Dodd Admits He Put AIG Loophole into Stimulus Bill

I swear this guy does not know if he is coming or going sometimes.

Dodd just admitted on CNN that he inserted a loophole in the stimulus legislation that allowed million-dollar bonuses to insurance giant AIG to go forward – after previously denying any involvement in writing the controversial provision.

That is why you read a bill before you vote on it to make sure what you put into the thing is what you intended.

Dodd Looking Vulnerable in Connecticut

I hope Connecticut voters are finally understanding how bad this guy is in the Senate.

The silver-haired father of two young girls is facing his toughest re-election fight ever, and he doesn't even have an opponent yet. (CNBC pundit Larry Kudlow and former GOP Representative Rob Simmons have both expressed interest in running.) In a January Quinnipiac poll, 51% of Connecticut voters said they would not vote for Dodd in 2010.

What is even more dangerous about this guy is this little tidbit:

Still, the double distraction of a looming re-election battle and the ongoing health-care talks has some worried that Dodd might be neglecting the Senate Banking Committee at a crucial time, or at least be stretched too thin. "Health care is yet another distraction on the list of things that have distracted Dodd from his [Banking] Committee work," says one Republican Senator who has served with Dodd on the committee. "

Yes he will be working on health care reform at a time when US banks are in crisis. Talk about not putting your priorities in order. Fix the banks Dodd then you can work on Medicare or whatever pet projects you might have.

If the banks aren't fixed people will be worried more about the Great Depression 2 and then they are about who pays what when they go to the doctor. Maybe Dodd thinks that he has to fix Healthcare in order to stop all the stomach ulcers that he is giving people about his incompetence as the banking chairman.

Ponzi Schemer Madoff Gave Thousands to Dodd and the Dems

Here we go again with the crooks giving thousands of dollars to Democrats.

I checked opensecrets.org and found old Bernie gave $182,250 to politicians and political causes over the year. That included $173,500 to Democrats and their causes.

His wife, Ruth, made $42,800 in donations — $32,250 to Democrats.

Among his Democratic Party friends are House Ways and Means Chairman and Tax Cheat Charles Rangel, Senator and Mortgage Manipulator Christopher Dodd and Sen. Chuck Schumer.

Larry Kudlow Will Smash Dodd in a Senate Race

At last we see a true challenger come to the fore against the hapless and inept Chris Dodd.

In 2010, the Republicans will have to run on fiscal responsibility and economic management, especially if the market continues to slide and the economy keeps stalling as badly as it is now. Dodd helped run the housing market into the ground, but thus far has managed to avoid much of the responsibility by shifting it to what he calls deregulation. Kudlow seems uniquely positioned to expose Dodd’s arguments as fraudulent and to explain in clear terms what Dodd did to wreck the nation’s economy. And that’s before Kudlow rips Dodd over the Friends of Angelo loans he received from Countrywide while he was supposed to be overseeing the industry.

I think all Kudlow will have to do is show how incompetent and unqualified this man is to run the Banking Committee and he will win by a landslide. Any Banking Chairman that talks about nationalizing banks and causes financial stocks to swoon is a guy that should be looking for another job. The banks are terminally ill and Dodd is dangerously unqualified to do anything except for shaking his finger at bank CEOs.

I think the sweetheart loans from a bankrupt lender that people despise like Countrywide (people hate them so much that Bank of America is going to ditch their name and logo) will only be icing on the cake. I mean Dodd still hasn't come clean about these loans and the longer he waits the guiltier he will get. Also there is the matter of his Irish Countryhome and the various sleazy dealings surrounding it as well.

The Stimulus Might Actually Kill Banks Due to a Dodd Amendment?

Here we go again with more incompetence from the Head of the Senate Banking Committee. I think this may make that sweetheart Countrywide mortgage scandal look like small potatoes.

As part of Senator Dodd’s last-minute amendment about executive compensation, he put in a provision making it easier for the banks to pay back the TARP money to the government.
This is directly from the bill signed into law:

“…the Secretary shall permit a TARP recipient to repay any assistance previously provided under the TARP without regard to whether the financial institution has replaced such funds from any other source…”

Under the old TARP rules, a bank could only give the money back after it had replaced it with other capital, presumably raised from private investors. With the above words, that requirement is gone.

The problem is that Dodd's little claw-back add-on may have changed the nature of the TARP funds. These funds lost their "permanent" status which means that ratings agencies can't use that money to determine capital ratios. The capital ratios are important because the bank needs to maintain them at a certain level or they become insolvent.

Or in a best-case scenario the bank has a endure a credit downgrade which will make their borrowing costs go through the roof. However, if their debt rating is cut by too many levels then they might not be able to borrow at a low enough interest rate in order to stay in business. They might even have covenants on their debt like AIG had that if there rating drops to a certain level you have to close up shop.

So it seems that due to Dodds apparent screwup he may have single-handedly invalidated the TARP moneys ability to keep some banks solvent. And this guy heads the *banking* committee? And this mess-up was added to a last minute "claw-back the bonuses" amendment? I think he may have just clawed-back the ability for the US financial system to stay solvent and thus keep us out of Great Depression 2.

Then you notice that Citi suddenly had to rush back to the government so that they could raise equity to keep their capital ratios at the same level as they were before. I know that they took $45 billion in TARP money and I see that this preferred stock to common stock trade-in scheme is supposed to raise that exact same amount.

If the government converted $45 billion of preferred shares into common stock, Citigroup's ratio would rise to about 3.9 percent from 1.5 percent. There is no consensus on what ratios banks need, but many analysts prefer 5 percent or more.

The thing is that they had that $45 billion in TARP money already on their books but Dodd made it so that it doesn't count toward their credit rating. I think Citi may have rushed into this deal only days after the "stimulus" bill passed so that they don't get the dreaded downgrade of doom from Moodys or S&P.

This is a case-in-point of why Congress needs to read 1000 page bills before they are voted on. You never know when the Head of the Banking Committee might invalidate billions of dollars worth of bail-out money with a single stroke of a pen.