Friday, May 14, 2010

Shorebank Failure Could Cause Obama To Go Ballistic on Wall Street

UPDATE, MAY 18, 2010: GE joins effort to save Chicago community bank‎ (Reuters) Privately owned ShoreBank, a community development lender on Chicago's South Side near the home base of President Barack Obama and some of his top aides, is getting assistance from a consortium of Wall Street banks including Goldman Sachs Group Inc (GS.N), Citigroup (C.N), JPMorgan (JPM.N) and Bank of America (BAC.N), sources have said. Spokesmen for Citigroup and General Electric Co (GE.N) each confirmed $20 million investments on Tuesday, and JP Morgan previously said it was ready to inject $15 million. Another source said Goldman injected $20 million. The Financial Times reported (on May 19, GMT) that "Two people familiar with the deal said the next test for the bank was whether or not it could raise an additional $70m from the federal government." That would be in addition to the money from Goldman Sachs, Citigroup and GE Capital. As noted earlier, on May 5, the Chicago-area financial institution ShoreBank is (was?) teetering on the edge of extinction. It's been begging for a bailout - of your money, taxpayers - and one of its biggest advocates is U.S. Rep. Jan Schakowsky (D-IL, 9th). UPDATE, MAY 17, 2010: ShoreBank rescue talks continue, Crain's Chicago Business The Wall Street Journal reported late today that it looks grim for ShoreBank. They quoted Schakowsky as saying, "I'm in sort of hour-by-hour contact with them. It's still a bit of a nail-biter, but it's very, very active and they're getting closer to where they need to be." She has been busy for months lobbying for assistance for ShoreBank. WSJ also reported that "a person close to the situation said the outlook for the ShoreBank rescue effort looked 'pessimistic' on Friday evening." While the Obama Regime and others like Schakowsky love to bash Goldman Sachs publicly, they are also eager to take their money. Fox Business has this today: Wall Street firms looking to bail out the troubled community lender ShoreBank Corp. have yet to come up with the approximately $125 million needed to prevent a possible government takeover, FOX Business has learned. This is the most recent development stemming from an early afternoon meeting among executives at several big banks, including Goldman Sachs, Bank of America, JPMorgan, and Citigroup. According to one person with knowledge of the meeting, the banks have commitments for “a little more than $100 million,” thus raising the possibility that the deal to raise $125 million might not be reached by the end of the day, and that ShoreBank might be taken over by the FDIC Will these rescuers come through? There are some who think that the proposed consortium of Goldman Sachs and the rest may actually want ShoreBank to fail as a sort of sweet revenge on Obama's bashing of them. Obama's Gang has put enormous political pressure on those institutions to bail out ShoreBank. But the $100 Million "raised" so far is about $25 Million short of what's required. It's also chump change to those players, and that begs the question, "Are they deliberately letting ShoreBank fail as a big F--- You to Obama?" If so, theory has it that Obama might go ballistic, seeking his own revenge on the Wall Street Big Boys. That seems to be the plausible theory over at Zero Hedge, a commodities trading-oriented blog. Zero Hedge's Tyler Durden wrote today, "We have the feeling that if Shorebank does indeed fail, then the Obama-Wall Street war is about to go 'scorched earth'." There have plenty of other Illinois bank failures recently. Two in particular stand out, however, because of the involvement of high-level, high-profile elected officials. Joel Pollak wrote this at BigGovernment on May 14: "Today it was reported that Goldman Sachs CEO Lloyd Blankfein has been calling Wall Street friends to cough up $125 million to save ShoreBank, which faces federal closure next week. Rep. Jan Schakowsky suggested in January that Illinois taxpayers foot the bill. That would have been the first state-led bank bailout in U.S history. The idea was abandoned–so it appears the government is shaking down Goldman Sachs instead." Pollak, a Republican who is running for Congress against incumbent Schakowsky in the 9th District, also noted the close connections between ShoreBank and the Obama Regime (he politely used the word "Administration"). He noted that Shorebanks execs "have contributed in the past to Rep. Schakowsky and other Illinois politicians. ShoreBank did not just make loans in poor communities–there are other local banks that do that without getting into trouble–but also specifically made loans that the recipients had little hope of repaying." Sound familiar? Flash back not so long ago to the recently failed Broadway Bank in Chicago, which was owned by the family of Alexi Giannoulias. He's currently the Treasurer of the State of Illinois. Illinois is also bankrupt. Both Illinois and Broadway Bank owe their financial hard times in part to Alexi Giannoulias, who has the nerve to be running for the U.S. Senate (against Congressman Mark Kirk). Like Schakowsky, Giannoulias is a Democrat. Broadway Bank made huge loans to known criminals and other loans to a variety of skanky characters. (But this is about Shorebank, not Broadway Bank.) Chicago News Bench noted on May 5 that the probable failure of ShoreBank is "about much, much more than just ShoreBank. It's about corruption, the $10 Trillion cap-and-trade scam, the continuing attempt by Schakowsky and the Democrats to seize control of America's energy policies, and more. It's about the Joyce Foundation, which is a major shareholder of ShoreBank and also a major player in the Chicago Climate Exchange (CCX). CCX trades in 'greenhouse gases.' Franklin Raines, George Soros, Al Gore, Goldman Sachs, Barack Obama and others are big players in this story. (At this point, I strongly suggest that you watch Glenn Beck explain the twisted story of the Chicago Climate Exchange and the Joyce Foundation.)" Pollak noted the "green" connection, too, when he referred to the Obama "Administration" connections, "including controversial figures such as former 'green jobs czar' Van Jones." Fox Business points out that "ShoreBank has ties to the Obama administration; Valerie Jarrett, President Obama’s senior adviser and a fixture in Chicago politics (as was the president), served on the board of Chicago Metropolis 2020, a civic organization which was run by Adele Simmons, a director at ShoreBank. A spokeswoman for Jarrett says she 'has not met with or made calls for ShoreBank regarding support measures'." RELATED: Racing To Save ShoreBank, Spawn Of CRA‎ Investor's Business Daily Obama using classic Chicago shakedown to rescue his south side buddies at Shorebank/Chicago by extorting Goldman Sachs WSJ MarketWatch Obama Darling Shorebank Likely Left To Fail By Goldman et al Over $25 Million In Pocket Change Zero Hedge Gore, Goldman, and Cap and Trade - Tangled Web of Corruption Investor Village The Star Players in the ShoreBank Story Central Illinois 9/12 Project