“While SIGTARP offers no opinion on the appropriateness or accuracy of the valuation contained in the Retrospective, we believe that the Retrospective fails to meet basic transparency standards by failing to disclose: (1) that the new lower estimate followed a change in the methodology that Treasury had previously used to calculate expected losses on its AIG investment; and (2) that Treasury would be required by its auditors to use the older, and presumably less favorable, methodology in the official audited financial statements.“
Oh really Turbo? Let me put this one in English for you.
In the civilian world it is illegal to present one set of books to your investors, and another to the IRS. That’s called tax fraud and, if you’re a publicly-traded company, securities fraud. It exposes you to a nice date with Bubba at the Graybar Motel, and it should.
But government does this sort of thing all the time. It also allows firms it controls to do this. Remember the infamous “GM” claims that “it had paid back all of the taxpayer money”? Well sure, technically – but they did so by borrowing other money – from the taxpayers! Only in Government is taking a $20 from your left pocket and putting it in your right pocket “paying off a loan.”
In the rest of the world we call this what it is: A scam.
Then there’s the view on HAMP. Treasury argues that every single modification (including trials) is a success, making the claim that “every single person who is in a temporary modification is getting a significant benefit.”
This is a bald lie. For those who are in temporary modifications but either fall out of the program or fail to qualify for permanent reductions, for any reason whatsoever, the entire amount they do not pay during the modification period is then past-due and payable, and worse, subject to late fees and charges.
In states and/or circumstances where there is a possibility of deficiency judgments delaying the inevitable loss of the home means that the homeowner will be exposed to a larger deficiency judgment than would otherwise be the case. This is not a benefit, it is a government-operated scam.
Barofsky makes his case well in these 300+ pages, and while the detail-level material is good reading, it is dry. The point – and the take-away – is that Treasury, contrary to their claims, has become part of the financial system asset-stripping schemes of Wall Street, and is now actively helping the banks screw the American people.
If Geithner had any sense of honor, he would commit Seppuku. If Obama had any sense of propriety or concern for the American People, he would fire Geithner this morning.
Clearly, neither is the case.