President Obama

OPEN WEB SITE FOR
PRESIDENT OBAMA

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SU
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HIS ADMINISTRATION

NC IS

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MEMBERS OF CONGRESS
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AND
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THE AMERICAN

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TOXIC ASSETS

•THE US TAXPAYER AND THE FINANCIAL CRISIS
•THE US TAXPAYER AND GOVERNMENT
•ONE OF VERY FEW SOLUTIONS TO THE CURRENT CONFIDENCE
CRISIS

•IS ETHICAL PROFITABLE CONSUMER BANKING A MYTH?

1
cdecarbonnel@alum.mit.edu

EMAIL LIST
 PRESIDENT OBAMA FEBRUARY 5, 2009
 US ADMINISTRATION FEBRUARY 7, 2009
 MEMBER OF CONGRESS FEBRUARY 9, 2009
 US TAXPAYERS MID FEBRUARY

CAVEAT

 THE AUTHOR(S) OF THIS SITE AND OF THE INFORMATION CONTAINED ARE INDIVIDUAL
US TAXPAYERS.
 ALL THE INFORMATION AND DATA COMES FROM PUBLICLY AVAILABLE SOURCES,
MAINLY IF NOT ALWAYS, FROM THE INTERNET
 THE AUTHOR MAY HAVE MADE NUMERICAL ERRORS IN THIS DOCUMENT, BUT
BELIEVES THAT THEY WOULD HAVE LIMITED IMPACT ON THE ANALYSIS AND
CONCLUSION.

2

 “We start 2009 in the midst of a crisis unlike any we
have seen in our lifetime, a crisis that has only
deepened over the last few weeks. Nearly 2 million jobs
have been now lost. And on Friday, we're likely to learn
that we lost more jobs last year than at any time since
World War II. Just in the past year, another 2.8 million
Americans who want and need full–time work have had
to settle for part–time jobs.“

3

NEVER SO FEW HAVE DONE SO MUCH DAMAGE TO THE WORLD
FINANCIAL MARKETS AND THEIR ECONOMY

FEW
NEVER SO

4

MR. PRESIDENT

 WE TAXPAYERS HAVE LOST CONFIDENCE
– WITH OUT IT, IT IS GOING TO BE DIFFICULT TO RESUME NORMAL
ECONOMIC LIFE
 WE ORIGINALLY HAD LOST CONFIDENCE AS A RESULT OF THE
FINANCIAL CRISIS
 THEN,WE HAD LOST CONFIDENCE AS A RESULT OF THE ECONOMIC
CRISIS
 BUT AT THIS STAGE WE HAVE LOST CONFIDENCE BECAUSE THERE
DOES NOT APPEAR TO BE A VIABLE UNDERSTANDABLE SOLUTION

5

MR PRESIDENT
AS YOU WELL KNOW:

 THE US TAXPAYERS
– DECLARES $8.0TRILLION IN AGI
DOMESTIC DEPOSITS

– HAS OVER $40TRILLION IN ASSETS
 $ 7.5TRILLION IN SHORT TERM
$9.0

ASSETS
$8.0
A.G.I. • $15.5TRILLION IN SECURITIES
$7.0
 HAS BECOME MUCH MORE
SOPHISTICATED FINANCIALY OVER
$6.0
THE PAST DECADE.
$5.0
 WHILE WE MAY NOT UNDERSTAND
(WHO DOES) ALL THE REASONS FOR
$4.0 DEPOSITS
THE CURRENT CRISIS, WE ARE STILL
$3.0
ABLE TO GRASP THE FOLLOWING
FACTS:
$2.0
– THAT FINANCIAL INTERMEDIARIES
$1.0 (WALL STREET) HAVE AGAIN ABUSED
THEIR FRANCHISES
$0.0
– THAT IT HAS AN UNBEARABLE
1990 1992 1994 1996 1998 2000 2002 2004 2006 FINANCIAL IMPACT ON OUR DAILY
LIVES AND THE FUTURE OF OUR
DOMESTIC DEPOSITS A.G.I. ECONOMY

6

MR PRESIDENT
THE US TAXPAYERS, SINCE THE EARLY 90’S, HAVE BEEN “GOOD
CITIZENS”. AS A RESULT, WE INCREASED OUR HOUSEHOLD SIZE BY
16 MILLIONS SINCE 1990., REACHING OVER 110 MILLIONS.

