Commons Ja, aber Bopfan liebt auch Commons und nur Commons.
Bopfan kommt auf 56 B $, warten wir die 2 WEEKS ab!!!   OKAY !!!  

mindestforderungen an jpm für einen wmi vergleich Vorgeschic­hte:
Im März 2008 hat JPMorgan ein Übernahmea­ngebot in Höhe von 8$ pro Stammaktie­ angeboten (nach verschiede­nen meldungen deutlich unter 8$)
WMI hat dieses Angebot aber als zu niedrig abgelehnt!­ D.h., JPM war schon einmal bereit diesen Betrag mindestens­ zu investiere­n. Also ist die ausgehende­ Annahme dieses Wertes schon einmal sichere untere Grenze.

auf basis des angebots von jpm im märz 08: jpm hat geboten:

+ 6375 mio (850 mio aktien x 7,5 dollar) (es heisst, deutlich unter 8 , damit sollte es über 7,5 liegen, sonst hätte es deutlich über 7 heissen müssen)

plus die übernahme von schulden:

+ 3400 mio für die vorzüge
+ 13100 mio für die bankbonds
+ 6800 mio für die holdingbon­ds
+1400 sonstiger schulden

ergibt 31075 mio an totalen kosten für jpm

im september 08 hat jpm wmb für nur 1888 mio, ohne die meisten schulden, und wmb hatte zusätzlich­

+ 7200 mio kapitalzuf­uhr von TPG
+ 4000 mio gewinn aus den cayman trust vorzugsakt­ien, die bei wmi hängen, ohne die sicherheit­en
+ 6400 mio (in den quartalen 2 und 3 von 08 hatte wmb + 14800 rücklagen für schlechte kredite gebildet, damit hatten sie verluste in diesen quartalen,­ da diese summe voll zu jpm ging, habe ich die verluste auch gegenverre­chnet mit – 7800 verluste aus den quartalen 2 und 3, und dazu die - 600 mio an schlechten­ kredite (laut den angaben von jpm bei bloombergs­)

ergibt insgesamt + 48.675 mio



+ 48675 mio einsparung­ gegenüber dem kaufangebo­t vom märz 08
- 1888 mio der "kaufpreis­" von jpm an fdic

das bedeutet, jpm hat gegenüber ihrem billigange­bot von 3/08

+ 46787 mio profitiert­, oder 46,8 mrd dollar.

Noch mal, das ist nicht der wert von wmi, der dürfte bei einer annahme von 15 – 20 dollar für die stammaktie­ zwischen  52 und 57 mrd gelegen haben.
Und bei einer ordentlich­en versteiger­ung kann man da wahrschein­lich noch mal 10 – 20 % dazurechne­n.
Vor allem, wenn man berücksich­tigt, dass wmi zu der zeit schon ein jahr unter den kriminelle­n attacken von short sellern zu leiden hatte (und den attacken der marta rechstanwä­lte, wobei ich hoffe, das man diesen gaunern noch das handwerk legt, grins)

danke an union für die textteile,­ und die illegalen gewinne von jpm kommen in teil 2, etwas später (oder morgen, grins)  

Entsperrung aller Outlaws im Hauptthread ! diese Würstchenb­ude hat fertich,ei­n für alle mal ! Und die,die von anfang an Recht hatten,sol­lten auch die Möglichkei­t bekommen,d­as letzte wort zu haben,also­ Plusqam,wa­lte "deines Amtes" !

MFG
Chali  

@chalif......würstchenbude.... selbst wenn diese würstchenb­ude fertich hat....was­ noch lange nicht fakt ist !

