Just another Reality-based bubble in the foam of the multiverse.

Tuesday, March 10, 2009

More Simple Answers to Simple Questions

At Kos, bobswern asks a simple question:

Wall St. Bailout: Is A Massive Scandal About To Unfold?

...Reports have been circulating, based upon leaks to the media over the past 24 hours, that:

1.) AIG ("Bad Bank" #1): $50 billion of the $173 billion forked over to AIG, since September, has been doled out to a handful of Wall Street heavy-hitters--a/k/a the "couterparties" that paid AIG to insure their toxic paper--to support their so-called insurance claims, backed by the good faith of AIG; folks who happened to make a pantload of money writing insurance policies on these Credit Default Swaps and Commercial Debt Obligations over the past few years.

We have Ms. Morgenson in the NY Times telling us the counterparties' sweetheart deals are "likely to increase" in terms of sheer numbers of billions of taxpayer dollars. But, it's the additional documentation ("NEW INFO") below Morgenson's quote which is most troublesome...it's not $50 billion...it's already $80 billion...and these same firms are receiving 100 cents on the dollar for this toxic paper, too!

...It's already a LOT more than $50 billion, which was reported as "the number" in the past 24 hours; it's at least $80 billion and growing, or almost half of all the funds sent to AIG to date...and growing; perhaps much more if not MOST of the funds dished out to AIG to date all going to the same usual suspects...

The facts are we may just be scratching the surface on the AIG matter. It's going to--and already is--getting much more out-of-hand than originally reported, and virtually all of those funds has gone to the same 20-25 firms (and that's only as of late December '08); and, perhaps even more outrageous, it appears that a trend had developed early on with regard to these toxic debt purchases, whereby the recipients (that same list of 25+/- firms) of the Treasury Department's and the Federal Reserve's largesse were profiting to the tune of 100% on the actual value of the paper being purchased. They're doing this by allowing the counterparties to KEEP the collateral, on top of receiving the payments!!! (See story link and quote, immediately below.) In other words, the Fed was overpaying these firms to the tune of full face value, 100 cents on the dollar, on paper that was only worth from 20 cents to 60 cents on the dollar in the marketplace!

...The Treasury Department is currently in the process of providing a $500 billion infusion (along with another $1.5 trillion government guarantee to the hedge fund industry) into the Federal Deposit Insurance Corporation. And, while some naive speculation in the MSM is focused upon a handful of large bank defaults with regard to how this money is going to be spent, the reality is that it's apparently the stealthiest way for the government to actually provision that "Bad Bank" that everyone's been hearing about. (Some have said that the first bad bank was, in effect, AIG. But, based upon the sheer magnitude of Geithner's plans--already on record in a few stories--for this massive FDIC scam, the AIG mess pales in comparison.) You see, Geithner's stated plans call for "private investment" (i.e.: hedge funds and sovereign funds) to buy up as much as another $2 trillion in toxic debt; but here's the scam: the government is going to insure 100% of all investor's funds via the FDIC, under something they're calling, a "Temporary Liquidity Guarantee Program," basically eliminating all risk in the deall for these hedge fund investors!

...1.) AIG: Almost all of the $173 billion that's passed through AIG may be going to these 20-25 key Wall Street "players." It's not the $50 billion that's been widely reported in the past 24 hours. We know it is at least $80 billion...and growing. And, these good ole' boys are getting 100 cents on the dollar on assets that are only worth between 20 cents and 60 cents on the dollar now.

2.) FDIC: It appears that the primary reason the FDIC's sole mission is being contorted is to: a.) provide a massive handout to the hedge fund and sovereign fund sectors, b.) avoid the negative spin that would occur if this was labelled for what it actually is, a bad bank and a massive extension of TARP, c.) and a situation where much more control of our nation's traditional banking services are being put in the hands of a grossly underregulated hedge fund industry cowboys...the exact opposite of the much more intensive regulation which is, both, so desperately needed and for which so many are clamoring as I write this. (In reality, we're turning over the keys to the car to the very "drivers" that got us into this mess in the first place.)


Simple answer: No. There is scandal, but it will only proceed, not unfold.

Obama is owned by the Free Marketeers.

There will be no real fixes, only patches that give the privateers more license to steal from us in more inventive ways, while the Faithful read the latest Washington Scripture.

Seeing is believing.

All I see is a lot of posturing while letting the banksters of Goldman-Sachs continue to steal the show.

Even if he stopped it all tomorrow, the money would be gone. He won't, he can't. Instead he continues to try to ride the tiger that's eating him. His excuse is that he has to compromise to effect change.

Once we all pass through the colon of the Company we'll have change, alright.

For us, the change I see is more like a Joan Rivers facelift for progressive policy.

The wrinkles are gone, but it's still the same old story underneath.

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