read books like “Confessions of an Economic Hit-Man (John Perkins); The Best Democracy Money Can Buy (Greg Palast); and others telling about the same reports of how IMF, World Bank, World Trade Organization all co-operate in interfering in a country’s politics, bribing the corrupt/stupid rulers, talking them into big expensive projects to be built by Halliburton/Bechtel/KBR,etc., making big loans to them which they cannot pay resulting in heavy taxation of the citizens making them virtually slaves. We go in, strip their country of its resources, leaving devastation and pollution behind.

Well - - isn’t that what this economic meltdown is doing to America?

If this makes any sense to you, please help me out here.

By: T-Bear

T-Bear — Sat, 13 Dec 2008 22:07:09 +0000

The Timesonline has this report being in The Sunday Times. It has some interesting observations

Experts can only guess as we head into the unknown
American Account
Irwin Stelzer

http://business.timesonline.co.....336769.ece