Political Public Opinion: The Wall St. Bailout – What’s In Their Wallets?

Wall Street bonuses climbed 17 percent in 2009 to $20.3 billion as many of the investment banks that were bailed out at taxpayer expense reported blowout profits.

The announcement Tuesday by New York Comptroller Thomas DiNapoli was likely to outrage many Americans who are barely getting by. And it happened on the same day that private economists reported a plunge in consumer confidence – a blow to hopes that spending by shoppers would help speed up an economic recovery.

“Wall Street is vital to New York’s economy, and the dollars generated by the industry help the state’s bottom line,” DiNapoli said. “But for most Americans, these huge bonuses are a bitter pill and hard to comprehend. … Taxpayers bailed them out, and now they’re back making money while many New York families are still struggling to make ends meet. The reason for the surge in bonuses was simple: Wall Street firms had a great year.

Broker-dealer operations associated with the New York Stock Exchange earned a record $49.9 billion through the year’s first three quarters. The firms probably closed out the year $55 billion in the black, DiNapoli’s office said. The average bonus in 2009 was $124,850, according to the comptroller’s projections.

In 2008, Wall Street firms gave out $17.4 billion in bonuses, even though the year was one of their worst. Critics of Wall Street pay said the fact that bonuses are rising even as consumers grow more despondent reflects a growing class divide in the wake of the recession. http://www.12newsnow.com/global/story.asp?s=12031637

The logical assumption here is that the Wall Street profits were made on the backs of the American taxpayer. In one of the greatest schemes yet concocted by fraudulent bankers,  with the help of the Fed, was the using of  borrowed stimulus money to purchase Treasury bonds, collecting variable interest on those bonds depending on their value.

To illustrate:  let’s say the interest rate on money that they borrowed from the Fed is  about  .025%, (I believe this is the current rate as announced by Fed chairman Bernake this week.) Conversely let us also say, the variable return, based on the constantly changing value of those bonds, is approximately 2% or better. Extrapolating that illustrated return on investment  means that the banks are getting approximately seven  times the return on money that they are getting for virtually nothing; our money, and we get nothing.

Additionally these same banks invested in oil futures which drove up the price of oil, thus the value of oil stocks which we could say with almost certainty, that banks carry in their portfolios; that’s just the tip of the iceberg. The bottom line: the American taxpayer, is getting screwed every which way we turn, by a corrupt government and their cohorts in the financial sector. They are getting rich on our hard earned money. Simply put, your money is in their wallets.  Just my opinion.