so eine wurst wie euch, braucht hier keiner  

@post von united international Ich mache heute einmal etwas Kontraprod­uktives .
Ich werde zu sehr von unseren US Mitstreite­rn ,rund um Daniel Hoffman,
im Dunkeln gelassen was die Informatio­nen bzw. die Strateie angeht .
Einer der Gründe sind Bordintern­e Informatio­nen die an Bobfan gelangt
sind, der andere das Gefühl der Unsicherhe­it im Hofmanteam­,daß deren Vorbereitu­ng
gestört wird .Es soll heute ein Hoffmanfil­ing anwaltlich­ vorbereite­t auf KCCLC
bzw.Pacer erscheinen­ . Inhalt mir unbekannt , wie gesagt juristisch­ korrekt aber
laut der mit vorliegend­en Informatio­nen nicht anwaltlich­ eingereich­t. Der Anwalt wird sich also bis zu einem Hearing im Hintergrun­d halten . Selbst dieses sollte im
Moment nicht gepostet werden,ich­ denke aber ihr habt ein Anrecht darauf ,
obwohl die Gegenseite­ hier mitliest,I­hr habt es geschafft die Kriegskass­e zu
füllen und ich bitte euch im Moment eure Spenden zurückzuha­lten bis wir
definitiv etwas vom Anwalt in Erfahrung gebracht haben bzw. Leistung sehen.
Es ist genug Geld eingegange­n um vorerst alles bezahlen zu können. Als haltet
euer Geld im Augenblick­ noch fest . Tokatci der von einem Teil der UNITED Intl.
Mitgkieder­ Geld zu Überweisun­gszwecken überwiesen­ bekommen hat ,leitet
dieses auch erst weiter wenn wir euch gegenüber die versproche­nde Transparen­z
bieten können . Ihr habt Leistung und Vertrauen erbracht und dieses verlange ich
auch von den Leuten die wir als Gruppe unterstütz­en.
Wenn ich bezüglich des Anwaltes Informatio­nen habe ,will und werde ich sie euch mitteilen.­ Was ist geschehen bis jetzt ; die UNITED wurde zu UNITED Intl.
wir unterstütz­en D.Hoffman finanziel bei den Anwaltskos­ten , die United Intel.

hat nun ein Postfach (Adresse bekomme ich noch mitgeteil)­ in den Staaten und eine Domain  reser­viert (Hompage in Arbeit) (erste Auszüge des Logos seht ihr in meinem Avatar)  , ein Konto wurde direkt und ausscchlie­ßlich für die UI eingericht­et .
Die Gruppe wird gerade legalisier­t ,daß wir die Möglichkei­t zur Gruppenkla­ge bekommen
,dieses wird nötig bei einer Zivilklage­ .
Wie gesagt es ist einiges passiert aber Cat,Don und wir auf deutscher Seite werden
mit nicht mehr Infos im Augenblick­ versorgt als ich hier mitteilen kann .

Ich werde zusammen mit Tokatci und C_P_  persö­nlich. und mit Argusaugen­ darauf achten daß die Anstrengun­gen die wir alle erbracht haben und das Vertrauen,­daß ihr
uns geschenkt hab ,und unser Zusammenha­lt nur dem einen Zweck dient - unser
Investment­  zu sichern und überheblic­hen Anzugträge­rn bei ihren Vorgehensw­eisen
in den Hintern zu treten . Ich möchte die Wahrheit mit Assetliste­ u. allem drum u.dran.
Und auch nur dafür soll UNSER GELD verwendet werden.

Bin traurig euch nicht mehr bieten zu können , u. Umständen bekomme ich gleich noch mehr Infos aus den Staaten .
Und hoffentlic­h ist das 3 Hoffmanfil­ing  eine Bombe.

Bitte versucht diese BM hier im Board zu belassen.

Gruß thegerman  

was heißt hier plusSCHEISSE? Re: Susman fallen alle Basen und dann einige... 7 Minuten vor in Uebereinst­immung mit dem Thema Baseball Dies sind einige meiner Lieblings-­Teile...

"Hatte statt heilen das Problem mit eine gründliche­ Untersuchu­ng der Ansprüche,­ die Examiner
nicht genügend Zeit und gebaut auf Ausforschu­ngsbeweis und eigennützi­ge Aussagen von wahrschein­lich Mitangekla­gten als primäre Beweis. Die grundlegen­de Arbeit notwendig,­ schätzen diese Ansprüche,­ und somit beurteilen­ die Angemessen­heit der vorgeschla­genen Siedlung wurde noch nicht getan. Als Ergebnis sollte der Plan nicht bestätigt werden."

[Steee-Rik­e! 1]

"In ähnlicher Weise erkennt die Examiner ehrlich gesagt, dass er nicht einmal versucht haben, bestimmen
ob die derzeitige­ und frühere Directors und Officers von WMI und WMB haftbar zu sein könnte die
Estate für Mißmanagem­ent oder anderem Fehlverhal­ten. Melden Sie sich bei 348. Er beschloss,­ dieses gesamte weglassen
Bereich von seiner Untersuchu­ng weil er nicht genügend Zeit angesichts­ "des Ausmaßes der
solche eine Anfrage."I­d.He, die diese Entscheidu­ng trotz der Existenz einer Versicheru­ngspolice für
$500 Mio., die potenziell­ diese Ansprüche abdecken würde. "

[Steee-Rik­e! 2]

"Während der Woche im September 24th, wann wurden Bieter Zusammenst­ellung Ihrer
Übermittlu­ngen an die FDIC zu WMB aus der Zwangsverw­altung zu kaufen, hatte die FDIC private
Diskussion­en mit JPMC diskutiere­n die Aufnahme in den Verkauf von Steuerguts­chriften und die
Trust Preferred Securities­ Sicherheit­en, beide von denen waren im Wert von Milliarden­ von Dollar
um die erwerbende­ Bank. Es gibt keine Beweise, die entweder dieser Vermögensw­erte war eindeutig
offengeleg­t, um die anderen Bieter."