 “GOOD CITIZENS”
US HOUSEHOLDS
– WE HAVE LEVERAGED THE NEW
TECHNOLOGIES TO CREATE NEW
120
BUSINESS SECTORS CREATING
MILLIONS OF JOBS
– WE HAVE DEDICATED OURSELVES TO
HARD WORK
110
– WE HAVE PAID SUBSTANCIAL TAXES
– WE HAVE SAVED (JUST THROUGH BANK
DEPOSITS) $3.3TRILLION DOLLARS FROM
1995 TO 2007
100
 AND AS A RESULTS WE WANTED
– TO MOVE UP IN HOMES OR TO BUY OUR
FIRST HOME
90
– TO PURCHASE A NEW CAR
– TO GET NEW WHITE GOODS

80  AND WE EXPECTEDED THE FINANCIAL
INTERMEDIARIES AND THE US
1980 1985 1990 1995 2000 2005 2010
GOVERNEMENT TO DO THEIR JOB
US HOUSHOLDS

7

MR PRESIDENT
DESPITE OUR DEPOSIT OF MORE THAN $7.0TRILLION (60% FDIC
INSURED),THIS HISTORICALY HIGH DEMAND FOR HOME FINANCING OF
MORTGAGES WAS ONLY PARTIALY FINANCED, AS HISTORICALY,
FROM THE BALANCE SHEET OF THE TRADITIONAL BANKING SYSTEM

HOUSEHOLDS COMMERCIAL BANKS DEPOSITS
HOME OWNERSHIP (FDIC)
HOME OWNERSHIP
7,000,000,000
70.00%

6,000,000,000
69.00%

5,000,000,000
68.00%

4,000,000,000
67.00%

3,000,000,000
66.00%

2,000,000,000
65.00%

1,000,000,000
64.00%

63.00%
0
1975 1980 1985 1990 1995 2000 2005 2010
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
HOME OWNERSHIP
1-4 FAMILY RESIDENTIAL NET LOANS AND LEASES

8

BUT A VERY LARGE AMOUNT ($2.0 TO $3.5TRILLION) WERE FINANCED
WITH EXOTIC FINANCIAL INSTRUMENT THAT ORIGINATED MUCH
MORE FEE INCOME FOR THE COMMERCIAL BANKS

