It was like Osama Bin Laden showing up at the gates of the CIA and being turned away.
It was like Harry Markopoulos showing up at the door of the SEC and being turned away.
Lo and behold, who shows up on Capitol Hill Today? Well, he has many names:
The Final Nail.
Mister Kleptocracy.
Osama Bin Geithner.
People fail to realize those toxic assets owned by the banks are bought and paid for. That's why they are called assets. They are like OJ Simpson trading cards; once valuable, now worthless.
The banks own so many of these things, and levered up to buy them, that they are insolvent in the sense that they have no money, and cannot sell assets to raise money.
This condition makes it tough to offer loans, and even make payroll. They are zombies which only function thanks to the government and our money. Anything they do that resembles business is done with a government guarantee against losses.
Anyone who owns shares in these banks knows full well the state they are in. Like any investor, they can cut their losses at any time, or they can hope for the best. Hoping for the best is actually a strategy in this case; it's a gamble that the government is going to take money from you and I, and give it to them.
I don't remember Enron shareholders being made whole, and they were victims of outright fraud.
The banks claim, among other things, that they didn't see it coming. If you try to give them the benefit of the doubt, you have to reconcile statements such as:
"[A]s long as the music is playing, you’ve got to get up and dance. We’re still dancing," he (Chuck Prince, CEO of Citi) said in an interview with the FT in Japan.
That wasn't music, Chuck; that was ass gas, and now it's screaming.
In what world does it make any sense to buy toxic assets from the banks? First of all, Geithner's proposal of $500 billion is just a drop in the bucket, and he knows it will do zero for the economy, but he can't bleed us all at once. It's better to risk prolonging the recession than it is to risk the chance of helping the banks get our money.
The best, most hopeful outcome will be for the banks to become healthy, to keep existing management in place, to keep the same names, and to make the shareholders whole.
Remember; these banks are insolvent. Their entire market cap is just a fraction of $500 billion.
With $500 billion, you could start 5 new banks, each with $100 billion. Do you know what those banks would want to do? They would want to lever up 10 times by making loans. That $500 billion represents $5 trillion through the black magic of fractional reserve lending.
These would be healthy banks with new management and new names, and they would be looking to do business.
I don't want to get into the serious flaws with Geithner's plans. It would sort of justify them, when in fact his motive has nothing to do with helping the economy.
I would love to know what powers have forced Obama to install the biggest piece of shit in existence to engineer our recovery.
If he can't stand up to those powers, then fuck him, and fuck all the bankers. There is going to be blood in the streets, because we are rapidly getting to the vortex of cyclical deflation. If you think things are tough now, then you won't believe what is going to happen to us.
This is worldwide, folks. We promised 6 billion people that capitalism will do great things for them. Larger and larger numbers will soon be eating from garbage cans, and everyone will be following the most fascist of the fascists.
Between the stimulus, and now Geithner, I have never seen such ineptness and self-serving. We had a chance to arrest Geithner on Capitol Hill today and missed him.