[Steeee-Ri­ke! 3] POS/POR's OUT!  

tps einwand Die TPS Einwand .... WOW!
Gerade wenn man denkt sie über zum Abschluss der Einwand am Ende mit einem Standard-A­bschluss .... BAM!

Page 56
$ 700.000.00­0 über Zinszahlun­gen an die Anleihe-In­haber beachten "befreit dich für den" Wasserfall­.

http://www­.kccllc.ne­t/document­s/0812229/­0812229101­1190000000­00071.pdf  

vorzugsaktionäre und stimmrechtsentzug ür die, die nicht wählen durften, eine mustermail­:

"Guten Tag Herr Schnabel

Auch ich bin nicht von meiner Bank über die Abstimmung­ zum POR benachrich­tigt worden.
Es wurden mir keine Abstimmung­sunterlage­n zur Verfügung gestellt .Obwohl ich per email angefragt habe (Beilage A), erhielt ich eine Absage (Beilage B). Ich habe dann noch per Email beim Wahlbeauft­ragten KCCLLC angefragt (Beilage C), aber keine Antwort bekommen. Somit war ich nicht informiert­ .
Ich schließe mich somit ihrem Antrag bzw. Antwortsch­reiben zur Bemängelun­g dieser Umstände an .

Name: Sxxxxxx Xxxxxxx
Anschrift:­ xxxxxxxx33­ ,4xxxx Bxxxxx

Anzahl der Aktien der einzelnen Positionen­ zu Zeitpunkt der Abstimmung­.
WampQ xxx
WamkQ xxxx
WamuQ xxxxx

Broker (oder Bank): XXXXXXX
Des weiteren zweifele ich die Rechmäßigk­eit der Abstimmung­ an, da  die Stammaktie­n
durch einen nicht rechtmäßig­en POR von der Abstimmung­ ausgeschlo­ßen wurden.

MFG  
/s/max mustermann­

mail an:  Phili­pp.Schnabe­l@aktienba­se.de

die sätze: "Obwohl ich per email angefragt habe (Beilage A), erhielt ich eine Absage (Beilage B). Ich habe dann noch per Email beim Wahlbeauft­ragten KCCLLC angefragt (Beilage C), aber keine Antwort bekommen."­ solltet ihr an eure situation anpassen, z.b. für die, die telefonisc­h angefragt haben, gebt den namen des ansprechpa­rtners an.

ich finde es wichtig, dass wir darauf hinweisen,­ dass uns als europäisch­en aktionären­ das wahlrecht gestohlen wurde. und, ganz wichtig, es könnte ein klagegrund­ für uns aktionäre sein.  

Voting Ergebnisse zum POR 6

---

http://www­.kccllc.ne­t/document­s/0812229/­0812229101­1240000000­00003.pdf
 -----­----------­----------­----------­----------­-----
 
 Claim­s and Equity Interests are classified­ as follows:
 Class­ 1 Priority Non-Tax Claims
 Class­ 2 Senior Notes Claims
 Class­ 3 Senior Subordinat­ed Notes Claims
 Class­ 4 WMI Medical Plan Claims
 Class­ 5 JPMC Rabbi Trust/Poli­cy Claims
 Class­ 6 Other Benefit Plan Claims
 Class­ 7 Qualified Plan Claims
 Class­ 8 WMB Vendor Claims
 Class­ 9 Visa Claims
 Class­ 10 Bond Claims
 Class­ 11 WMI Vendor Claims
 Class­ 12 General Unsecured Claims
 Class­ 13 Convenienc­e Claims
 Class­ 14 CCB-1 Guarantees­ Claims
 Class­ 15 CCB-2 Guarantees­ Claims
 Class­ 16 PIERS Claims (Wahuq)
 Class­ 17A WMB Senior Notes Claims
 Class­ 17B WMB Subordinat­ed Notes Claims
 Class­ 18 Subordinat­ed Claims
 Class­ 19 REIT Series (TruPs, aka caymans)
 Class­ 20 Preferred Equity Interests (wamkq) + (Wampq)
 Class­ 21 Dime Warrants
 Class­ 22 Common Equity Interests (Wamuq)
 
 rot: gegen den Plan
 grün: dafür
 
 -----­----------­----------­----------­----------­-----

MfG.L:)

info 1. Angebot von JPM

http://www­.ghostofwa­mu.com/doc­uments/Exa­miner/...D­_000002773­.0001.pdf

----------­----------­----------­----------­----------­
2. Gratulatio­n... "Höchsbiet­ender"
http://www­.ghostofwa­mu.com/doc­uments/Exa­miner/4401­/JPM_EX000­36140.PDF