U.S. Mortgage Market
OUTSTANDING MORTGAGES  THE BANKS GROUPED
(Dolla inM
rs illions)
SECURITIZED A LARGE PART OF
Total N on- Total Residential Total M Sas
B
THEM (ABS, RMBS,..)
Year GA
NM FHLM C FN A
M Agency A gency MS
B Mortgages %of R M esi tg
1980 93,874 16,962 110,836 110,836 962,2 59 11.5
 THE MAIN PURPOSE FOR A BANK
1981 105,790 19,897 717 126,404 126,404 1,034,8 57 12.2
1982 118,940 42,952 14,450 176,342 176,342 1,074,9 95 16.4
TO GO THROUGH THESE
1983 159,981 57,720 25,121 242,822 242,822 1,191,6 48 20.4
EXPENSIVE STEPS
1984 179,981 70,025 36,215 286,221 11,000 286,221 1,326,0 92 21.6
1985 212,145 99,908 54,987 367,040 24,016 367,040 1,523,5 90 24.1
(SECURITIZATION) IS TO BE ABLE
1986 262,698 169,186 95,778 527,662 16,617 527,662 1,726,4 60 30.6
1987
TO TRANSFER THE UNDER LYING
315,832 205,992 137,330 659,154 27,800 686,954 1,924,2 18 35.7
1988 340,527 219,701 172,259 732,487 34,865 767,352 2,157,7 49 35.6
LOAN TO A NEW PARTY, USUALLY
1989 369,687 266,060 219,577 855,324 43,325 898,649 2,382,9 54 37.7
1990 401,278 308,369 291,194 1,000,841 55,193 1,054,176 2,619,0 09 40.3
A NONE BANK ENTITY, OUT OF
1991 425,241 351,906 362,667 1,139,814 98,183 1,223,814 2,787,1 86 43.9
YOUR OWN BALANCE SHEET SO
1992 419,516 401,525 435,979 1,257,020 146,146 1,389,020 2,955,0 12 47.0
1993 414,066 434,499 486,804 1,335,369 174,571 1,519,069 3,116,5 00 48.7
THAT YOU FREE UP FUNDS TO DO
1994 450,934 460,656 530,343 1,441,933 192,637 1,647,933 3,296,2 49 50.0
NEW LOANS.
1995 472,283 512,238 569,724 1,554,245 206,487 1,778,545 3,467,2 57 51.3
1996 506,340 551,513 633,210 1,691,063 232,206 1,947,263 3,695,1 59 52.7
 BUT THE COMMERCIAL BANKS
1997 536,810 576,846 687,981 1,801,637 276,930 2,112,337 3,935,9 95 53.7
1998 537,431 640,471 804,205 1,982,107 355,470 2,390,251 4,294,7 68 55.7
KEPT (31/2/2007) $1,0TRILLION OF
1999 582,263 740,157 924,941 2,247,361 394,559 2,706,828 4,716,5 58 57.4
2000 611,553 810,894 1,016 ,398 2,438,845 426,265 2,865,110 5,126,3 12 55.9
THESE SECURITIES ON THEIR
2001 591,368 940,933 1,238 ,125 2,770,426 496,101 3,266,527 5,635,7 91 58.0
BALANCE SHEET.
2002 537,888 1,072,990 1,478 ,610 3,089,488 551,806 3,641,294 6,309,6 23 57.7
2003 1,156,188
473,738 1,851 ,728 3,481,654 683,231 4,164,885 7,105,0 53 58.6
2004 1,199,290 1,984,21 7 4,696,746
441,345 3,624,852 1,071,894 8,071,0 89 58.2
20 3 411,870
05-Q 1,284,393 2,226,00 0 5,332,263
3,922,263 1,410,000 8,784,3 00 60.7
Source: Insid M &AB
e BS S
Estim tesinitalics
a

9

MR PRESIDENT
THE BANKS TOOK THE RISK OF RECATEGORIZING RESIDENTIAL
MORTGAGES ON THEIR BALANCE SHEET FROM LOANS TO
SECURITIES FOR INCREASE FEES

 AS A RESULT THESE RESIDENTIAL MORTGAGES CHANGED IN
ACCOUNTING RULES FROM LOAN ACCOUNTING TO SECURITIES
ACCOUNTING (MEANING MARK-TO-MARKET)
 TO COMPOUND THIS, THEY INVESTED ON THEIR BALANCE SHEET
$1.1TRILLION 60% OF THEIR EQUITY BASE IN MORTGAGE BACKED
SECURITIES ($970BILLION).
 NO INVESTMENT FIRM OR INVESTOR WOULD COMMIT 60% OF HIS
NET WORTH TO A SINGLE INDUSTRY
 WHY? THE MAIN REASON I CAN THINK OF IS THAT IT GENERATED
ENORMOUS FEE INCOME (FOR THEM AS FOR WALL STREET). THIS
INCREASED FEE INCOME PROBABLY CONTRIBUTED
SUBSTANCIALLY TO THEIR COMPENSATION PACKAGE.

