Bloomberg: 8 TARP recipients blow $845 million on stadium deals

Citigroup, Inc., targeted by lawmakers for paying $400 million to put its name on the New York Mets’ new ballpark, and seven other banks that received government funds may face questioning by Congress for spending $845 million on stadium sponsorships.

Bank of America Corp., which like Citigroup received $45 billion in government funds, is paying $140 million to have its name on football’s Carolina Panthers stadium. JPMorgan Chase & Co., which received $25 billion from the Troubled Asset Relief Program, is spending $66 million for branding Chase Field in Phoenix, home to baseball’s Arizona Diamondbacks.

The eight banks received a total of $153.4 billion from the $700 billion U.S. bailout and are spending a combined $845 million for naming rights. U.S. banks have had $745 billion in losses and writedowns since the subprime mortgage crisis began in 2007.

~ Bloomberg, "Citigroup, Seven U.S. Banks Spend on Stadium Deals ," February 5, 2009

Associated Press on the trouble with saving

Americans are hunkering down and saving more. For a recession-battered economy, it couldn't be happening at a worse time.

Economists call it the "paradox of thrift." What's good for individuals -- spending less, saving more -- is bad for the economy when everyone does it.

~ Associated Press, "Rise in savings hurting economy," February 2, 2009, by Martin Crutsinger

Alan Blinder on the expected waste from Obama's economic stimulus package

Advocates of more spending should also worry more about the quality of the projects and the government's ability to manage them effectively. The numbers are huge. For reference, total appropriated federal spending (excluding entitlements) is now running just under $1 trillion per year, and well over half of that is for national security. Thus, a $300 billion increase in annual civilian spending would boost that part of the budget by about 70%.

What government, or what company for that matter, can manage a rapid 70% budget increase without some waste, fraud and abuse? With legions of journalists waiting to write about exactly that, I worry that their stories might give the very idea of stimulus a bad name.

~ Alan S. Blinder, professor of economics and public affairs at Princeton University and former vice chairman of the Federal Reserve Board, "My Economic Wish List," WSJ, February 4, 2009

Harry Markopolos on Bernard Madoff ponzi

Madoff's math never made sense, his performance charts were clearly deceiving, and his return stream never resembled any known financial instrument or strategy... to believe in Madoff was to believe in the impossible. The biggest, most glaring tip-off that this had to be a fraud was that Madoff only reported three down months out of 87 months whereas the S&P 500 was down 28 months during that time period. No money manager is only down 3.4% of the time. That would be equivalent to a major league baseball player batting .966, and no one suspecting that this player was cheating.


~ Harry Markopolis testimony to Congress, Bloomberg, February 4, 2009

James Bovard on George W. Bush cloaking his foreign policy in "freedom"

Perhaps no American president has praised freedom as often as George W. Bush. From his declarations that the United States was attacked because of freedom, to the names “Operation Enduring Freedom” and “Operation Iraqi Freedom,” to his proclamations of a “calling” from history to defend freedom, freedom quickly became the cloak draping all of Bush’s actions after 9/11.

This past July 24, President Bush celebrated “Captive Nations Week” by giving a speech on advancing his “freedom agenda.” The captive audience at the federal Ronald Reagan Building and International Trade Center was chock full of bureaucrats, so no hoots were heard and no dead cats were thrown on stage, despite the president’s absurdities. The bureaucrats were buttressed by many limousine loads of foreign diplomats, to add tone to the event.

~ James Bovard, "More Bush Freedom Hokum," LewRockwell.com, January 29, 2009

Harold Evans on John Thain's bonus and spending sprees at Merrill Lynch

In the few days in December while he was still in charge, Mr Thain reportedly spent nearly $4bn on staff bonuses. That's peanuts on Wall St. In 2007 Mr Thain himself received $83m.

But a week ago, CNBC's Charles Gasparino, in a detailed scoop on the Daily Beast website revealed that during the time Mr Thain was busy cost-cutting, he spent $1.1m doing up his office - $86,000 for a rug, $35,000 for something called a commode on legs.

Readers bayed for blood, posting comments such as: "Oh how I wish this was Revolutionary France and we peasants could storm the offices…"

~ Harold Evans, "Banker + gangster = bankster," BBC, January 30, 2009

Harold Evans: JP Morgan's influence on Calvin Coolidge

The great banking house of JP Morgan had the president [Calvin Coolidge] on a "preferred list" by which the bank's influential friends were given a chance to buy stock at half price. Shall we say, they made out like bandits?

~ Harold Evans, "Banker + gangster = bankster," BBC, January 30, 2009