If anyone out there still thinks big banks can be trusted to do anything other than line their own pockets, please read today’s story from Bloomberg.com about the PPIP. Here’s a reminder: PPIP, the Public-Private Investment Program, began last March and was supposed to be a way for banks to unload toxic mortgage securities so they could start lending money again and boost the economy. Well, guess who found ways to make a killing off the taxpayer-funded program? That’s right: Bank of America, Morgan Stanley, Citigroup and Goldman Sachs — the Four Horsemen of the Financial Apocalypse.
Bloomberg explains the way PPIP was supposed to work: “Under the program, asset managers were supposed to raise money from investors and, with additional capital and loans from taxpayers, buy as much as $1 trillion in toxic assets from U.S. banks, freeing up money for lending.”
Instead, reports Bloomberg, the Four Horsemen bought even more risky loans before PPIP got off the ground — $2.74 billion worth between the four banks, since March — in order to increase their profits from the program. Meanwhile, one of the underlying purposes of the overall bank bailout, increased bank lending to jumpstart the economy, has only happened in small spurts.
Today’s story confirms what we’ve written numerous times: The feds have done a miserable job of overseeing the bank bailout, handing over unfathomable amounts of our money to the likes of the Four Horsemen without setting strict enough conditions for the funds’ use.
This article appears in Dec 29, 2009 – Jan 4, 2010.
My fellow readers, I think in 2010 we should all resolve to turn the other cheek instead of bashing Frank Griffin no matter how hateful he turns towards everyone else. I noticed that in the last few hours on New Years Eve when the rest of us were spending time with family and friends, Frank was spending his time writing several posts on this blog. This tells me that while the rest of us were with loved ones he was all alone and bitter, friendless and with a family that doesn’t want him around. Such a man should be pitied, not hated. Let’s do our best to tolerate him in the new year. Peace and God bless.
“The feds have done a miserable job of overseeing the bank bailout, handing over unfathomable amounts of our money to the likes of the Four Horsemen without setting strict enough conditions for the funds’ use.”
— no, the feds did exactly what they were supposed to do. Plunder the mundanes (taxpayers) and give it to the elites. The too big to fails were bailed out under Bush & Obama — this is really legalized theft and counterfeiting. Consider also that fractional-reserve banking is basically legalized embezzlement when backed by the FDIC. This is common practice. Neither major party wants this to end. Crony capitalism or corporatism are good terms for this.
But, if you look at US history, many times the “too big to fails” were bailed out under the Dems and the GOP. One of Reagan’s very first acts as president was to push through a bailout of Chrysler that Carter wanted before leaving office.
Its called bipartisan plunder.