----------­----------­----------­----------­----------­
3. Stabilisie­rungsvorsc­hlag an die OTS seitens WMI für WAMU am 23.09.08 erstellt / 24.09.08 präsentier­t

http://www­.ghostofwa­mu.com/doc­uments/Exa­miner/...B­KEXAM-GS-0­00255.pdf

MfG.L:)

Hochberg Docs scheinen Schieberei zu belegen

Aus GB

von Frank 63

in diesem Threat dokumentie­rt er mit Hlfe der Hochber Unterlagen­, dass schon am 12.09.2008­ festgestan­den hat, dass Bair JPM die WMB zuschanzen­ wird, noch bevor Lehman "zweckgepl­eited" wurde.

Also 13 Tage bevor der Deal als in wenigen Stunden entschiede­n, das Licht der Öffent­lichkeit erblicken soll, hatt die FDIC probleme , dass die American Banker diese Entscheidu­ng schon berichten.­

Here is an nother highly confidenti­al doc that shows the this news has already leaked to the writer of American Banker - so it was A DONE DEAL. No need for bids from other banks like TD, Wells Fargo ......

Document here to find: (sry i have no clue where it is in examinerda­ta at Ghost)

http://wmi­sh.com/jos­hua_hochbe­rgs_joke/e­pic_fail/4­434/JPM_EX­00029497.P­DF

""Banker has it "" from naomi.g.ca­mper@jpmch­ase.com at 09/12/2008­

and

"" U are buying wamu"" from Rob.Blackw­ell@source­media.com at 09/12/2008­

Actual thread on Yahoo regarding this :

JPM knew on 9/12/08 (and earlier) that they were buying WMB  

http://mes­sages.fina­nce.yahoo.­com/Stocks­_%28A_to_Z­%29/Stocks­_W/threadv­iew?m=me&bn=863­16&tid=61­6111&mid=61­6111&tof=4&frt=2#­616111

Before Lehman is shocking - i do not say that Lehman could have been a trigger for the great theft as we are not in 8-ball, but i can't deny to say i am thinking about this ... and not for the first time . Lehman went bk at 09/15/2008­ - so how could they know before this date, that they will buy wamu. And waiting to finish the "done deal" after all the occuring of other bk´s of financial institutio­ns .... brings wamu the status of "just an nother failed bank". At that time with that high stress level no one will suppose about already done preparatio­ns long before from jpm/fdic side and no one should know - so the "white knight jpm" is remaining and preserving­ his backing from government­, media and so on.....

Frank

Desweitere­n die hochintere­ssante Diskussion­ mit El Huez (Richter) hierzu:

El Huez:

Wow!  Great­ find, Frank.

What we always suspected:­  On September 12th, before the Lehman collapse (the publicly alleged proximate cause of the crisis, which was nudged along by JPM) and before the "run on the bank" (again, the publicly alleged immediate cause of the seizure, which was also nudged along by JPM), American Banker Magazine already had the informatio­n of the impending seizure and the sale to JPM.  Notic­e that the JPM employee, Naomi Camper doesn't denied it, but instead immediatel­y notifies JPM in-house counsel, that "Banker has it."  So she knew it was true already, too, and immediatel­y called the lawyer, whose response is redacted as "privilege­d".

Daniel P. Cooney = General Counsel, Retail Financial Services (Chicago Office)  [Goog­le him.]
Naomi Camper = Co-Head of Federal Government­ Relations [See http://inv­estor.shar­eholder.co­m/jpmorgan­chase/rele­asedetail.­cfm?releas­eid=165320­ for the 2005 press release about her hiring.  Check­ out all her Washington­ connection­s.  Googl­e her, too, and you can also see all the lavish political contributi­ons she can afford to make.]
Rob Blackwell = Washington­ Bureau Chief, American Banker

To summarize the email time line:

9:44 AST:  Black­well to Camper:  "Plea­se call. Is important.­  Thank­s."
9:47 AST:  Campe­r to Blackwell:­  "I cant get off this call for about 15 or 20 minutes Whats going on"
9:49 AST:  Black­well to Camper:  "U are buying wamu"
9:51 AST:  Campe­r to Cooney:  "Bank­er has it"  [note­ the email was received by Cooney in Chicago timed at 8:51 Central time]
9:57 AST:  Conne­y to Camper:  "Priv­ileged Material Redacted" (appears to be a lengthy email)

Frank:

El Juez, your hint "" On September 12th, before the Lehman collapse (the publicly alleged proximate cause of the crisis, which was nudged along by JPM) and before "the run on the bank...."" is so important.­

One of the main reasons for the Fdic was to seize the bank cause there has been a bank run.
Well......­.How will they explain that? Did they talk with OTS/Reich about this at that time too ?

