A Trillion More In Taxpayer Money
Treasury’s toxic asset plan could cost $1 trillion
Geithner releases initial outlines of proposal to be unveiled on Monday
Treasury Secretary Timothy Geithner intends to announce Monday aims to use the resources of the $700 billion bank bailout fund, the Federal Reserve and the Federal Deposit Insurance Corp.
The plan relies on a new government entity, the Public Investment Corp. to help purchase as much as $1 trillion in toxic assets on banks’ books.
[You may have thought the Government was already doing this – for an explantion of where the money has been going up to now see: https://mcauleysworld.wordpress.com/2009/03/21/aig-cash-channelled-to-hedge-fund-millionaires/ ]
The initiative will seek to entice private investors, including big hedge funds, to participate by offering billions of dollars in low-interest loans to finance the purchases and also sharing risks if the assets fall further in value. [The same Hedge Funds that have been receiving our “Bailout Dollars” to purchase “bad debt insturments” at 100% of face value – will now use those same “bailout dollars” paid out of American Taxpayer Dollars – to repurchase the same assets – but at 20 cents on the dollar – This is a criminal conspiracy of the highest order. For the Hedge Funds who received our bailout dollars there is no “risk” at all – only more profit at taxpayer expense]
Is Geitner complicit in this scheme or just a “fall guy” or “patsy” to take the blame when the facts become public knowledge? Is this why he can’t find qualified individuals to join his staff at Treasury?
1). Banks lend money and obtain mortgages
2) Most Banks do not “hold the mortgages until they are paid off in 30 years. The Banks “sell” the mortgages as “mortage securties” to investors – most notably “Hedge Funds” – like the ones run by Madoff and Stanford.
3). The investors/Hedge Funds ”insured” these securities through firms like AIG and Goldman Sachs. With CDOs (credit default swaps) and other “instruments”.
4). The Bailout dollars have been going in the front doors of banks and firms like AIG and straight out the backdoor to the Hedge Fund Firms and other investors. The great bulk of Taxpayer money spent to this date has not gone to restoring the economy or creating jobs but has instead gone to make the Billion dollar Hedge Funds, their Managers and Investors whole.
5). The governemnet did not even negotiate on the amounts paid out – the Hedge Funds have been paid 100 cents on the dollar. In some instances the Government overpaid by as much as 500% – Incredible Government waste in what could be a “criminal enterprise”.
6). These same Hedge Funds, their investors and the Foreign Banks who received the Taxpayer Bailout dollars will now be offered the chance to repurchase these same “assets”, using the “bailout money” that was “channeled” to them through firms like AIG. Repurcahse the same assets at 20 cents on the dollar. An immediate 80% profit at taxpayer expense.
7). At a minimum, this effort exposes the incredible failure of the previous bailout activities and an almost unimaginable amount of Government waste. The same parties to receive the “bailout cash” are now being ”invited” to “repurchase” the same investments.
Who Do You Think Benefits From The Ongoing Bailout Schemes? Tell Congress the Bailouts Were A Bad Idea to Begin With – To Stop Them Now!
Filed under: Bailout, Banking, Banking Crisis, Barack Obama, Financial Crisis, Financial Services Crisis, Mortgage Crisis Tagged: | Another Trillion In Government Spending, Obama Admin Invites Hedge Funds Into Toxic Mortgage Plan, Toxic Mortage Plan - Hedge Funds To Benefit