Skip to comments.Watchdog says overhaul didn't end future bailouts (Special Inspector General Neil Barofsky)
Posted on 01/25/2011 8:01:21 PM PST by NormsRevenge
WASHINGTON (AP) -- A government official says the financial overhaul enacted last summer won't deliver on its promise to end bailouts.
.. in a report released Tuesday that recent comments by Treasury Secretary Timothy Geithner and other top regulators suggest the government would rescue banks if one of them threatened the broader financial system.
But Barofsky notes that the bailout solidified the view among investors and bankers that the government will continue to save banks whose failures threaten to upend the financial system. The handful of largest banks got bigger during the crisis by absorbing weaker rivals. A single failure now would cause even more damage, Barofsky says.
The Obama administration touted its overhaul of financial rules as a prescription to end future financial bailouts.
(Excerpt) Read more at finance.yahoo.com ...
What about the back door bailouts?
Unlimited credit for GSEs seen as backdoor bailout
Is Fannie bailing out the banks?
And the other ways they are bailing them out?
“Because the US government is lending money to the big banks at near-zero interest rates. And the banks are then turning around and lending that money back to the US government at 3%-4% interest rates, making 3%+ on the spread. What’s more, the banks are leveraging this trade, borrowing at least $10 for every $1 of equity capital they have, to increase the size of their bets. Which means the banks can turn relatively small amounts of equity into huge profits—by borrowing from the taxpayer and then lending back to the taxpayer.”
In full http://www.zerohedge.com/article/no-big-banks-have-not-paid-back-government-bailouts-and-subsidies?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+zerohedge/feed+(zero+hedge+-+on+a+long
Fed slashes key rate to near zero
Where is the Money?
Eye on the Bailout
DUH, I remember at the time that the financial regulation pushed through both made it possible to have bailouts without a Congressional vote, and made them up to the people giving them the loans....the FEDERAL RESERVE.
Still spreading this silly claim? Anyone who thinks it's a good idea to borrow overnight at 0.75% and buy a 10 year Treasury probably shouldn't be giving investing advice to the public.
And another thing, banks are only borrowing $47 million from the Discount window right now. Maybe 0.75% isn't an attractive rate for banks when they can borrow overnight from each other at 0.25%.
OK Timmy :) secrets out wall street hustler
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