Comments on: Treasury Plan Lifts Hopes; Fed Disappoints http://www.ritholtz.com/blog/2009/01/treasury-plan-lifts-hopes-fed-disappoints/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Tue, 14 Feb 2012 23:28:32 +0000 hourly 1 http://wordpress.org/?v=3.0.5 By: bruerr http://www.ritholtz.com/blog/2009/01/treasury-plan-lifts-hopes-fed-disappoints/comment-page-1/#comment-142373 bruerr Thu, 29 Jan 2009 07:46:29 +0000 http://www.ritholtz.com/blog/?p=17455#comment-142373 And government will be free to focus on fubar-foreign policy again. Let Obama and the common repaint some school buildings. Drink up lads. Be sure to use condoms. Pump up the volume, Hank. Timmy's about to announce the plan. And government will be free to focus on fubar-foreign policy again. Let Obama and the common repaint some school buildings. Drink up lads. Be sure to use condoms.

Pump up the volume, Hank. Timmy’s about to announce the plan.

]]> By: bruerr http://www.ritholtz.com/blog/2009/01/treasury-plan-lifts-hopes-fed-disappoints/comment-page-1/#comment-142372 bruerr Thu, 29 Jan 2009 07:38:19 +0000 http://www.ritholtz.com/blog/?p=17455#comment-142372 If banks are successful through representative agents Geithner/Paulson to unload their debt on others, the stock market will view that like a victory won’t they? … Be like a frat having a 20-keg party. Complete with background music (ice, ice, baby). Fed creates a shell entity to receive toxic assets, but pays a premium for the toxic assets. Then banks sell their debt at .80 cents on the dollar? Holy smoke! No wonder they half jokingly call it a bad bank. No private entity would pay that much for those assets. Fed does not foreclose on banks that are friendly with Geithner/Paulson. Collects the toxic assets in one location, and bundles them like mortgages originated by another lender. Bundles were sold to sucker clients at a premium (good for them), with a derivative enabling a big mark-up (good for them), competitor banks and other banks began to fail/were acquired (good for them), bad debt was written off against profits providing tax benefits on that toxic part they had to re-acquire (good for them); and then those same toxic assets are sold again (good for them): Debts are re-sold to government for .80 cents on the dollar (good for them). Government acts as another sucker-buyer, even greater sucker than the first sucker. Paying .80 cents on the dollar? (Good for banking indexes BKX and DJUSFN.) Government (playing part as village idiot) waits 6-9 months, so banks can take write downs and benefit by not paying tax on those assets. Approximate .30-.35 cents on the dollar tax benefit, claimed against taxes otherwise owed. (Ice, ice, baby) Bad bank hanky-panky, is the first step needed to help those friendly with the Paulson/Geithner silent/private banking association, escape accountability for having done anything wrong. (Ice, ice, baby) Not out of that woods completely, but after a bad bank entity is created and implemented, the chances of sweeping accountability dwindle (ice, ice, baby); leaving only a few to take the hatchet (who will probably get off lightly in the future if at all). Suffice to say, if they get this, they are one step closer to evading scrutiny and accountability. This is akin to a coup isn’t it? A financial Coup d’état. …allows them to consolidate their positions, obtain acquiescence of the populace (or the surrender of the government’s charter to protect them), and survive the conflict in a refortified manner. Thats a huge win for the top 2 percent. I know its like cheating in monopoly, but the market could rally on that for some time couldn’t it? I mean the floor traders will be celebrating that around the world. If banks are successful through representative agents Geithner/Paulson to unload their debt on others, the stock market will view that like a victory won’t they? … Be like a frat having a 20-keg party. Complete with background music (ice, ice, baby).

Fed creates a shell entity to receive toxic assets, but pays a premium for the toxic assets. Then banks sell their debt at .80 cents on the dollar? Holy smoke! No wonder they half jokingly call it a bad bank. No private entity would pay that much for those assets.

Fed does not foreclose on banks that are friendly with Geithner/Paulson. Collects the toxic assets in one location, and bundles them like mortgages originated by another lender. Bundles were sold to sucker clients at a premium (good for them), with a derivative enabling a big mark-up (good for them), competitor banks and other banks began to fail/were acquired (good for them), bad debt was written off against profits providing tax benefits on that toxic part they had to re-acquire (good for them); and then those same toxic assets are sold again (good for them):

Debts are re-sold to government for .80 cents on the dollar (good for them). Government acts as another sucker-buyer, even greater sucker than the first sucker. Paying .80 cents on the dollar? (Good for banking indexes BKX and DJUSFN.)

Government (playing part as village idiot) waits 6-9 months, so banks can take write downs and benefit by not paying tax on those assets. Approximate .30-.35 cents on the dollar tax benefit, claimed against taxes otherwise owed.

(Ice, ice, baby) Bad bank hanky-panky, is the first step needed to help those friendly with the Paulson/Geithner silent/private banking association, escape accountability for having done anything wrong. (Ice, ice, baby) Not out of that woods completely, but after a bad bank entity is created and implemented, the chances of sweeping accountability dwindle (ice, ice, baby); leaving only a few to take the hatchet (who will probably get off lightly in the future if at all).

Suffice to say, if they get this, they are one step closer to evading scrutiny and accountability.

This is akin to a coup isn’t it? A financial Coup d’état. …allows them to consolidate their positions, obtain acquiescence of the populace (or the surrender of the government’s charter to protect them), and survive the conflict in a refortified manner.

Thats a huge win for the top 2 percent. I know its like cheating in monopoly, but the market could rally on that for some time couldn’t it? I mean the floor traders will be celebrating that around the world.

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