Sheila Bair has been the head of the FDIC since 2006 and will continue in her position until 2013. She once had a failed run for congress and has managed to push herself back into the limelight by taking a leadership role in the mortgage crisis. Many people felt that President Obama would choose her as the Secretary of the Treasury, but he felt it more important that she continue her work in fighting the forclosure problem which is root of America's current financial problems. Although Sheila Bair has appeared to be very commited to her fight against forclosure and in helping American's keep their homes, many believe she is doing more harm than help.
Here is one American's opinion -
"Not that many people pay attention to FDIC and many are still under the false impression that Sheila Bair cares about taxpayers. We all understand investments in stocks, bonds, even mutual funds are risky, but NOBODY, I mean, ABSOLUTELY NOBODY has the right to show such contempt to our deposits and savings that we have earned from working hard all our lives.
I believe a government agency can only function effectively and efficiently if its leader is intelligent and fair. When the leader is corrupt, systemic risk with irreversible consequences is involved and poses a threat to the entire nation. For example, given the scope of the crime, it would be shocking to find only "little" inspectors are responsible for the illegal Indymac backdating and the lack of investigation on Madoff's scam.
If you are seeking for evidence of incompetence and lies by Sheila Bair at FDIC, here is a short list:
Would you consider the following actions as premeditated extortion and blackmailing, and should FBI not investigate them?
"The Federal government committed extortion... His bank is worth in excess of $250 billion, has no bad debt, no credit default swaps, no liquidity problems, and no subprime loans... The FDIC — with Treasury backing — threatened to conduct public audits of his bank unless his board created and issued a class of stock for the Feds to buy"
http://foxforum.blogs.foxnews.com/2009/04/02/napolitano_fdic/comment-page-28/#comment-1230268
Here is another case involving FDIC threatening Wachovia and this one is under SWORN AFFIDAVIT:
In October, 2008, WSJ reported this “sworn affidavit filed this weekend in federal court by Wachovia Corp. Chief Executive Robert K. Steel… “Wachovia was under tremendous pressure from Citi and the regulators to conclude a transaction with Citigroup with definitive agreements by the following Monday, October 6, 2008″… The Company’s advisors and I told the board that we believed that unless a definitive merger agreement was signed with either Citigroup or Wells Fargo by the end of the day Friday, October 3, that the FDIC was prepared to place Wachovia’s banking subsidiaries into receivership,” Mr. Steel said in the affidavit.”
http://online.wsj.com/article/SB122325890301006757.html
This chart shows the biggest drop in Dow Jones Industrial Average occurred at the beginning of October, 2008, around the same time FDIC wiped out Wamu bondholders:
http://marketoracle.org/index.php?name=News&file=article&sid=9087
Worse, after it destroyed the bond market, with only $19 billion in reserve to guarantee over $4 trillion in deposits, how does FDIC have any money to back bank bonds? This is a simple math problem that even a fifth grader can figure out.
Does it make sense that FDIC is helping JP Morgan raising more money than it paid for Washington Mutual WAMU ($1.9 billion)?
JP Morgan launches $5.85 bln FDIC-backed notes-IFR
http://uk.reuters.com/article/marketsNewsUS/idUKN0125431020090401
Citigroup Raises $12 Billion in FDIC-Backed Bond Sale
http://www.bloomberg.com/apps/news?pid=20601087&sid=autqFMJezyUU
Goldman's inaugural $5 billion sale is the first test as U.S. banks line up to sell bonds guaranteed by the Federal Deposit Insurance Corp.
http://www.reuters.com/article/fundsFundsNews/idUSN2545275620081125
Tell me why Sheila Bair is still at FDIC when the agency has failed in "examining and supervising financial institutions, and managing receiverships" and treating "all employees, insured financial institutions, and other stakeholders with impartiality and mutual respect." Tell me why FDIC is helping Morgan Stanley selling bonds in Hong Kong instead of focusing all its resources on us taxpayers; towns across the US is suffering as a result of continuous bank seizures and more importantly, the painfully slow followup.
http://www.bransondailynews.com/story.php?storyID=10989
I believe a government agency can only function effectively and efficiently if its leader is intelligent and fair. When the leader is corrupt, systemic risk with irreversible consequences is involved and poses a threat to the entire nation. For example, given the scope of the crime, it would be shocking to find only "little" inspectors are responsible for the illegal Indymac backdating and the lack of investigation on Madoff's scam.
