'It was a take it or take it offer' FASCISM!

'It was a take it or take it offer' FASCISM! FASCISM!

How Paulson nationalized biggest banks in the U.S.
'It was a take it or take it offer'

Posted: October 15, 2008
5:25 pm Eastern

© 2008 WorldNetDaily

U.S. Treasury Secretary Henry Paulson Jr., armed with a $700 billion authorization from Congress, ordered the chief executives of the nation's nine largest banks to agree to a government purchase of shares in a nationalization even he opposed just days earlier.

"It was a take it or take it offer," one anonymous insider who had been briefed on the meeting told reporters for the International Herald Tribune, which today published an expose of the meeting. "Everyone knew there was only one answer."

In addition to the government demand Monday for the share purchases, federal officials also promised to guarantee, at least for now, $1.5 trillion in new senior debt to be issued by the banks and insure non-interest-bearing accounts that are used mainly for business transactions – another $500 billion, the report said.

That brings the potential taxpayer tab for the "bailout" to $2.25 trillion, triple what Congress envisioned in approving the $700 billion to purchase distressed assets from banking institutions in an attempt to restore confidence in lending and borrowing.

According to the Herald Tribune report, the nine CEOs were summoned to a Treasury Department conference room and handed a one-page document agreeing they would sell shares to the government. Then Paulson said they must sign it.

Some were receptive. However, the report said others, including Wells Fargo chairman Richard Kovacevich, protested, arguing his bank didn't need a bailout.

It didn't matter, according to insiders who talked with the newspaper. Within hours, all executives had provided their signatures.

In a statement one day later, Paulson expressed "regret" at the actions. He said government investments in private banks were "objectionable" but necessary.

The testimony assembled by reporters Mark Landler and Eric Dash said the sudden sea change, from plans to purchase troubled assets to actual government purchase of bank stock, came about because Britain and other nations had announced plans to do exactly the same.

The reporters' account was based on interviews with bank officials and government bureaucrats who either were present or were briefed on the meeting.

The report said none of the executives expected a mandatory program. Paulson's own account of his presentation was succinct.

"I don't think there was any banker in that room who was going to look us in the eye and say they had too much capital," Paulson stated. "In a relatively short period of time, people came on board."

But the newspaper said the terms remained reasonable: The Treasury is buying shares that pay a dividend of 5 percent, rising after five years. It will get the right to purchase common shares but it will not vote those shares.

Questions remained, the report said. Lloyd Blankfein of Goldman Sachs, Vikram Pandit of Citigroup and John Thain of Merrill Lynch and Dimon questioned the terms, wondering whether government now would impact other shareholders and whether it would want control over management.

Federal Reserve Chairman Ben Bernanke then spoke up. He said the banks and the economy both would benefit and suggested without this intervention, even healthy banks could deteriorate, the report said.

Then Timothy Geithner, chief of the Federal Reserve Bank of New York, gave the bankers the specifics, including dollar figures. And the CEOs realized that even if they didn't need the infusion, it could work to their benefit, the Herald Tribune said.

Paulson also said the flexibility of the program was a key.

"[If] you don't change to adopt to the facts, you will never be successful," he said in an interview.

Upon completion of the government presentation, the signings took place.

"I don't think we need to be talking about this a whole lot more," a person briefed on the meeting said Lewis announced. "We all know that we are going to sign."

The infusion of cash, however, did anything but stabilize the market, which rocketed more than 900 points on Monday, trembled on Tuesday and plunged more than 700 points today.