This week will be the straw the finally broke the taxpayer’s back: Tim Geithners’ announcement of his horrid $1 Trillion dollar PPIF Fund; thus having a democratic administration preside over the largest transfer of wealth from the poor to the wealthy class in world history.
“Timothy Geithner is putting the finishing touches on a plan that will dump $1 trillion of toxic assets onto the US taxpayer. The plan, which goes by the opaque moniker the “Public-Private Investment Fund” (PPIF), is designed to provide lavish incentives to hedge funds and private equity firms to purchase bad assets from failing banks. It is a sweetheart deal that provides government financing and guarantees for illiquid mortgage-backed junk for which there is no active market.”
Details of the plan remain sketchy, but the PPIF will work in concert with the Fed’s new lending facility, the Term Asset-Backed Securities Loan Facility, or TALF, which will start operating in March and will provide up to $1 trillion of financing for buyers of new securities backed by credit card, auto and small-business loans. Geithner’s financial rescue “partnership” will also focus on cleaning up banks balance sheets by purging mortgage-backed securities (MBS).
In Monday’s New york Times, Paul Krugman summed up the Geithner plan like this:
“Now the administration is talking about a “public-private partnership” to buy troubled assets from the banks, with the government lending money to private investors for that purpose. This would offer investors a one-way bet: if the assets rise in price, investors win; if they fall substantially, investors walk away and leave the government holding the bag. Again, heads they win, tails we lose.
Why not just go ahead and nationalize?”Why not, indeed, except for the fact that Geithner’s and his boss’s main objective is to “keep the banks in private hands” regardless of the cost to the taxpayer.
it’s over, folks. change has NOT come to Washington.
Obama and team (Geithner, Summers, Bernanke) obviously feel rescuing the incompetent, reckless Zombie banks is way more important than helping the poor and middle class get thru this recession in one piece.
http://www.counterpunch.com/whitney02262009.html