If you are seeking for evidence of incompetence and lies by Sheila Bair at FDIC, here is a short list:
Would you consider the following actions as premeditated extortion and blackmailing, and should FBI not investigate them?
"The Federal government committed extortion... His bank is worth in excess of $250 billion, has no bad debt, no credit default swaps, no liquidity problems, and no subprime loans... The FDIC — with Treasury backing — threatened to conduct public audits of his bank unless his board created and issued a class of stock for the Feds to buy"
http://foxforum.blogs.foxnews.com/2009/04/02/napolitano_fdic/comment-page-28/#comment-1230268
Here is another case involving FDIC threatening Wachovia and this one is under SWORN AFFIDAVIT:
In October, 2008, WSJ reported this “sworn affidavit filed this weekend in federal court by Wachovia Corp. Chief Executive Robert K. Steel… “Wachovia was under tremendous pressure from Citi and the regulators to conclude a transaction with Citigroup with definitive agreements by the following Monday, October 6, 2008″… The Company’s advisors and I told the board that we believed that unless a definitive merger agreement was signed with either Citigroup or Wells Fargo by the end of the day Friday, October 3, that the FDIC was prepared to place Wachovia’s banking subsidiaries into receivership,” Mr. Steel said in the affidavit.”
http://online.wsj.com/article/SB122325890301006757.html
This chart shows the biggest drop in Dow Jones Industrial Average occurred at the beginning of October, 2008, around the same time FDIC wiped out Wamu bondholders:
http://marketoracle.org/index.php?name=News&file=article&sid=9087
Worse, after it destroyed the bond market, with only $19 billion in reserve to guarantee over $4 trillion in deposits, how does FDIC have any money to back bank bonds? This is a simple math problem that even a fifth grader can figure out.
Does it make sense that FDIC is helping JP Morgan raising more money than it paid for Washington Mutual WAMU ($1.9 billion)?
JP Morgan launches $5.85 bln FDIC-backed notes-IFR
http://uk.reuters.com/article/marketsNewsUS/idUKN0125431020090401
Citigroup Raises $12 Billion in FDIC-Backed Bond Sale
http://www.bloomberg.com/apps/news?pid=20601087&sid=autqFMJezyUU
Goldman's inaugural $5 billion sale is the first test as U.S. banks line up to sell bonds guaranteed by the Federal Deposit Insurance Corp.
http://www.reuters.com/article/fundsFundsNews/idUSN2545275620081125
Tell me why Sheila Bair is still at FDIC when the agency has failed in "examining and supervising financial institutions, and managing receiverships" and treating "all employees, insured financial institutions, and other stakeholders with impartiality and mutual respect." Tell me why FDIC is helping Morgan Stanley selling bonds in Hong Kong instead of focusing all its resources on us taxpayers; towns across the US is suffering as a result of continuous bank seizures and more importantly, the painfully slow followup.
http://www.bransondailynews.com/story.php?storyID=10989
http://metrospirit.com/index.php?cat=1990310070813675&ShowArticle_ID=11011003093855846
Furthermore, who gave Sheila Bair the authority to "expect her agency [to] finance as much as $500 billion in purchases of residential and commercial real estate loans" for Geithner's "legacy" asset program? What is this stupid suggestion box on the FDIC website about Legacy Loan Program when the reserve is currently at $19 billion and Congress hasn't even approved its Depositor Protection Act of 2009 (sorry it has now been UNETHICALLY AND SNEAKILY inserted into Credit Card Accountability, Responsibility and Disclosure Act)? Besides, didn't she write a letter to banks recently declaring potential FDIC insolvency this year?
