Information Update 6: Just Say No to Buying Toxic Waste

# 006 March 24, 2009

Last year, AIG gave major donations to several of the politicians currently “overseeing” it’s restructure:

President Obama ‘s campaign received over $104,000
Senator Dodd (see Information Update 004) received over $103,000.

Where is the outrage? Where is the Congressional bill committee that is working feverishly to require President Obama, Senator Dodd and the others to return this money or pay confiscatory tax rates ex post facto on the money?

I look at it this way, at least the AIG employees worked for their bonus… campaign contributions are given in anticipation of future benefits… and benefit they have! A Rasmussen poll revealed that two thirds of Americans believe that “politicians who received campaign contributions from AIG should return the money.” Right…

How is it that our politicians in Washington can lie, cheat, steal, commit immoral acts and keep their job? I’m just asking…

How is it that Washington and the Fed can come up with a plan to sell the public “toxic” assets… excuse me, doesn’t toxic mean “deadly, lethal, noxious”? Let’s be realistic. If the banks could sell these assets… wouldn’t they already have done so?

Houses are selling again, up 5% last month. Of course what is not being touted is that these are sales of “existing” homes at a price far below their market value or even the loan amount of two to three years ago. There are still plenty of investors out there with money to spend or with the borrowing power to buy good deals.

If these banks cannot sell these “toxic” assets now, why in the world should we believe that a “public/private” partnership will make them more sellable? Here is how… the banks will be getting off the hook 100% and the investors will be insured against loss!

Here’s how it works: the FDIC will guarantee packages of loans sold by the banks to investors. These investors will be loaned the money to buy the “assets” by, you guessed it, the Federal Government. The investors will be able to borrow up to 50% of their investment money by the U.S. Treasury. If something goes wrong, the financing is guaranteed by the FDIC. Private sector “partners” will manage the assets. Once the assets have been sold in “packages”, private sector “managers” will control and manage the assets until final liquidation.

Can anyone say “management fees”, probably in the billions? Can anyone guess who these “private sector partners” and “private sector managers” might be? My guess, Goldman Sachs, et al… amazing how that works.

Oh yes, and don’t forget the major bond rating companies… you know the ones that failed to catch on to these “toxic” assets before they went toxic? They will also make millions (maybe billions) rating these new products.

In all honesty, I can’t see how these new products differ from the old “Alt A” and Sub Prime” products… other than the fact that they will be guaranteed by the full faith and credit of the USG… Let’s follow the money… who do you think is going to reap the financial windfall in this one?

I thought you might just want to know!

With regards,
Allen

Information contained herein is deemed reliable but not guaranteed.
http://VoiceCafe.blogspot.com