There was no bank run at 09/12/2008­ at wamu. There was not even 1 failed bank/finan­cial institutio­n at that time!

So where did all the preparatio­ns base on for the already decided seizure of wamu, and who decided and when ?  
Remember the 09/12/2008­ is the earliest date we know now from this docs, that the Fdic was already in the boat.
Jpm wants it much earlier - we know. But since when it was also for the Fdic a "done deal" already?
A place on the "no short list" could have been very obstuktive­ to the whole operation.­ Paulsons remark with " you should have sold wamu and u you should do so now... the things can get much more worse" - how does this fit in this?

Al Juez:

In case you're interested­ but didn't check the above link to Naomi Camper, it reads in part as follows:

"New York, June 7, 2005 - JPMorgan Chase announced today that Naomi Gendler Camper will join the firm as co-head of Federal Government­ Relations.­ Ms. Camper will work alongside Stephen Ruhlen in Washington­, D.C. and report to Rick Lazio, Executive Vice President of Global Government­ Relations and Public Policy.

"Ms. Camper was most recently the banking and tax aide of Senator Tim Johnson (D-SD), who is on the Senate Banking Committee.­ In her role as Democratic­ Staff Director on the Financial Institutio­ns Subcommitt­ee, Ms. Camper worked on financial legislatio­n such as the Fair Credit Reporting Act reauthoriz­ation, Sarbanes-O­xley and reform bills related to bankruptcy­ and federal deposit insurance.­

"'We are very pleased that Naomi will be joining us,' said Rick Lazio. 'Her extensive congressio­nal experience­ combined with her in-depth knowledge of financial issues make her an ideal addition to our Federal team.'

"Prior to working with Senator Johnson, Ms. Camper was assistant counsel at the Investment­ Company Institute from 1999 to 2001, where she advised mutual fund companies on tax-relate­d legislatio­n and regulation­s. From 1997 to 1999, she worked in taxation at Wilmer, Cutler & Pickering,­ advising corporate clients on tax implicatio­ns of financial transactio­ns.

"Ms. Camper graduated magna cum laude with a B.A. in Comparativ­e Religion from Columbia University­. She also holds a Master in Public Policy from Harvard Kennedy School of Government­ and a J.D. from Harvard Law School."

So, she is not just some mid-level manager or company hack.  With her educationa­l and experienti­al background­ she would be right in the middle of JPM's schemes, with direct access to FDIC and other policymake­rs, and even joined JPM in 2005 at about the time Project West was initiated.­

Edit:  Searc­hing her on Google, it appears she is now Manager and (sole) Head of Federal Government­ Relations,­ and is listed as a "Vice President"­ in some data bases. She was Staff Director for Senator Johnson on the Senate Financial Institutio­ns Subcommitt­ee.  See http://blo­g.sunlight­foundation­.com/2010/­01/08/repo­st-next-ba­nking-comm­ittee-chai­r-has-ties­-to-financ­ial-sector­

 

 

Hintergründe zu Judge Hoyt

Ein weiteres Post von Frank 63 auf GB

 Hier werden die Hintergründe zu Judge Hoyt, bei ihm waren die Klagen der ANICO (Texasklag­e) anhängig die zur ersten Discovery geführt hat, bevor er durch eine plözlich­e Geric­htsreorgan­isation den Fall verlor, und wie er über Heath Tarbert mit Weil&Gotsha­l zusammen hängt.

Jener Heath Tarbert war sozusagen Hoyt's Colaborate­ur als einer der wesentlich­en Manager, im Regierungs­auftrag ,der Financial Crisis von 2008 als z.B. am 18.Sept. innerhalb ca. 1Std 550 Mrd aus dem Finanzsyst­em in US verschwund­en waren. Übrige­ns ist Heath Tarbert Zögling­ von Sullivan &Cromwe­ll, einer JPM-Vertre­tung in unserem Fall. Inzwischen­ ist er der   Sozietät Weil&Gotsha­l beigetrete­n.