Her original request to raise bank fees would net her $27 billion, not the $100 billion the House gave her, not the $500 billion the Senate plans to give her. Where in FDIC's mandate does it say FDIC fund can be used to guarantee "legacy" assets, especially when that fund is "borrowed" from taxpayers (up to $500 billion from the original $30 billion) and not even from bank premiums?
http://www.nbcnewyork.com/news/us_world/NATLGeithner-to-Unveil-Plan-to-.html
By the way, Isn't it criminal to create a bank run, a nationwide panic, when "the money is always there for depositors?"
What Sheila Bair said:
“Without these assessments, the deposit insurance fund could become insolvent this year,” Bair wrote in a March 2 letter to the industry."
http://www.bloomberg.com/apps/news?pid=20601103&sid=alsJZqIFuN3k&refer=news
What she said a few days later:
"Bair says FDIC has enough money but wants cushion"
http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE5282OL20090309
Isn't it criminal for a public official to lie in public?
What Sheila Bair said:
March 4, 2009
"No Taxpayer Funds Bair rejected arguments that the agency should use government aid to rebuild the fund. The FDIC has authority to tap a $30 billion line of credit at the Treasury Department and legislation pending in Congress would boost the amount to $100 billion.“Banks, not taxpayers, are expected to fund the system,” Bair said. Asking for taxpayer support “could paint all banks with the ‘bailout’ brush.” "
http://www.bloomberg.com/apps/news?pid=20601103&sid=alsJZqIFuN3k&refer=news
What happened:
March 6. 2009
"The Federal Deposit Insurance Corp. may reduce an emergency fee on banks to bolster reserves if Congress expands the agency’s borrowing authority with the Treasury Department to $100 billion, Chairman Sheila Bair said"
http://www.bloomberg.com/apps/news?pid=20601103&sid=aGewvZuHR3dk&refer=news
The Depositor Protection Act of 2009 (Credit Card Accountability, Responsibility and Disclosure Act): Up to $500 billion borrowing power by FDIC
http://www.opencongress.org/bill/111-s541/text
http://uk.reuters.com/article/gc06/idUKTRE52U6D020090331?pageNumber=2&virtualBrandChannel=0
What Sheila Bair said:
"Banks shouldn't be too big, says FDIC's Bair... Bair said one way the FDIC could become the systemic risk regulator for more financial institutions is if Congress gave the agency authority to oversee bank holding companies, which are currently under the Fed's authority."
http://www.marketwatch.com/news/story/limits-bank-size-should-eyed/story.aspx?guid={455321E2-6FCD-4218-8F83-3974F044445B}&dist=msr_18
What FDIC did:
FDIC Sold Wamu and Wachovia to make JP Morgan and Citigroup bigger
By the way, it really confuses me when regulators start talking about demanding authority to take over bank holding companies:
"Under the proposal, the Treasury secretary would have the authority to seize and wind down a struggling institution after consulting with the president and upon the recommendation of two-thirds of the Federal Reserve board."
Sheila Bair said that "[w]ithout a system that provides for the orderly resolution of activities outside of the depository institution, the failure of a systemically important holding company or non-bank financial entity will create additional instability as claims outside the depository institution become completely illiquid under the current system."
http://www.dailykos.com/story/2009/3/23/712027/-Can-the-FDIC-handle-the-big-banks
Instability? Illiquid? That's the excuse for not taking over the banking divisions of Citigroup or BAC when they are probably more insolvent than Wamu? Hey, if the Treasury and FDIC don't care about destroying the ENTIRE bond market after seizing the banking division of Washington Mutual Inc, then why pretend now?
You all just want more power so instead of making GS whole in the dark, you can do it out in open and tell America it is legal and within your jurisdiction."
It may take awhile until we know the true effect Sheila Bair will have on our country. I will continue to update this page with new articles...