Get ready to bend over taxpayers: Here it comes!
Geithner finally plans to announce his "bank recovery" program tomorrow:
"WASHINGTON: White House economic advisers said Sunday that they believed private investors would respond with confidence to a plan that would try to coax them to form partnerships with the government to buy as much as $1 trillion in toxic assets from banks.
The plan, being presented Monday by the Treasury Department, is likely to offer generous subsidies, in the form of low-interest loans, to facilitate the purchase of troubled mortgages and related assets from financial institutions.
To help protect taxpayers, who would pay for the bulk of the purchases, the plan calls for auctioning assets to the highest bidders
To entice private investors like hedge funds and private equity firms, the F.D.I.C. will provide nonrecourse loans — that is, loans secured only by the value of the mortgage assets being bought — worth up to 85 percent of the value of a portfolio of troubled assets.
The remaining 15 percent will come from the government and the private investors. The Treasury would put up as much as 80 percent of that, while private investors would put up as little as 20 percent of the money, according to industry officials. Private investors, then, would be contributing as little as 3 percent of the equity."
Anyone else thinking that this rescue plan will result in nothing more than just another raping of the taxpayer?
Basically private equity is going to have a chance to grab $1 trillion dollars worth of assets with little to no risk . Gee, if this isn't tightly regulated, do you think we might see more fraud and corruption here? I will withhold judgement until I see the details but I am already very skeptical.
Geithner better be careful here because both the taxpayers and Congress have had about enough of Wall St and this historic fraud.
I want to thank one of my readers(thanks Joey!) for sharing a great article from Rolling Stone.
This piece does a great job exposing the collapse of AIG and how the bankers benefited from it. It also suggests that the bankers are using this crisis as a way to gain even more power over the financial system.
Have a barf bag next to you when you read it because the fraud and corruption that's so eloquently described in the article will make you sick.
These bastards need to be stopped.