Tuesday, March 24, 2009

Dr. Evil, the US Fed & the US Treasury!

In the next Austin Powers film, Dr Evil is going to have to reset his time clock to the time of the money printing US Fed.

If he intends to hold the world ransom again, he is going to have to ask for trillions, quadrillions even! Unless the US Fed, or Treasury succeed in destroying the world before the next movie is made!!

'''Non recourse loans to the Private Sector to buy Toxic Assets & claims that the Private sector is sharing risk with the American Public'''

Basically, don't take a 'fair/equal' share of the downside, but get a 'larger/equal' share in the upside, at the expense of the taxpayer!

A few weeks ago, Bernanke was unwilling to disclose names of ‘leper banks’, for he feared mass panic and stigmatization of these ‘no good banks’.

The free market capitalist philosophy of the US meant that they couldn’t just nationalize these banks! What would the Russians and the Chinese think of American Capitalism then?
What about the Middle East Investors trapped in Financial stocks?

The crucial question is – Does anyone expect these non recourse loans to be ever repaid (when the underlying asset being bought is worthless)?

The amounts of money being poured into this OTC derivative black hole keeps increasing by the day.

What’s worse is that they are going to be back in a few months time with a new plan in hand once again asking for more!!!!

Some excellent comments and analysis.
Geithner Relies on Investors for $1 Trillion Plan (Update3) - Bloomberg.com
Geithner Plan Will Rob US Taxpayers: Stiglitz
Mish’s comments
Geithner's Galling (and Dangerous) Plan For Bad Bank Assets
FED and Treasury Sticking US Taxpayer with Non Recourse Clause

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