Giving Back Bailout (TARF/TARP) Funds

You are starting to hear in the media that some of the banks and companies that have received bailout funds are wanting or beginning to pay them back. I applaud them for taking these steps. I have a couple of questions for the administration though regarding this. If they are paying back the funds this early into the game, did they really need the funds to begin with? Since most of the funds is made up of the money that I (taxpayers) contributed, when do I get it back and in what form?

These are important questions that need to be asked. To answer the first, I think that you need to look at conspiracy theories and the "game" that the rich play with money. I think that those who can pay back the money this quickly, didn't really need the money in the first place, but wanted to keep their leverage capabilities open so that they could generate more returns shorting what they were betting on.

Think about it for a second! When Goldman Sachs or one of the other large firms that received money announced that they needed money, what happened to their stock: it was dumped. We, the people, will never know, but I'd be willing to bet that these firms, with their investment arms made sure that they had large short positions prior to making the announcements. If I was one of these firms, I would short sell or buy put options on my own companies stock before I made the announcement that I needed "government" funds and then sell at the bottom once the media blitz passed by. Then I would use that money generated on the downside to buy back my own stock and get ready for the upside.

Let's use Goldman Sachs for example again. When Warren Buffet "gave" them $5 billion with special conditions, the stock was around $100 per share. That news event cast a shadow that they were in trouble so the stock went down and bottomed around $50 per share. Smart money, "knowing" these events would have shorted the stock at 100 and bought back at 50, because now GS is around $100 again. The round trip in a couple of months netted a ton of money.

If you looked at the books, GS wasn't ever in need of the money in the first place. They had cash, assets, and little debt. They didn't need money, but they made a ton of it. Smart money and the rich use OPM (Other People's Money) on leverage to generate huge returns.

Now you might say that this is "insider trading". Not really if you have other companies do it for you in a round about way using different mechanisms to create these returns. I don't think it's right, but it happens all the time.

On the second question of when we get ours, I think it's gone off the reservation. You know when the money is "paid back", it probably was never really lent in the first place, because it's just numbers on a computer screen. Once again, we, the people, will never see the money. The deficit will still go up, the US debt load will still increase, taxes will go up, consumer pricing and products will still go up, and our dollar will go down.

I won't get a stimulus check from the bailout money being returned, or a large tax refund for $150,000 which is about what each person in the US owes, including children, for the debt of the US.

I hope things get better and I have faith, but not so much in the administration. I have faith in people, Americans and everyone else, that smarter and calmer heads will prevail and that the rhetoric (otherwise know as BS) that we get from the media and the administration talking heads will not cloud the minds of those more in the field and in the know.