10

Enhancement Reflects Collateral Differences

Collateral “Six-Pack” Deal Deal with XS / OC

 In Non-Agency MBS, credit
enhancement structures
come mainly in two flavors

Deal Collateral Face Value -
AAAs

Total Principal Payments
“Six-pack” structures where AAAs
several locked-out subs
provide credit enhancement.
Mainly used on Jumbos and AA “M1”
Alt-As

Credit Enhancement
A “M2”

Classic “Six Pack”
Excess-spread / Over- AA “M1”

Excess-Spread O/C-based
collateralization structures, BBB “M3”

Credit Enhancement
where locked-out subs are
BB “B1” A “M2”
complemented by excess
interest from the collateral to B “B2”
cover losses. Mainly used in BBB “M3”
N.R. “B3”
Subprime, High-LTV,
Scratch & Dent, sometimes XS – OC
Payments

IO
Interest

Alt-A
Residual
Interest on Interest on
the bonds the bonds
11

BUT

 LIKE ANY AND MANY ECONOMIC CYCLES, ON THE PART
OF THE US TAXPAYERS THERE WERE SOME
EXCESSES.

 SOME TAXPAYERS OVEREXTENDED THEMSELVES

 SOME TAXPAYERS RAN THEIR CREDITCARD BALANCE

 SOME OVERPAID FOR THEIR HOMES…

• IT SHOULD HAVE RESULTED IN A CORRECTION,
BUT NOT IN A WORLD FINANCIAL CRISIS

12

OPEN WEB SITE FOR
PRESIDENT OBAMA
HIS ADMINISTRATION
MEMBERS OF CONGRESS
AND
THE AMERICAN TAXPAYERS

•THE US TAXPAYER AND THE FINANCIAL CRISIS
•THE US TAXPAYER AND THE GOVERNMENT
•ONE OF VERY FEW SOLUTIONS TO THE CURRENT CRISIS
•FINANCIAL CRISIS
•CONFIDENCE CRISIS



IN 2008, THE US TAXPAYERS CONTRIBUTES $1.1TRILLION OUT
THE FEDERAL GOVERNMENT RECEIPTS OF $2.5TRILLION

14

WHEN CALCULATED AS A PERCENTAGE OF INCOME TAX
RECEIPTS, THE FEDERAL DEBT IS NOT OVERWHELMING.

INCOME TAX RECEIPTS
AS PERCENT OF GDP
25.0%

20.0%

15.0%

10.0%

5.0%

0.0%
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

INCOME TAX AS % GDP

DEBT SHOULD NOT BE CALCULATED NOT AS % OF GDP (REVENUES IN CORPORATE WORLD), BUT AS % OF INCOME TAXES
(EQUIVALENT TO NET INCOME IN THE CORPORATE WORLD)
15

MR. PRESIDENT

 THE US TAXPAYER IS PROVIDING THE CASH FLOW FOR THE
FEDERAL GOVERNMENT TO BE ABLE TO BORROW $10,000BILLION
IN FEDERAL DEBT
– $76,000 PER TAXPAYER
 THE US TAXPAYER IS THE ULTIMATE PAYER FOR THE $452BILLION
IN YEARLY INTEREST COST
– $3,476 PER TAXPAYER

16

THE S&L CRISIS COST BETWEEN $50-100BILLION FOR THE
TAXPAYERS, THE CURRENT CRISIS MAY COST $400-800BILLION IF THE
GOVERNMENT RELIES ON THE SAME OR SIMILAR ACTIONS

 The thrift cleanup was Congress's response to the greatest collapse of U.S. financial institutions
since the 1930s.
– From 1986 to 1989, the Federal Savings and Loan Insurance Corporation (FSLIC), the
insurer of the thrift industry, closed or otherwise resolved 296 institutions with total assets of
$125 billion (table 1).3
– An even more traumatic period followed, with the creation of the Resolution Trust
Corporation (RTC) in 1989 and that agency's resolution by mid-1995 of an additional 747
thrifts with total assets of $394 billion.
– The combined closings by both agencies of 1,043 institutions holding $519 billion in assets
contributed to a massive restructuring of the number of firms in the industry. From January 1,
1986, through year-end 1995, the number of federally insured thrift institutions in the United
States declined from 3,234 to 1,645, or by approximately 50 percent

