Sunday, November 1, 2009

IBGYBG...So Let those Idiot Taxpayers Get Caught Holding the Bag

Now it's CIT's turn. Read the link and and just feel your backside get hot.

Early in the banking crisis, before we ever passed Hank's bailout bill, I wanted to see every one of those insolvent banks go broke. Into receivership. Yes and have the great depression that we all so richly deserved. Get it over with.

In fact, that is the law. Government may have broken the law by passing TARP or so we'll find out.

I remember this local brainiac telling me that the banks were going to pay back those loans. With interest. "We'll make money!" he said. Well,'s like this. It's like loaning money to a soon to be dead guy. Dead guys don't earn money nor do they pay you back. Of the famous 4 "C"s of lending, the most important "C" is capacity. And broke banks, and dead guys, are fresh out of capacity.

So we lost 2.5 billion on the CIT deal, which more than offsets the 1.5 billion we made in interest from our loans to Goldman Sachs. And Bank of America gets stiffed for 7.5 billion by CIT. Bank of America as you recall, received 45 billion from taxpayers.

And the last snippet, of our Government Nannies, comes via Naked Capitalism and goes like this:

JAMES GALBRAITH: They let all of this run, because they were getting a superficially stronger economy out of it. The ownership society, all that was a scam, basically, designed to lure people who could never afford these mortgages into accepting them. And yes, I think they, any rational person, certainly people in the industry, knew that this was not going to last. There was a little industry code, I’ve learned, IBGYBG. “I’ll be gone. You’ll be gone.”



BILL MOYERS: The industry being the securities industry?

JAMES GALBRAITH: Well, and the mortgage originators and the bankers, generally.

BILL MOYERS: But that’s criminal fraud.

JAMES GALBRAITH: Oh sure. There was a huge amount of it. The Bush administration did not actively investigate the fraud that they knew, that the FBI knew was occurring, from 2004 onward. And there will have to be full-scale investigation and cleaning up of the residue of that, before you can have, I think, a return of confidence in the financial sector. And that’s a process which needs to get underway.

*sure it will. About the same time they begin playing ice hockey in hell.

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