(From the poor to the wealthy class).
Geithner's proposed PPIF Fund (to be announced early this week) is nothing but a massive scam.
The so called democratic party will now preside over the largest transfer of wealth from the poor to the wealthy class in World History, and it proves all too well that change has NOT come to Washington. in fact, had mcsame been elected, the exact same course of action would have been taken by HIM.
The plan, which goes by the opaque moniker the "Public-Private Investment Fund" (PPIF), is designed to provide lavish incentives to hedge funds and private equity firms to purchase bad assets from failing banks. It is a sweetheart deal that provides government financing and guarantees for illiquid mortgage-backed junk for which there is no active market.
The Obama administration is clearly afraid to use the shifty Geithner to sell this boondoggle to the American people. Geithner's last performance put the equities markets into a swan-dive.
Details of the plan remain sketchy, but the PPIF will work in concert with the Fed's new lending facility, the Term Asset-Backed Securities Loan Facility, or TALF, which will start operating in March and will provide up to $1 trillion of financing for buyers of new securities backed by credit card, auto and small-business loans. Geithner's financial rescue "partnership" will also focus on cleaning up banks balance sheets by purging mortgage-backed securities (MBS).
In Monday's New york Times, Paul Krugman summed up the Geithner plan like this:
"Now the administration is talking about a "public-private partnership" to buy troubled assets from the banks, with the government lending money to private investors for that purpose. This would offer investors a one-way bet: if the assets rise in price, investors win; if they fall substantially, investors walk away and leave the government holding the bag. Again, heads they win, tails we lose.
Why not just go ahead and nationalize?"
Why not, indeed, except for the fact that Geithner's and his boss’s main objective is to "keep the banks in private hands" regardless of the cost to the taxpayer.
This is a gigantic taxpayer funded corporate welfare plan to wipe out the toxic paper created by greedy, reckless, "self-policing", Sarbanes-Oxley ignoring banks. Not one bank executive will be fired or investigated by the SEC or Congress.
The "reasoning" for this horrid scam is the banks "won't extend credit" with all of the toxic paper on their books. banks must "get rid of their toxic paper so they can start loaning money again and get the economy moving".
REALLY?.
Exactly WHAT conditions are Obama/Geithner putting on the Zombie banks receiving our taxpayer money? At what interest RATES will our benevolent banks again start loaning money to we, the little people? Affordable rates? and what credit score will be required now (not before when anyone breathing could get a loan; no job required, no assets, etc.) to get a loan for a car or home? 700?
This is a joke, folks, a pathetic joke.
"Mr. President: Tear Down This Banking System".
http://www.boomantribune.com/...
http://www.counterpunch.com/...