A New Year But Same Old Story

A new year but same old story from the Obama Administration - more reports of coddling of the financial oligarchy and Wall Street. This time from Bloomberg: No Good Deed Goes Unpunished as Banks Seek Profits from Bailouts. This story of centers around the now infamous PPIP program. The one crafted by the financial oligarchy's biggest protector in the Administration - Timothy Geithner.

The supposed purpose of PPIP was to purchase, through government and private investors, some the bad debts that were the books of "troubled banks". Well, guess what. Financial conglomerates are not stupid (they may be incompetent when it comes to assessing risk):

Only months after it was started, the U.S. program designed to purge debts of no immediate discernable value from the balance sheets of troubled banks has helped transform the frozen debt into a money-maker as the bonds have rallied. Bank of America Corp. and Citigroup Inc., who received 22 percent of the $418.7 billion American taxpayers loaned to troubled financial institutions, boosted holdings on their trading books of home- loan bonds that lack government guarantees while investors were raising cash for the program, according to Federal Reserve data.

Got that? According to Bloomberg reporters' analysis, the two biggest zombie banks actually went out and purchased more "toxic assets". But these two zombie banks were not alone:

Charlotte, North Carolina-based Bank of America along with Citigroup, Morgan Stanley and Goldman Sachs Group Inc., all based in New York, added a combined $2.74 billion of the debt, for which there were few buyers as recently as March, to their short-term trading assets during the third quarter, up 13 percent from the second quarter, the most-recent data show.

(Of course, emphasis added)

Not so funny thing is that these toxic securities are rallying now but what if the economy tanks again? Remember, these financial conglomerates don't have a good track record at assessing risk. And these trades are again speculative on the part of the financial conglomerates - what the hell do they care they got cheap money to make these purchases. So if this market tanks again it expose these financial conglomerates to even more losses that the PPIP was suppose to mitigate.

“It’s a trade that will likely work out, but it’s still a speculative trade, which is not what a taxpayer should want from firms that have only recently come out of critical care,”


Sadly, this isn't surprising. Nothing has changed from the beginning of this crisis until now. There has been no accountability for the irresponsible actions of financial conglomerates. The bondholders and equity holders are still their positions. And now some of those financial conglomerates that caused this crisis are profiting from the unwinding of the mess they created. Same old story.

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got something even worse.

Bernanke promoted Patrick Parkinson director of Banking supervision.

This same guy claimed derivatives weren't a problem, were not risky and the CFMA, back in 1999, which deregulated the markets and enabled these vehicles to be successful, all good.

But wait. Bernanke said

that weak regulation caused the crisis. So, is he going to say something publicly to save his ass but do something entirely different behind the scenes. Is this appointment of Parkinson an indication?

Bernanke has very little credibility - IMO.

RebelCapitalist.com - Financial Information for the Rest of Us.


Parents all over the world teach their children that if they work hard they will prosper and the government makes a mockery of that. We also teach them that if they fail then they should learn from that failure and try again. The government makes a mockery of that as well.

But "our" government is owned and controlled by financial

oligarchy. Government in itself is not bad. Government owned and controlled by big money interests is BAD.

RebelCapitalist.com - Financial Information for the Rest of Us.

blame the victim

We also have, right now, a host of articles trying to claim the reason one cannot find a job is there is "something wrong with them". i.e. it's all that person's "fault".

Disgusting and what's wrong with them? Over 35?

This claim that one can just "make it on one's own bootstraps" with "hard work" is just such a fallacy. It's the social structures which can enable social mobility, innovation, the opportunity to succeed.

Those have been steadily dismantled in the U.S. One can go 6 figures into debt to obtain an education and still not be able to land any sort of job to even pay off the debt.