AND, LET US MAKE NO MISTAKE, THE SAME MINORITY
WILL BE THE ONE WHO WILL REAP MOST IF NOT ALL THE
$400-800BILLION, LIKE LAST TIME

17
-http://www.allbusiness.com/business-finance/business-insurance/977722-1.html


MR PRESIDENT
PLEASE DO NOT LET YOUR ADMINISTRATION ELIMINATE
MARK-TO-MARKET ACCOUNTING

 AS THIS CRISIS SHOWS, IT PROTECTS US TAXPAYERS AND MAIN
STREET
 IT WOULD NOT HAVE CHANGED ANY OF THE FINANCIAL DEALS
(MORTGAGE SECURITISATION) DONE BY WALL STREET IN THE PAST
FEW YEARS
 IT WOULD NOT HAVE IMPACTED THE EXCESSES IN COMPENSATION
AS THE LAST $18.3BILLION SHOWS

18

THE TRADITIONAL MORTGAGE LOAN PROCESS

COMMERCIALBANK
All real estate loans 3,863,973,479
8 Real estate loans in domestic offices: 3,794,965,620
9 Construction and land development 554,447,534
10 Commercial real estate 935,093,951
11 Multifamily residential real estate 149,177,231
12 1-4 family residential 2,094,503,559
13 Farmland 61,743,345

COMMERCIAL
BANKS

19

WALL STREET BONUS FOG.
EACH LEVEL OF COMPLEXITY GENERATED (AND STILL GENERATE)
SUBSTANCIAL FEES AROUND 2-3% OF SECURITY VALUE. FOR THE
BENEFIT THE MORTGAGE HOLDER?

COMMERCIAL
BANKS
LEVEL 3:
CDOXCDO

Asset manager
LEVEL 1:
LEVEL 2: Bond insurer
RMBS LEVEL 3:
Silver Marlin Sailfish CDO Co-issuer
CDOXCDO
KLEROS Preferred Rating agencies
South Coast Funding IX Swap provider
Maxim High Grade Trustee, collateral
LEVEL 3:
custodian and
CDOXCDO

servicers
$275M
$300M $190M and paying agent
LEVEL 3:
$250M CDOXCDO Underwriter and
placement agent

20

THE RESULT IS THAT THERE IS A MARK-TO-MARKET ACCOUNTING
LOSS OF $1.8TRILLION DOLLAR AGAINST THE EQUITY OF THE
COMMERCIAL BANK

SECURITIZED MORTGAGE OUTSTANDING

3,500
MORE THAN $3TRILLION ISSUED
3,000
LOAN ACCOUNTING: LOSS IN
2,500
VALUE BETWEEN
$ B IL L IO N

10-15%?
2,000

1,500 MARK-TOMARKET ACCOUNTING:
LOSS IN VALUE BETWEEN
1,000
40-50%
500

0
2004 2005 2006 2007 2008 2009 2010
YEARS
SECURITIZED MTG OUTSTANDING MARK-TO-MARKET VALUE OF UNDERLYING MTGS

21

MANY ACTIONS ARE PROPOSED AND SOME ARE IMPLEMENTED.
BUT THEY DO NOT ADDRESS THE CORE AND THE
OVERWHELMING SIZE OF THE PROBLEM

