PainfullyAware

U.S. Profits from Bailed-Out Banks

On Sep 01 09:34 AM whisperonthewind wrote:

> PainfullyAware, the government doesn't make money, it takes money.
> It doesn't earn money because it doesn't work.

Things Have Become "A Bit More Grey" than your definitive "Government Does Not Make Money".

Congress Abdicated its responsibility for "Coining Money" To A Private Entity - The Federal Reserve - which does "Make Money";. Not for the benefit of the citizen but for the benefit of the "Club".

I agree that Government only leaches and does not "Provide Value With Recourse Or Reciprocity For Failure" In Regard To "Money Creation".

However, Fiat Monetary Policy and Fractional Reserve Banking DOES Create Money. (even If It Is Fictitious and Not Tied To Any Finite Quantity.)

U.S. Profits from Bailed-Out Banks

Government "Made Money" from the "Magic Money Fountain" of the fiat money system and the implementation of the "Shell Game" by its select TARP Banks.

4 billion to date => 4.1667 billion per year => Only 336 Years to Go Until TARP PAYBACK => Only 2880 Years To Go Until Pay Back on The 12 Trillion.

Yes the rate could increase but it is doubtful that it would by "Honest Business".

If This Is "Making Money", Then The Government Sucks At It.

What FDIC Auctions, Loss Sharing Deals Don't Tell Us

On Aug 24 09:00 AM john s. gordon wrote:

> 'extend & pretend' -
> FDIC is waiting for consumer price inflation to reflate the monopoly
> $ 'value' of the 'assets' that are currently overvalued on banks'
> books?

Absolutely True !!! Great Intuition !!!

Guaranty Financial: Private Equity Bidders Not Allowed Even as Monday's Deadline Approaches

"what is the alternative?" - Mono

What "Should Be Happening":

1) FDIC returns Depositor Funds and allows them to "Vote" where they put their money next.

2) Receivership "Partnerships" created to manage "Liquidation Of Assets".

It is unfortunate that number 2 is the "Hitch In The System" because of the possibility of the "Fraudulent Valuations" and "Financial Engineering" possibly becoming "Public Knowledge". These are the main reasons for the "Behind The Veil Bid Auctions" with Extremely "Short Time Frames For Diligence".

If the "Reality" of the "Failed Banks" were allowed to be known "Bank Runs" would begin in earnest within the system for fear that other institutions were practicing the same "Magic Finance".

The "Liquidation" is prohibited by the FDIC in part because of the "Effect It Would Have" in "Exposing Reality".

There are Banks that have used TARP funds to become "Successful Bidders" in the FDIC "Auctions" and have no intentions of liquidating until the "Market Recovers" or the deadline of 7 years from "Purchase" arrives and the liquidation is mandated.

The "Pretend Until The End" Continues.


On Aug 16 10:32 PM Mono wrote:

> provocative point. what is the alternative? running these banks like
> hedge funds via PE is probably next step. im sure you read even the
> fed is picking up traders.
>
> sad state when that is the defacto

Why Are Banks Paying Back Loans They Can't Afford?

Agreed - The issue lies in the "Actual Default" of the underling assets and the "Insane Complexity" that Evolved from "Unaligned Interests" of Originators and Securitizers.

In Theory - None Of The Structures I Mentioned, nor the ones I did not, Are "Toxic". However, the current rate of Default and Bankruptcy coupled with the Complexity Issue makes ALL OF THEM Suspect.

In the end (maturity), not all will be worthless. It Is Roulette At This Point.

Based upon my exposure to distressed real estate I conclude that there was a greater amount of "Fraudulent Valuation" than not; further adding to the fire.

Cyanide as a chemical is not toxic, until one is "exposed".


On Jun 11 10:51 AM greedcanbgood wrote:

> Painfully aware - I concur that the difference between investment
> and commercial banks has become more blurred. That said, while most
> of the investment banks are now running under commercial charters
> it does not change (in the immediate term) their current business
> model and thus they remain starkly "different" from thier legacy
> commercial bank peers.
>
> I'm quite familiar with off balance sheet instruments and yet not
> ALL credit default swap contracts or any of the other instruments
> you cited are, by defintion, "toxic." The problem here is that "toxic
> assets" is the latest and greatest buzz word that exists without
> definition. I do agree with you however in that the more these instruments
> are "pyramided" with one another the more difficult it is to asses
> their realitive value - and risk. Yet, that alone does not make
> them "toxic". If you are as familiar with these as you seem to be,
> you would know that they also exist as simple transactions.

Why Are Banks Paying Back Loans They Can't Afford?

greedcanbegood

I find it interesting that you say that there is a "Difference" between Investment and Commercial banks, yet the Repeal Of Sarbanes/Oxley Muted The Distinction. Things Have Become Much More Blurred.


Your angling for a better definition of "Toxic Asset" shows that you have not done much research on the subject. I would suggest these for help with your education:

Shadow Banking, Off Accounting Book Assets, Derivatives (Collateralized Debt Obligations - CDO, Comercial Morgage Backed Securities - CMBS, Mortgage Backed Securities - MBS, Interest Rate Derivatives, Credit Default Swaps - CDS), Financial Engineering.

There are others search terms, but this list will give you a head start on your research. The creation and transfer method is what has created the "Unassailable Complexity" and as a result their inability to be "Valued".

There Is More To Know Than Can Ever Be Known.

Good Luck


On Jun 10 02:13 PM greedcanbgood wrote:

> You are WAY off-base TBill. Investment banks are different than
> commercial banks. Do you have a 401(k) plan with your employer?
> I bet you've got some bank stocks in that portfolio. At the end
> of the day, the corporation exists for the benefit of its shareholders.

TARP: Bailout or Money Pit?

TARP was a scam from the get go.

The Structure as written:
Congress "Gives" the money to treasury. The Treasury then writes the rules (with the help of the Fed Board). The Treasury and The Fed Board are the oversight (of the rules they wrote). Congress gets reports, but no say so or reprisal for policy revision.

There are too many other flaws to mention without a dissertation length comment.

Now Congress is upset about how things are progressing.

To The Fools In Congress - READ THE BILLS BEFORE YOU PASS THEM - IT IS YOUR JOB !!! STOP GIVING AWAY YOUR RESPONSIBILITY !!!