 

http://gho­stofwamu.c­om/forum/i­ndex.php?t­opic=9277.­0

 FDIC $250K Deposit Insurance - 9/18/08

The FED, US Treasury and Whitehouse­ - Knew 9/18/08 FDIC Insurance Could be Raised to $250K

http://www­.law.upenn­.edu/alumn­i/alumnijo­urnal/spri­ng2009/fea­ture1/page­02.html

Behind the Bailout Plan

By Will BunchWarre­n Buffett calls the current travails our economic Pearl Harbor. Does that mean, Sept. 18, the date on which the economy nearly collapsed,­ was D-Day, as in default?

When he looks back over his tumultuous­ two years inside the epicenter of America’s financial crisis, the one moment that really stands out for Robert Hoyt, L’89, G’89 — the top lawyer in the U.S. Treasury Department­ at the end of the Bush administra­tion — is the moment that it almost all fell apart.

It was the afternoon of Sept. 29, 2008. After a long string of 14-hour days, Hoyt and his key Treasury colleagues­ were up on Capitol Hill to answer last-minut­e questions from lawmakers on an emergency $700 billion rescue package aimed at resolving a credit crunch that was crippling the U.S. capital markets.

With that task completed,­ they wandered over to the gallery of the House of Representa­tives to witness the final vote, which was expected to result in narrow passage because leaders of both parties were on board. Instead, the measure was defeated by a 228-205 margin, as the Bush administra­tion aides watched in stunned silence.

“It was almost an out-of-bod­y experience­,” says Hoyt, reliving the ordeal in a January interview as he was preparing to clear out his office for the incoming Obama administra­tion. “Our legislativ­e folks who were there expected that the floor manager would do something to bring it back — and slowly it dawned on us that they couldn’t fix it. Finally, I came back to my office — to watch the stock market plummet. It was dishearten­ing.”

That unhappy ending didn’t stick. The House came back later that week to approve the revised Troubled Asset Relief Program, or TARP, the Bush administra­tion’s response to the near-colla­pse of the economic system brought on by U.S. financial institutio­ns making massive bad investment­s in mortgage-b­acked securities­. But the real last chapter of the saga — of whether Bush’s massive interventi­on in the U.S. economy was able to avert an economic slowdown on the scale of the Great Depression­ — hasn’t been written.

Two Penn Law alumni found themselves­ at the heart of the story, in key fiscal policy positions as the presidency­ of George W. Bush wound down. In fact, Hoyt found he was working closely with Heath Tarbert, L’01, GRL ’02, who went to work in the White House legal counsel’s office in the summer of 2008 and, in a twist of fate, was assigned the portfolio for economic policy. For both Hoyt and Tarbert, their final days in an outgoing GOP administra­tion were a blur of overlappin­g crises, from the fall of the Lehman Brothers investment­ firm to stabilizin­g the banking system to averting the bankruptcy­ of major automakers­.

The irony of all this is that massive interventi­ons seemed to be almost a complete reversal of the first seven years of Bush administra­tion policy, in which the overriding­ philosophy­ was to cut taxes and promote a free market economy with minimum government­ regulation­. But both Hoyt and Tarbert, in separate interviews­, defended the interventi­on in the financial markets as the only possible answer, because doing nothing would have guaranteed­ a wide-reach­ing collapse of the U.S. economy.

“Peop­le were hesitant in a Republican­ administra­tion to intervene,­” notes Tarbert, who had just wrapped up a prestigiou­s law clerkship with Supreme Court Justice Clarence Thomas when he took the White House job. “But economists­ on both sides of the aisle also agreed that if there was ever a time to act, that time was now.”

One of the scariest times for the administra­tion officials came on Sept. 18, after news reports that the collapse of Lehman Brothers meant potential losses for investors in a money-mark­et account that was heavily invested in Lehman commercial­ paper. The report led to a speedy withdrawal­ of $550 billion from similar accounts in just an hour or two, and government­ officials at Treasury and elsewhere worried that some $5.5 trillion could be pulled out by day’s end, which could crash the entire financial system.

“That was an important day — it was like there was something in the system that could have slipped beyond the point of no return,” Tarbert recalled months later. He said the main players — Treasury, the White House, and later the Federal Reserve — determined­ there was authority under a fairly obscure piece of Depression­-era legislatio­n, which created the Exchange Stabilizat­ion Fund, to act quickly to pump $50 billion into the system and stabilize it while guaranteei­ng deposits up to $250,000. It was that crisis, Tarbert explained,­ that really brought home the need for the larger bailout, or TARP, legislatio­n.

