CONFLICT OF INTEREST — GOV. AND FINANCE SECTOR

Editor’s Comment: The obvious enmeshment between government and Wall Street caused by the bailout and other “deals” that were supposedly necessary to maintain our finance structure and avoid 15% unemployment leads to moral hazard in the thinking of the leaders who are in office to protect us. Like the NY Times editorial said this morning, even if it could be argued that this was once necessary, it now smells. It reminds me of the tobacco litigation and settlements. The settlements are paid from tobacco sales. SO now instead of the people being addicted to tobacco, it is the government treasurers.

As long as this incestuous financial relationship continues, the reality of the plight of our our citizens, our local and state governments and our national deficit will be ignored. And if the control of congress goes the way it looks, Republicans and Democrats are going to drive us into a ditch worse than the one they visited just a few years ago. Wall Street money is running the show. And the obvious consensus amongst bond traders is that the economy is going to tank with high inflation. They are actually paying the U.S. government for the privilege of lending it money — on the promise that the interest and principal will be paid back with dollars adjusted for inflation. Nobody would accept a negative return on an income investment unless they thought something really bad was about to happen.

by Anonymous

DyingTruth

You make a good point. The Public Private Investment Program is a joint venture between the Treasury/Federal Reserve and Distressed Debt Buyers – to remove toxic assets from financial institution balance sheets and sell to distressed debt buyers – who hope to generate a profit.

The PPIP distressed debt Fund Managers are all debt buyers.
Alliance Bernstein
Angelo Gordon
BlackRock
Invesco (WL Ross and American Home Mortgage)
Marathon Asset
Oaktree Capital
RLJ Western Asse
The TCW Group
Wellington Management Company

The program is generating profit – and IT IS NOT by making loan modifications. Clearly, the path of the toxic assets is gone from the original trust – and in the form of mezzanine and default tranches and credit swaps – now under the Legacy portfolio.

And, we will get an honest investigation by Mr. Ben Bernanke???? DO NOT THINK SO. Appears he may have condoned the foreclosure fraud practice.

Dying Truth – Really IMPORTANT POINT – if that is what you mean by “Conflict of Interest.” More need to be said about this – right now – while this in the spotlight.

Thanks.

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