Half of Bank Bailout Money Going to Shareholders

This from today's Democracy Now:

The Washington Post reports major US banks are on pace to spend more than half their bailout money on rewarding their shareholders. The thirty-three banks are set to receive some $163 billion in government bailouts. Half of that sum would go toward paying off shareholders over the next three years. The Bush administration touted the bank bailout as necessary to resume lending. But Treasury officials say the banks would never accepted loans if they weren’t allowed to redistribute dividends to shareholders. Democratic Senator Charles Schumer of New York is calling for the suspension of dividend payments at bailed-out banks. This comes as the New York Times reports the insurance company American International Group has rapidly used most of its $123 billion government loan with little account for where the money has gone. AIG has drawn some $90 billion in government money so far.

Did I read this correctly?! "The banks would never accepted loans if they weren’t allowed to redistribute dividends to shareholders". THE BANKS WOULD NOT HAVE ACCEPTED?!

Can anyone imagine a more arrogant attitude from the banks which the shareholders are now asked to bail out?

This just goes to show who really holds power in the USA.

Iran withdraws 75 billion dollars from EU banks

Ha'aretz reports:

Iran, acting on orders from President Mahmoud Ahmadinejad, has withdrawn around $75 billion from Europe to prevent the assets from being blocked under threatened new sanctions over Tehran's disputed nuclear ambitions, an Iranian weekly said.

"Part of Iran's assets in European banks have been converted to gold and shares and another part has been transferred to Asian banks," Mohsen Talaie, deputy foreign minister in charge of economic affairs, was quoted as saying.

Iranian officials were not immediately available to comment on the report in Shahrvand-e Emrouz, a moderate weekly, which did not specify the time period for the withdrawals which it said were ordered by Ahmadinejad.

"About $75 billion of Iran's foreign assets which were under threat of being blocked were wired back to Iran based on Ahmadinejad's order," the weekly said.

Iran's Etemad-e Melli newspaper, also quoting Talai, last week also reported that the world's fourth-largest oil exporter was withdrawing assets from European banks but did not give any figures.
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Commentary: Good news. Not only does Europe deserve to be sanctioned for its sycophantic attitude towards the US Neocons and their imperial follies, but that money will have no problems finding a safe haven in, say, Russian banks.

In the meanwhile, the barrel of crude almost reach $140 today, Saudi promises to increase production notwithstanding. This is going to be one mean summer...

Iran, Venezuela launch common bank

Press TV reports:

Venezuela has declared that it is establishing a common bank with Iran to finance economic development projects in the two countries.

The bank, to be based in Tehran, will have an initial capital base of 1.2 billion dollars, with each nation providing half of the funds, AFP reported on Tuesday.

It follows up on a March 2007 agreement the two countries signed.

The relations between the two countries has elevated to an unprecedented level during President Mahmoud Ahmadinejad's term.

Last month Venezuelan President Hugo Chavez said unity and cooperation between Tehran and Caracas has gotten the 'US imperialism' riled up.

"The two countries' cooperation has turned into a great unity between the Iranian and Venezuelan nations and this annoys the US imperialism," he said.

Banks recruited to wage financial war on Teheran

David Blair

America is waging a financial war on Iran designed to isolate its economy from the world banking system and compel Teheran to abandon its nuclear programme.

Step by step, the US Treasury is tightening the noose by persuading European and Japanese banks to join their American counterparts and stop conducting any transactions for Iranian clients.

Deutsche Bank was the latest to begin closing all accounts held by any customers — whether companies or individuals — based in Iran. For an economy largely dependent on oil revenues, these steps are severe.

Iran finds it increasingly difficult to raise loans, obtain foreign currency or hold any assets offshore.

Because obtaining dollars, euros or yen becomes harder by the day, Iran's ability to buy essential imports is steadily being eroded.

Foreign investment, especially in its critical oil installations, is minimal.

In effect, America is using its financial might to shut Iran out of the global economy. While the United Nations has passed two resolutions imposing sanctions on named Iranian individuals and companies — a third is likely to follow later this month — observers believe these measures are having far less impact than the financial embargo.

In a recent interview, Stuart Levey, the under-secretary for financial intelligence at the US Treasury, said these counter-measures were proving effective. "There is significant evidence that it's working in the sense that Iranian business is being subjected to greater scrutiny and it's more difficult for them to operate," he said.

Mr Levey is running America's financial campaign against Iran. The Treasury has now excluded two of Iran's biggest state-owned banks, Saderat and Sepah, from conducting dollar transactions. American banks were formally banned from doing business with Iran 23 years ago.

Under US pressure, European and Japanese banks are treading the same path. "We have informed our clients who have an account in Germany but are based in Iran that we will close their accounts," said a spokesman for Deutsche Bank, the eighth largest bank in the world as ranked by total assets.

UBS, the world's biggest bank as measured by total assets, took the same step last January.

A spokesman for HSBC, Britain's biggest bank and the world's fourth largest, said that no dollar transactions were being conducted for Iranian clients and business links with Teheran were now minimal.

Three of Japan's largest banks announced in June that no new business would be conducted for Iranian clients. Iran had avoided the US restrictions on dollar transactions by transferring assets into euros or yen. But this window is closing as European and Japanese banks enforce the same restrictions.

Iran has endured years of economic stagnation. High oil prices should be fuelling a boom, but financial sanctions limit Teheran's ability to use this windfall.

A diplomat who specialises in the Muslim world said this was exerting real pressure on President Mahmoud Ahmadinejad's government.

One Teheran newspaper recently reported that Iranian companies had seen their import costs rise by 20 or 30 per cent because they had to employ middlemen to evade financial restrictions.

Iran says that its nuclear programme is peaceful and designed only to generate electricity.

Mr Ahmadinejad accuses America of deliberately inflicting hardship on Iran's people and insists that he will press ahead with his nuclear ambitions.

Iranian banking officials in Europe are bracing themselves for a huge wave of lawsuits from European clients following the Iranian government’s decision to withdraw millions of dollars worth of deposits to Teheran.

The government took the action in the summer to prevent the funds being seized under the terms of UN sanctions, but the move has left several leading Iranian banks, such as Sepah, on the brink of collapse.

Banking experts estimate the Iranian banks are struggling to meet commitments worth an estimated £2 billion, and Iran’s Central Bank is refusing to provide the necessary backing.

The crisis in the Iranian banking sector, which is a direct result of the measures taken by the US Treasury, has already resulted in the resignation of Ibrahim Shibani as governor of Iran’s Central Bank.

Although other Iranian banks such as Bank Melli and Bank Saderat have been badly affected by the action of the Central Bank, the crisis facing Sepah has seen customers abandon the bank which has struggled to pay workers’ salaries