Banks Lobby To Be Both Buyers and Sellers In Troubled Asset Program

wsj.com:

Some banks are prodding the government to let them use public money to help buy troubled assets from the banks themselves.

Banking trade groups are lobbying the Federal Deposit Insurance Corp. for permission to bid on the same assets that the banks would put up for sale as part of the government's Public Private Investment Program.

Read the whole story: wsj.com

Comments

[tweedledeedumb]

The rich are stealling trillions of dollars from the tax payers right now and we wonder why we don't have the money to pay teachers, cops, and firemen! Good thing we have a right to bear arms!

[LunaPark]

And everyone is screaming for more regulation which will be written by bank lobbyists to kill off more competition while rescuing the poorly run institutions. Just like Nixon said, "Get big or get out." Soon there will be only a handful of banks left to monopolize our financial system. The CEOs will be reclining in their barcaloungers puffing on a fat cigar.

[themodernleader]

ErnestineBass. The banking interests aim to keep the people and domestic commerce in perpetual poverty and servitude with usurious interest rates on lines of credit.
In my study of history, the end of democracy and the rise of autocracy go hand-in-hand. Some form of feudalism could result. Most assuredly, weaker minded, superstitutious and tradition bound citizens replace the independent, autonomous and highly motivated citizens of the golden age of the democracy. In our own country we see a precipitious decline in occupational and technological innovators and masters of the physical world. The loss of hope and confidence and the rise of faith and pride result from atrophying opportunity for all citizens. The policy of the Obama Administration is opportunity and advantage for the few on the backs and sweat of the toil of the many.

[TJCole]

This is the moral hazard of bail out all these corrupt banks and not Nationalizing them, they are not paying for their bad practices and even out right fraud...

Nothing has changed thanks to Paulson and now Geithner..­.nothing..­!

We must change the banking culture..!

[themodernleader]

In this farcial economic recovery plan the only players and benefactors are the big boys. The ordinary people are throw-away variables in the big financial view of the future.

[ErnestineBass]

"They" want to return feudalism, tml, no doubt about it.

[FogBelter]

It's ironic how Check Kiting was once the bane of the Banking Industries' existence ... now, securities kiting is their only hope for salvation.

[ErnestineBass]

I wouldn't call it salvation. More like a new business model.

[Carolab]

Here is a link to the whole article:

(snip)

One risk is that certain hard-to-value assets mightn't be fairly priced if banks are essentially negotiating with themselves. Inflated prices could result in the government overpaying. Recipients of taxpayer-funded capital infusions under the Troubled Asset Relief Program also could use those funds to buy their own loans.

http://www.investorvillage.com/mbthread.asp?mb=476&tid=7312675&showall=1

This quote illustrates why Geithner proposed recycling "repaid" TARP monies back to the banks.

[bobwalters]

This is the very three-card-monte Dr. Stiglitz and Dean Baker have warned about: the crooks gaming the system to extract even more of the taxpayer's money at no risk to themselves, all the while appearing to be cleaning up the mess on their books. How do I go about becoming a bank??

[Carolab]

Exactly. They are, once again, offloading their liabilities and their risk onto US and planning to take up the bulk of any "profits". They dump their toxic debt onto us at a price they set for the "assets", in order to clean up their sheets in time for the FASB's new accounting rule to take effect (next year) whereby they have to bring their toxic assets off their balance sheets onto their balance sheets, and profit from the "exchange" by keeping taxpayer money via the Fed and Treasury even if the "asset" proves worthless.

[Carolab]

So, they want to loot the FDIC to buy through the PPIP? Now that the smaller banks have gotten their fees raised to replenish the depleted FDIC funds?

What are we doing, America? Why aren't we stopping this?

[Carolab]

Here is a Khanacademy video on Geithner Plan II:

http://www.youtube.com/watch?v=n-arbfLTCtI

[tweedledeedumb]

Good video...Thanks...

[ErnestineBass]

Sheila Bair is our last hope.

Let's hope she digs her heels in...and says NO.

[americaforme]

If the lobbiest are (the banks), willing to pony up to the prices of senators and congressmen, for their supposed war chess. We will keep an eye out for the amounts syphoned into their coffers. I know this one wont come cheap. I wonder when all the justifaction for the act of buying what they allready sold, will come. This group of greedy jerks will go to any length to screw (we the people). If congress can be bought, we will know in a few days, via the media who's bought too.

[DiogenesOfAlaska]

Sounds like the Enron-scam on BigBrother to me.

[Rule Of Law]

Lot's of folks here still don't believe that this was all planned from the beginning. This economic "crisis" is a scam, a game, a rip off.

"Some banks are prodding the government to let them use public money to help buy troubled assets from the banks themselves."

Scream catastrophe! Have the FED and the Treasury threaten martial law if a bailout doesn't happen. Strong arm Congress into writing you a blank check. Then use the money to concentrate your power.

Conspiracy? He// no. Just business as usual for the Wall Street banks that own this country.

[DiogenesOfAlaska]

There are two sides of this coin.

That banks are now trying to make free lunches in the most despicable ways is no doubt true. It is always true, but usually, there are very few free lunches available.

Hence it is of the highest importance to impose transparency at all levels and to fully impose reputational consequences.

But to say it was planned is not compatible with the facts. It's a fantasy, and it's not healthy.

[Carolab]

It was planned.

[PATina]

I agree. The banks saw that the economy was dropping and took proactive steps to make sure they didn't lose any money. The republican administration saw a chance to stop Obama, the election frontrunner, from pushing his progressive agenda (notice how as soon as the bailout was announced all the pundits wanted to know if Obama was going to back off of campaigning on health care, education and energy?). And we fell for it. I can understand why some people would fall for it then. What I don't get is how they keep deluding themselves. All of a sudden, the banks (who still have the toxic assets on their books) are making a profit... and they are thanking the bailout gods for a miracle.... hahahahahahahaha.

[MissingAmerica]

These people originally got their money from the public. Once they've killed us, who will they fleece next? The banks need to be regulated, not funded.

[loki]

Ok, let me get this straight. The same capitalistic ivy greeders who broke mortgages up, put principle and fees into one so called security, and the interest baring into another so called security, and then played a game of hot potato with the worlds financial system and created the mess we are in today, they want to now recycle their trash and do it all over again?
Good God, its just totally insane and dumb enough that the Government will let them do it!

[research]

Shameless!

[DiogenesOfAlaska]

The task is to explain to the public that reputational effects of shameless behaviour are not as you would expect if you were, say, Alan Greenspan.