“This cannot be used simply to purchase toxic assets at inflated prices, thus transferring the losses to the U.S. taxpayers and acting as a back door [Troubled Asset Relief Program],” Mr. Kucinich said in a statement released by his office.
Mr. Garrett and Bachus echoed these sentiments.
So sirs, what do you intend to do about it, given that as things stand right now this certain CAN be and WILL BE used to purchase toxic assets at inflated prices and WILL result in the transfer of the losses to the US Taxpayer, acting as, indeed, a back-door “TARP”!
As I said when the “deal” was announced (in the dark of the trading night):
Cost the taxpayer an unlimited amount due to shoddy underwriting and lax (or absent) risk controls and not only do you get bailed out, you also get paid $6 million a year.
Kucinich went on to say:
“I want to determine whether Fannie and Freddie have a cohesive plan to buy up underperforming mortgages that remain on the books of the big banks, at appropriate prices, and undertake a massive reworking of the terms of the mortgages,” he said in the statement.
The banks will not sell at an “appropriate price”, just as The Fed did not buy at an “appropriate price” with its “support.”
The reason is clear: If one actually goes through those MBS and adjusts their value for the so-called “prime” loans that really were not, yet were stuffed into those securitizations, one would be forced to price them at their actual intrinsic value.
THIS WAS EXACTLY WHAT THE BANKSTERS LOBBIED TO STOP LAST SPRING. PREVENTING RECOGNITION OF THE MARKET PRICE – THAT IS, LEGALIZING OUTRIGHT ACCOUNTING FRAUD – WAS THE PRECISE INTENT OF THE SO-CALLED “MARK TO MODEL” DOG AND PONY SHOW LAST YEAR.
I will be impressed when:
“Mark to myth” is reversed and everyone has to carry their paper at its actual market value – including recognition of the detonations that have occurred in so-called “prime” loans that were in fact not prime at all, thereby damaging or even destroying the value in these so-called “MBS”.
A special prosecutor is appointed with full subpoena and grand jury power to investigate each and every party involved in stuffing ALT-A and Subprime paper into allegedly “prime” buckets of loans and then foisting them off on investors worldwide, and we start to see indictments of the perpetrators involved in this massive and pernicious fraud.
So far there is ZERO indication that either of these things is going to happen. Indeed, last spring Congress was not only complicit in but actually demanded that FASB permit the accounting fraud to occur in the first instance!
Until I see that – or articles of impeachment aimed at either Timmy or President Obama – this is nothing more than smoke, mirrors and noise.