22

OPEN WEB SITE FOR
PRESIDENT OBAMA
HIS ADMINISTRATION
MEMBERS OF CONGRESS
AND
THE AMERICAN TAXPAYERS

•THE US ECONOMY
•THE US TAXPAYER
•ONE OF VERY FEW SOLUTIONS TO THE CURRENT
CONFIDENCE CRISIS



MR PRESIDENT
WHY NOT TURN A LOSING SITUATION WHERE THE US TAXPAYER
EXPECT THAT HE WILL END UP PAYING FOR THE EXCESSES TO A
SITUATION WHERE HE WILL PARTICIPATE IN THE SOLUTION BOTH AT
THE IMPLEMENTATION OF THE POLICY AND AT THE FINANCIAL
IMPACT OF THE RECOVERY
 HISTORICAL LOSS IN US TAXPAYER CONFIDENCE
 SUBSTANCIAL INDIVIDUAL FINANCIAL HARDSHIP
– LOSSES IN HOME EQUITY VALUE (15%-30%)
– LOSSES IN STOCK MARKET VALUE FROM 14,000 TO 8,500
– LOSSES IN EMPLOYEMENT INCOME
– LOSSES IN NON EMPLOYEMENT INCOME (INTEREST INCOME GOING TO BELOW
1%)
 RESTORING CONFIDENCE WILL HAVE TO BE DONE THROUGH MORE THAN
TRADITIONAL STIMULUS PACKAGE AND WITH DETAILED TRANSPARENCY
AND EXPLANATION, AND HOPEFULLY PARTICIPATION
– EXPLAIN WHAT HAPPENED
– EXPLAIN WHY IT WILL NOT REOCCUR
– TELL THEM THEY WILL PARTICIPATE IN OTHER WAYS THAN SEE THEIR TAX
MONEY DISAPPEAR

24

MR. PRESIDENT:
YOUR ADMINISTRATION IS SUGGESTING A BAD BANK?

 5,000,000 TO 7,000,000 MORTGAGE CUSTOMERS ($1,500t/$300,000)
THAT ARE NOT GOING TO BE HAPPY TO BE CONSIDERED PART OF A
“BAD BANK”.
– BEING OWNED OR PART OF A “BAD” SECURITY, DOES IN NO WAY MEAN
YOU ARE PART OF “BAD SUBPRIME LOANS”.
 IN THE MEAN TIME THEIR MORTGAGE MONTHLY PAYMENT STILL
PAY FOR THE SERVISERS, THE TRUSTEES, THE LAWYERS, THE
ACCOUNTANTS…..
 WALL STREET MUST BE SALIVATING. $1,500BILLION IN IDENTIFIED
ASSETS THAT WILL HAVE TO BE RECYCLED THROUGH THEM. A
MAJOR IMPACT ON THEIR COMPENSATION AND BONUS.

25

MR PRESIDENT
EMPOWER THE TAXPAYERS TO PARTICIPATE IN THE SOLUTION
TO A PROBLEM THEY DID NOT CREATE

 YOU WOULD ADDRESS A NUMBER OF ISSUES
– ADDRESS THE CONFIDENCE GAP
– ADRESS THE TOXIC ASSETS
– PUT TO REST THE ACCOUNTING DEBATE ABOUT MARK-TO-MARKET
ACCOUNTING
– PROVIDE A MULTI YEAR STIMULUS PACKAGE IN ADDITION TO THE
CURRENT ADMINISTRATION STIMULUS PACKAGE
– PROVIDE TOTAL TRANSPARENCY IN THE FINANCIAL CRISIS
 THEY WOULD FINANCIALY PARTICIPATE IN THE “RESCUE” OF
THEIR ECONOMY AND OF THEIR “FINANCIAL INSTITUTIONS”
 THEY WOULD DEPOSIT $500BILLION TO $1,000BILLION IN THE
“BAD BANK” DIRECTLY, TO INVEST IN “TOXIC ASSETS”
– EARNING 6 TO 8% INTEREST
– GETTING THE RECOVERY IN PRICES
– BENEFITING FROM THE RECOVERY THAT THEY WILL CREATE
 IT ,OBVIOUSLY, WOULD BE ON A VOLUNTARY BASIS
26

MR. PRESIDENT:
YOUR ADMINISTRATION COULD HAVE A FAIR WAY TO RESOLVE THE
CURRENT FINANCIAL CRISIS WITH THE SUPPORT OF THE TAXPAYERS