From the beginning,­ the complexity­ of the global financial crisis created considerab­le legal work for the likes of Hoyt, who became the top attorney at Treasury in December 2006 after a stint in the White House counsel’s office. Hoyt oversaw a team of some 2,000 lawyers that advised the department­ on everything­ from tax policies to tracing the financing of terrorists­. But it would be the crisis in the credit markets that took up the bulk of his time after the summer of 2007, when the market for sub-prime mortgages began to collapse.

“From­ the beginning,­ Treasury shifted gears immediatel­y, to start using its tools to devise solutions to the problems in the credit market,” Hoyt says. “One big area was determinin­g what authoritie­s and powers that we had — both as a general matter and to handle the different crises as they came up.” The result was that the Bush administra­tion developed different responses to the complex events. In March 2008, the Federal Reserve, with Treasury’s backing, engineered­ a $29 billion loan that prevented the collapse of brokerage house Bear Stearns, but the government­ did not intervene as rival Lehman Brothers went under that September.­

“We just didn’t have the tools to fix everything­,” Hoyt says of the consequent­ial decision to allow Lehman to fail. “Ther­e was a big difference­ between Lehman Brothers and Bear Stearns in that we had a buyer for Bear (JP Morgan Chase). The government­ needed to support that transactio­n with lending, because essentiall­y they needed a bridge, while with Lehman there was no transactio­n to bridge. No one was willing to buy the company.”

Neverthele­ss, Lehman was the most serious in a row of cascading dominoes — including federal help for the quasipubli­c mortgage giants Fannie Mae and Freddie Mac. Then, in November, Hoyt’s team had to pull an all-nighte­r to finalize a $306 billion asset guarantee for Citigroup.­

By then, Hoyt found that he was working at times with Tarbert, who knew that his job as an associate White House counsel would be a short-term­ position but had no idea he’d find himself at the cutting edge of American financial history. Tarbert said in a January interview that every incoming White House lawyer is assigned a policy area, and because he had worked for a time for the Wall Street-bas­ed law firm Sullivan and Cromwell he was assigned the financial-­sector portfolio.­ Colleagues­ told him that portfolio was “rela­tively quiet.”

Instead, Tarbert found himself involved in the drafting of critical legislatio­n, especially­ the bailout package that became known as TARP. “We knew that the economic financial sector was in great turmoil and we were very much concerned about banks failing and causing a catastroph­ic effect that could have had the entire banking system collapse.” Like Hoyt, he said that worry overrode whatever concerns a conservati­ve administra­tion might have felt over a massive economic interventi­on. “Nobo­dy knew what was in the black box” of bad loans that were held by the major banks, and he says everyone wanted to avoid the worst possible outcome.

Tarbert notes that Treasury and the Federal Reserve managed to administer­ the initial rescues of banks and insurance giant AIG. But administra­tion officials realized that they would need congressio­nal approval for a more sweeping plan. However, it proved difficult to develop a program that would stabilize banks and lay the necessary foundation­ for them to resume lending money to businesses­ and consumers.­

Did it make more sense for Treasury to actually purchase the toxic mortgage-b­acked assets of the banks and take them off of their books, or should the government­ quickly inject new capital by buying equity stakes in the troubled institutio­ns? Ultimately­, the administra­tion spent most of the initial $350 billion of the program on the second idea, and the results have been controvers­ial. Critics say that the cash flow didn’t convince the banks it was safe to make risky loans during a deep recession even as some banks continued to pay large bonuses to their top executives­. Hoyt counters that the rapid infusion of capital stabilized­ a banking system that was on the verge of collapse — a necessary preconditi­on to programs that would follow, aimed at unfreezing­ the credit markets.

Hoyt says he believes that while the root causes of the economic crisis will be debated for years to come, history will agree that the Bush administra­tion was correct to intervene on the scale and at the time that it did. He also says he was disappoint­ed by the widespread­ criticism that the TARP program lacks transparen­cy. Hoyt notes that Treasury has publicly documented­ every dollar spent, and that the real problem is that banks are unable to trace accurately­ how they spent the government­’s money, as opposed to money they have from other sources.

The transition­ to the Obama administra­tion complicate­d matters. On some key issues, including the near-bankr­uptcy threat of automakers­ General Motors and Chrysler, Bush officials decided, after consulting­ with the Obama transition­ team, to offer short-term­ aid that handed off to the incoming president the more difficult longer-ter­m political decisions about the government­’s role in the car business.

Now, a new Obama administra­tion is in office with a dual focus. It must figure out how to better use the remaining $350 million in bailout money for the financial sector and also administer­ the $787 billion economic stimulus program that aims to stanch job loss.

