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Bailout bonds

Mon, 04/13/2009 - 9:58am — lambert

One more post -- I heard this one when I briefly turned on "All Things Considered" a few days ago. Put down your coffee:

As part of its sweeping plan to purge banks of troublesome assets, the Obama administration is encouraging several large investment companies to create the financial-crisis equivalent of war bonds: bailout funds.

The idea is that these investments, akin to mutual funds that buy stocks and bonds, would give ordinary Americans a chance to profit from the bailouts that are being financed by their tax dollars.

Such a deal. I'm being offered the opportunity to purchase what I already own -- or should if the administration hadn't decided to throw trillions of my money at the existing bankster management that created the problem, instead of firing them all and nationalizing the institutions.

And the beauty part?

They're not only trying to sell us what we already own, they're going to charge us a management fee for doing it. Truly, we are ruled by the best and the brightest.

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Thanks for the coffee warning, but...

By vastleft on Mon, 04/13/2009 - 11:30am

...you should have also suggested I move my keyboard away from where my head would shatter it.

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Numerian posts that the last equity to be mined, pillaged, is

By jawbone on Mon, 04/13/2009 - 1:20pm

the taxpayer, and the Big Bankster Boiz are moving right ahead on that job of hollowing out the equity of the nation for their personal wealth.

He writes a comprehensive chronology of how Big Finance has been "eating the seed corn."

Eating our Seed Corn: How the Financial Industry Managed to Extract Equity from Just About Everybody

One of the great illusions of late 20th century finance was that banks were profitable. On paper - investment, commercial and mortgage banks appeared extremely profitable. The percentage of total S&P 500 profits that was attributable to financial companies rose steadily from 1980 to 2000, and by 2007 reached 40%, depending on how you measured it. This meant that two out of every five dollars of profit generated by America’s 500 largest companies came from the financial function. This, by the way, understated things, since it left out the quasi-banks like General Electric and GMAC.

The illusion comes from the fact that this paper profit was not the result of selling products that allowed businesses and consumers to be more productive and more profitable in their own right. What was really happening was that financial firms were extracting equity that had been built up over nearly a century by businesses and consumers. The financial business had become a predatory business, scavenging the land for pockets of wealth to convert into cash that would be funneled in part to the banks as fees.

(Via commenter biklett at Moon of AL)

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Catherine Austin Fitts calls our economy the Tapeworm Economy

By jawbone on Mon, 04/13/2009 - 7:27pm

From commenter Epok:"...the Tape Worm Economy. A tape worm has the ability to make the host hungry for what is best for it [the tapeworm]."

Quite a...horrifying, sickening image, no? Just might catch on--it's Insiders getting us to to continually feed them. Yucky.

Her blog.

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Fitts is interesting, indeed

By lambert on Mon, 04/13/2009 - 8:26pm

Poke around for the lollipop test, though. Good tool.

And see Financial coup d'etat here.

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"First they ignore you, then they ridicule you, then they fight you, then you win." -- Mahatma Gandhi

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