 THE GOVERNMENT COULD SPONSOR ONE OR MORE SINGLE
PURPOSE TAXPAYERS FINANCED AND OWNED BANK (CREDIT
UNION)
 THE GOVERNEMENT COULD FOR THESE SINGLE PURPOSE BANKS:
– ALLOW TO TRANSITION FROM MART-TO-MARKET ACCOUNTING TO LOAN
ACCOUNTING
 WITH VERY STRINGENT CONDITIONS
– OWNERSHIP OF BANK HAS TO BE WITH U.S. TAXPAYERS WITH A
MAXIMUM LEVEL ($50,000)
 A CONDITION FOR THE ACCEPTANCE OF THE TRANSFER OF THE
“TOXIC ASSETS” WOULD BE
– ALL LEGACY STRUCTURE OF WALL STREET (TRUSTEE, LAWYERS, ..)
WILL BE NULLED AND VOID
 ALL FINANCIAL BENEFIT (INTEREST, LOAN VALUE RECOVERY..) WILL
BE PASSED THROUGH IN TOTALITY TO THE US
TAXPAYERS/OWNERS

27

THE MULTILAYERED SECURITISATION WILL BE CANCELLED AND
MORTGAGES WOULD BE RECATEGORIZED AS LOAN AND ACCOUNTED
FOR ON THE BASIS OF LOAN ACCOUNTING

COMMERCIAL
BANKS
LEVEL 3:
CDOXCDO

Asset manager
LEVEL 1:
LEVEL 2: Bond insurer
RMBS LEVEL 3:
Silver Marlin Sailfish CDO Co-issuer
CDOXCDO
KLEROS Preferred Rating agencies
South Coast Funding IX Swap provider
Maxim High Grade Trustee, collateral
LEVEL 3:
custodian and
CDOXCDO

servicers
$275M
$300M $190M and paying agent
LEVEL 3:
$250M CDOXCDO Underwriter and
placement agent

28

BANKS/INSTITUTIONS THAT NEED GOVERNMENT/TAXPAYER
BAIL OUT WOULD BRING THE “UNDERLYING ASSETS” BUT
WITHOUT THE TOXIC ENVELOPE

COMMERCIAL BANKS
“TOXIC MORTGAGE BANK”
 ASSETS
$500B TO $1,000B IN “TOXIC
Silver Marlin Sailfish
ASSETS”
Kleros Preferred
• TOTAL PASS THROUGH
OF INTEREST
• TOTAL PASS THROUGH
South Coast Funding IX
OF PRINCIPAL
Maxim High Grade REPAYMENT
 LIABILITIES
– US TAXPAYERS DEPOSIT
• FDIC INSURED
• TAX FREE INTEREST(?)

29

MR. PRESIDENT:
IN YOUR CAMPAIGN YOU MENTIONED JOB CREATION.

 $1,500BILLION ASSETS WILL NEED TO BE WORKED OUT. IT WILL END
UP COSTING 1 OR 2% OF ASSETS A YEAR $15 TO $30BILLION PER
YEAR.
 WORKING WITH MAIN STREET WILL CREATE 300,000 JOBS
($30B/$100,000)

30

MR PRESIDENT:
IF THIS ACTION (FOR US ASSETS BASED SECURITIES) WERE
EXTENDED TO THE ASSETS HELD OVERSEAS IT WOULD
GREATLY IMPROVE US STATUS OVERSEAS

 UBS AG investment bank $18.700
 Crédit Agricole bank $ 4.800
•THIS ACTION COULD ALSO BE
 HSBC bank $ 3.400
EXTENDED TO SECURITIES
 Deutsche Bank investment bank $ 3.100
CURRENTLY OVERSEAS.
 Credit Suisse bank $ 3.080
•IN THIS WAY IT COULD ALSO
 BayernLB bank $ 2.800
CONTRIBUTE TO STABILIZING THE
 Barclays Capital investment bank $ 2.700
 RBS bank $ 2.600 INTERNATIONAL BANKING
 Natixis bank $ 1.750 SYSTEMS.
 Commerzbank bank $ 1.100
 Swiss Re re-insurance $ 1.070
 BNP Paribas bank $ 0.870

31

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