Tuesday, March 24, 2009
The Summers/Geithner Burka
I have spent the past 2 days looking at Trashy Tim's latest regurgitation of Horrible Henry's failed TARP program and the long blog I wrote examining the pros(none) and the cons(many) so depressed me that I sent it to my digital landfill and I will now try again. If you were hoping that that ill stared Obama Economic team might finally come up with a credible and fair plan to address the financial crisis, you had better think again. Henry Paulson's plan was bad but it was 3 pages and it was pretty clear. This plan of Geithner and summers is anything but clear. It is vastly complicated and I think a disingenuous obfuscation designed from the outset to confuse and obscure what it is: a gussied up cash for trash program which is yet another attempt to bail out the banks and foist the losses on the taxpayer . We are early in the economic depression of this country and you have to keep in mind that we have a real hydra headed monster on our hands. This particular stupid plan is more than a pig with lipstick, It is a pig with lipstick under a burka. It is a way to avoid bank nationalization and prop up insolvent banks. It involves setting up yet another government entity to buy up nearly worthless toxic debt held by banks. In yet another end run around congress and the American people, it involves dragging in a a heretofore solvent FDIC to be its pimp.It would create a "public/private partnership" using very little private(3-7% it seems) and the rest taxpayer money loaned at low interest to private equity firms and hedge funds in a hokus pokus scheme to try to talk up the prices of this trash by a mysterious auction process . You see the banks are insolvent if you pay 30 cents on the dollar for this trash and some are probably insolvent even if you pay 60 cents on the dollar,which is what the banks think a lot of them are worth. So there is a spread between what the market thinks and what the banks think they are worth and Geithner wants this "partnership" to pay what the banks want rather than what the market wants. To attract the hedgies he has structured it so they get most of the upside and the taxpayer gets most of the the downside. The loans to the hedge funds are non recourse loans as well which is what the hedgehogs wanted, meaning that the loans are secured by the asset(ie., the trash). It looks like it was written by the hedgehogs for the hedgehogs. This plan has Larry Summers fingerprints all over it. You may recall he was fired from the Presidency of Harvard for degrading and derisive comments about women. Where did he go for his next job? To DE Shaw, a big NY hedge fund.
People of the United States! Wake up! Your government has been and is still being run by and for the moneyed and financial interests of Wall Street and the Banking and financial fat cats who care not at all for the economic future of your children. These people , the Treasury and the Fed ARE the government. Even the Congress is powerless and of course the congressmen in the important Banking and Finance committees get the bulk of their campaign contributions from banks,insurance and real estate interests. And the really really sad thing that hit me is that Barak Obama in this financial debacle is George Bush in blackface, just like Al Jolson. His whole election is starting to look like a fraud. Virtually nothing has changed at the Fed and at treasury. Geithner's plans and Summer's plans are Paulson's plans. Bernanke's plans are Greenspan's plans. If Obama goes along with these Wall Street insiders in his economic cabinet, his presidency is doomed.
I was delighted to see a picture of Barak's pretty wife with a rake or hoe turning over sod for the white house garden. As I looked at that picture, it occurred to me that the country voted for the wrong Obama.