Time for the Banks to Face the Hangman

[flashl]

It’s Time for the Banks to Face the Hangman

How can one defend a system that creates wealth by making the majority poor? – Henry C. K. Liu

Officials in the Treasury Department — working with their colleagues at Citigroup, J.P. Morgan and Bank of America — have concocted a scheme to rescue the banks from their massive losses in mortgage-backed securities. The group is planning to set up a $100 billion emergency fund that will purchase non-performing assets for short-term debt. In truth, the fund is a bailout that provides the financial giants with an excuse for not reporting their enormous losses from bad bets.

The story first appeared in Saturday’s Wall Street Journal and was followed on Monday with a second headline piece:

“RESCUE READIED BY BANKS IS BET TO SPUR MARKET”

WSJ: “The high stakes plan to RESCUE BANKS FROM LOSSES on mortgage securities amounts to a big bet that a consortium of financial giants — AT THE PRODDING OF THE US GOVERNMENT — can PERSUADE INVESTORS TO POUR MORE MONEY INTO THE TROUBLED CREDIT MARKET.”

That’s right. The Treasury Dept is directly involved in a scam that saves the banks while trying to “persuade” investors to “pour more money” into toxic mortgage-backed sludge. Treasury Department officials clearly have a different idea of “moral hazard” than the rest of us.
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[malaise]

1. But, but but

there's no money for SChip.

[flashl]

2. Bankers wary of rescue effort

"Markets are rather suspicious about that policy. It could interfere with the market mechanism and introduce biases," said Olivier Garnier, deputy general manager at Societe Generale Asset Management.

What? They are not trusting our government even when it is offering them our money?

:rofl:

[malaise]

3. The robber barons disagree about something

that can only help the rest of us.

[formercia]

4. Buy low sell high

They are setting up a fund to buy the securities when the hit bottom.

[FreakinDJ]

5. Stupid - Corporate Welfare

I liked Edward's plan much better.

[flashl]

7. Excerpt from article written about Corporate Welfare in 1994 ...

BIG-PICTURE ORGANIZING--PART 4: CORPORATE WELFARE

The idea of ending corporate welfare originated last year inside the Democratic Party's Progressive Policy Institute, or PPI (which the WASHINGTON POST describes as "moderate to conservative"). The PPI argues that decades of free handouts from Uncle Sam to wealthy corporations should be ended because (a) the money would be more productive if it were invested in retraining the workforce, and (b) free handouts to corporations shield them from competition in the global market, ultimately weakening them.

[ozymandius]

6. Socialism in action.

Socialized losses (your tax dollars and mine) and privatized gains. It's not a perfect engine for social economic equilibrium - but then it is a plan devised by people who have little use for either secured or unsecured debt beyond helping those whom the Fed officials know on a first-name basis.