How the Bankers Are (Again) Screwing America
The latest in a seemingly never-ending series of examples of bankers screwing Americans, now Citibank and Bank of America are aggressively buying toxic mortgage assets in order to “game” Tim Geithner’s plan to help those very banks. Part of Timmy’s plan to help the nation’s banks purge themselves of toxic assets is to pay the banks a lot more for those assets than the market says they are worth. Of course C and BAC figured out that they could make out like bandits if they bought the securities now and then sold them back later to Geithner (aka the taxpayers) at a substantial profit. Adding to the outrage is that the banks are only able to buy these assets because of taxpayer money that they have already received. At this point we really should not blame the bankers for capitalizing on the opportunity to screw the American people twice with one move, instead we should commend them for their efficiency.
” But the banks’ purchase of so-called AAA-rated mortgage-backed securities, including some that use alt-A and option ARM as collateral, is raising eyebrows among even the most seasoned traders. Alt-A and option ARM loans have widely been seen as the next mortgage type to see increases in defaults.
One Wall Street trader told The Post that what’s been most puzzling about the purchases is how aggressive both banks have been in their buying, sometimes paying higher prices than competing bidders are willing to pay.
Recently, securities rated AAA have changed hands for roughly 30 cents on the dollar, and most of the buyers have been hedge funds acting opportunistically on a bet that prices will rise over time. However, sources said Citi and BofA have trumped those bids.”
http://www.nypost.com/seven/03252009/business/double_dippers_161157.htm
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