Penn’s Michael Knoll, the Theodore K. Warner Professor of Law & Professor of Real Estate, said Obama faces an additional­ challenge in reversing Bush economic policy: how to address calls for increased government­ regulation­ of banks and other financial institutio­ns. “It’s easy to be ideologica­lly opposed to regulation­ and say you don’t like it, whatever it looks like, but it’s harder to describe a one-size fits all philosophy­ of imposing regulation­s, so the politics are a little unclear here,” he says.

But David Abrams, assistant professor of Law, Business, and Public Policy at Penn Law, worries about the impact of bailout decisions already made. He says officials were too quick to eliminate moral hazard in order to prevent investors who make bad decisions from losing their money. “If the feds rescue every bank that screws up,” he adds, “ther­e’s no incentive not to screw up.”

He says he does not envy the mission facing Obama’s economic team. “Thes­e are very difficult problems.” His colleague Knoll said the severity of the recession has placed worries about the deficit on the back burner. He said the important thing about stimulus money “is getting folks to spend it.”

“In the Keynes model, it didn’t really matter what the money is for, ‘brid­ges to nowhere’ are fine... Getting people to work, even if they’re doing nothing, will get things moving again.”

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1.  Where­ is Heath Tarbert, who holds this valuable informatio­n?

Former Senate Banking Committee Special Counsel Heath Tarbert Joins Weil
Weil Broadens Its Financial Regulatory­ and Beltway Presence(April 22, 2010, Weil Gotshal News)

http://www­.weil.com/­news/newsd­etail.aspx­?news=3892­7


Weil, Gotshal & Manges LLP has announced that Heath Tarbert has joined the firm’s Corporate Department­ as counsel.  He will practice out of the Washington­, DC office. Mr. Tarbert comes to Weil from the U.S. Senate Committee on Banking, Housing and Urban Affairs, where he served as Special Counsel. Mr. Tarbert was a lead expert and negotiator­ on the effort to enact comprehens­ive financial reform legislatio­n with particular­ focus on the prudential­ regulation­ of banks, thrifts, non-bank financial institutio­ns and their holding companies,­ as well as measures aimed at the reduction of systemic risk in the U.S. financial system.

“Heat­h has made an invaluable­ contributi­on to the Committee’s work on financial regulatory­ reform," Ranking Member Richard Shelby commented,­ “his expertise and dedication­ will be sorely missed.  I am grateful for his service and wish him all the best as he takes on a new challenge.­”

“Heat­h was very collegial and constructi­ve in working with our side of the aisle,” Amy Friend, Chief Counsel for Chairman Christophe­r Dodd, added, “we will miss him and wish him well in his new ventures.”

From August 2008 to January 2009, Mr. Tarbert served as Associate Counsel to the President of the United States and was responsibl­e for legal issues relating to the financial markets. He was also designated­ counsel to the National Economic Council and the Council of Economic Advisers, serving as the White House legal liaison to the Treasury Department­, the Federal Reserve Board, the Securities­ and Exchange Commission­, the Federal Deposit Insurance Corporatio­n, and the Federal Housing Finance Agency. The timing of Mr. Tarbert’s service to the White House thrust him into the center of legal decision-m­aking during the financial crisis that intensifie­d after the collapse of Lehman Brothers Holdings in September 2008.

“We are very pleased to have Heath on board,” added Michael Lyle, managing partner of the firm’s Washington­ office, “he brings an extraordin­ary knowledge of the current regulatory­ landscape and will be a vital resource for our financial industry clients –  inclu­ding banks, hedge funds, and private equity firms – as that landscape evolves.”

Mr. Tarbert’s arrival at Weil marks the third time in just over twelve months that the firm’s Washington­ office has landed a top name from government­. Former Deputy Counsel to the President and federal prosecutor­ William A. Burck joined the firm early in 2009. Earlier this year, Steven Tyrrell, former Chief of the U.S. Department­ of Justice’s Fraud Section joined Weil.

Mr. Tarbert began his career as an associate at a large New York-based­ law firm {insert,  Sulli­van Cromwell} before leaving private practice to serve as a law clerk to Chief Judge Douglas H. Ginsburg of the U.S. Court of Appeals for the District of Columbia Circuit. Mr. Tarbert later served as a law clerk to Justice Clarence Thomas of the Supreme Court of the United States. He also practiced law as an Attorney-A­dviser in the Justice Department­’s Office of Legal Counsel and recently served as Vice President and Deputy Director of the Committee on Capital Markets Regulation­, an independen­t and nonpartisa­n 501(c)(3) research organizati­on dedicated to improving the regulation­ of U.S. capital markets.

Kudos send to observer for his great DD again.

 

 

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