The more I think about it, the angrier I get.
In my prior post yesterday, I explained how the “Troubled Loan Program” portion of Turbo Timmy's plan is a scam. It’s a thinly disguised bank bailout at the greatest possible potential future cost to the taxpayers. Encouraging private investors to buy up the bank's troubled loans using 33:1 leveraged ratios with this program means the system will be gamed. And doing it this way means there is no need to go through Congress for a bailout, which is yet another end-around our constitution.
Then it occured to me, what if the banks themselves do the gaming. They could use surrogate companies, or bribes to friendly hege funds, or other types of strawmen to buy up their "troubled loans" at high prices. If these "troubled loan" purchases later showed no chance of making a profit, the strawmen would default on their non-recourse government loans used to make the purchase leaving the taxpayers to completely foot the bill. As a matter of fact, the price paid for the troubled loans, though no doubt they will be above maket value, will be of secondary importance to getting the toxic loans off the bank's books and into taxpayers hands.
Heck, with the 33:1 leverage offered by Geithner's plan, all they lose is the 3% down payment, but the price the buyers pay for this toxic garbage might be 50% above market. And the high prices paid by the strawmen will have plausible deniability as each troubled loan portfolio will have different risk parameters. Valuations opinions will vary widely given the existing uncertainty in the real estate market.
In my prior post yesterday, I explained how the “Troubled Loan Program” portion of Turbo Timmy's plan is a scam. It’s a thinly disguised bank bailout at the greatest possible potential future cost to the taxpayers. Encouraging private investors to buy up the bank's troubled loans using 33:1 leveraged ratios with this program means the system will be gamed. And doing it this way means there is no need to go through Congress for a bailout, which is yet another end-around our constitution.
Then it occured to me, what if the banks themselves do the gaming. They could use surrogate companies, or bribes to friendly hege funds, or other types of strawmen to buy up their "troubled loans" at high prices. If these "troubled loan" purchases later showed no chance of making a profit, the strawmen would default on their non-recourse government loans used to make the purchase leaving the taxpayers to completely foot the bill. As a matter of fact, the price paid for the troubled loans, though no doubt they will be above maket value, will be of secondary importance to getting the toxic loans off the bank's books and into taxpayers hands.
Heck, with the 33:1 leverage offered by Geithner's plan, all they lose is the 3% down payment, but the price the buyers pay for this toxic garbage might be 50% above market. And the high prices paid by the strawmen will have plausible deniability as each troubled loan portfolio will have different risk parameters. Valuations opinions will vary widely given the existing uncertainty in the real estate market.
And for that matter, the "Toxic Backed Securities" portion of Timmy's plan is just as equally suspect as it provides non-recourse loans for purchasing the toxic assets, but leverage is only 5:1. Both portions of the Timmy's plan are a matter of heads I win and make a profit, or tails the taxpayers lose.
Never... and I mean never underestimate the ruthlessness of the American banking elite. And this is more true now than ever as they literally fight for their survival. They have bankrupted countries for profits and celebrated in some cases. This is about their survival and I look forward to documenting some of the their most popular international ruses at a later date.
Another point, is anybody really under the illusion that Geithner failed to pay income taxes because he made an honest mistake... or is it because he’s a crook? We're talking about tens of thousands of dollars here... it's not like he accidently deducted a couple personal expenses. In fact, he was specifically reimbursed in cash for his social security expenses; though he never declared he owed any on his income taxes. He can't be that stupid.
Also, please don't confuse your local banker with this group, whom I know many and are generally a great bunch of guys. Most have no clue about our banking elite's shenanigans until I enlighten them. I'm talking about the big bank executives who run America's financial system.
I will leave you with a few quotes from famous people as food for thought:
Also, please don't confuse your local banker with this group, whom I know many and are generally a great bunch of guys. Most have no clue about our banking elite's shenanigans until I enlighten them. I'm talking about the big bank executives who run America's financial system.
I will leave you with a few quotes from famous people as food for thought:
"History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and it's issuance." - James Madison
"Give me control of a nation's money and I care not who makes it's laws." - Mayer Amschel Bauer Rothschild"
From now on, depressions will be scientifically created." - Congressman Charles A. Lindbergh Sr. , 1913"
It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." - Henry Ford
"This [Federal Reserve Act] establishes the most gigantic trust on Earth. When the President [Wilson} signs this bill, the invisible government of the monetary power will be legalized....the worst legislative crime of the ages is perpetrated by this banking and currency bill." - Charles A. Lindbergh, Sr. , 1913
"The [Federal Reserve Act] as it stands seems to me to open the way to a vast inflation of the currency... I do not like to think that any law can be passed that will make it possible to submerge the gold standard in a flood of irredeemable paper currency." - Henry Cabot Lodge Sr., 1913
"Some people think the Federal Reserve Banks are the United States government's institutions. They are not government institutions. They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign swindlers." - Congressional Record 12595-12603 - Louis T. McFadden, Chairman of the Committee on Banking and Currency, June 10, 1932
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