The Looting Has Become BrazenThe Market Ticker
Wednesday, May 27. 2009
Posted by Karl Denninger


Oh do come on:

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.

I predicted this a couple of months ago, if you remember.

I was too optimistic - I figured they'd try to hide it through some "side deal" with some company they funded:

I have already covered how you can get "screwed" (edited) a fourth time - that is, all the bank has to do is fund the "so-called private party" that is going to buy these "toxic" assets with an intentionally-written-off loan, thereby guaranteeing no more than a 5% loss. It is impossible to prevent this from occurring, by the way; money is fungible so who's to say which dollar came from where?

And since the banks will apparently get paid (by you the taxpayer) any difference between internal marks and the sale price, not only get to prevent more than a 5% loss off the market price, they do even better as they get to guarantee no more than a 5% loss off their internal mark!

We just keep adding scams on top of scams; if $170 billion stolen from taxpayers to "bail out" banks via AIG isn't bad enough, this program will be some $500 billion (or more), and that's not even the total value since some banks have been buying up "distressed" ALT-A liar loans with TARP money in front of this program's announcement!

I didn't think they'd be so brazen as to do it in their own name, which is nothing short of a direct instance of theft of public funds.

Most of the time when you rob someone (including the Treasury) you wear a ski mask so your identity is at least somewhat obscured. This has gone well beyond that; the banks are now robbing the public out on the open with the full complicity and cooperation of the government.

Do you intend to let this continue America?

No, this does not "fix" the economy. It can't. All it does is shift the loss from them to you, and those who must buy our Treasury debt so your Social Security and Medicare checks can continue to go out are not stupid enough to allow this to continue in perpetuity while tax receipts crash due to you losing both your job AND home.

It does, however, appear that The American Public is dumb enough to sit back and let themselves get robbed for several trillion dollars while at the same time getting evicted from their foreclosed home and laid off from their bankrupt company's job!

At least for now.

Disclosure: None material