Obama pretends to be tough

Politico has a quote little piece about how Barack Obama is pretending to stand tough against Wall Street’s raid on the treasury.

Of course, the only reason Wall Street is actually raiding the Treasury is because of Obama and Obama’s Treasury Secretary, Timothy Geithner.

Obama has already spent tens of billions on corporate welfare on his favorite banks and other financial institutions, such as Citi and Goldman Sachs, all while every week sees the federal government seize local and regional banks.

Citi and Goldman Sachs have enough money to spend on Washington lobbyists, and butter up the Obama administration.  More honest bankers do not.

Bailing out Citi

When people say that Geithner’s plan is needed or that mark-to-market is “unfair” because the banks have assets that they have to price at $0, they are telling untruths.  This may be because they wish to exaggerate for rhetorical effect, are ignorant, or else are lying.  Geither’s plan and the rollback of mark-to-market transparency both exist because banks bought assets at bubble-era prices, and but they can no longer sell them at bubble-era prices.

Tim Geithner is trying to change this. 

. Despite bank and Administration smoke-blowing to the contrary, the problem with the so-called toxic assets on bank balance sheets is NOT that they cannot be priced, but that banks do not like the prices on offer from willing buyers. We have read anecdotes suggesting that the gap is as big as bank valuation 90-95 cents on the dollar versus market prices of 30 cents, but the typical example is bank holding price of 80 cents versus market of 30 cents.

So let us repeat, the purpose of this program is NOT price discovery, and any claim along those lines is a lie. The purpose is to keep the banks from recognizing losses that already exist, by reversing them via unloading the paper at a fictitious high price and dumping the loss on the taxpayer.

via naked capitalism: Treasury Trying to Defend Bank Gaming of Public-Private Partnership.

With our corrupt politicians serving zombie banks, it’s no wonder the top three banks in the world are now Chinese.