Sunday, September 21, 2008

Resolution Trust - Mother Of All Scams

In what is both the single most socialist move ever made by the US government, and the biggest robbery of US taxpayer since the creation of the union, the Fed and the Treasury have quickly realized who pays the government and acted quickly to ensure the survival of all the crooks on Wall Street. If anyone was at all confused about the puppet and master relationship between big business and DC, this shocking slight of hand should leave no doubt whatsoever who’s in control.

As my good friends at the Housing Timebomb pointed out, the last time this amazing scam was pulled off was during the savings and loans crisis, and the RTC cost the taxpayer $124.6 billion, or roughly $400 for every person living in the US of A. But this meltdown makes the S&L blip look like the boom era, since we’re already over $10 trillion in the hole, and that’s just the tip of the iceberg.

What in holy hell is an RTC?

Good question. Here to explain exactly how this awesomely-constructed scam works is sparrowshead with his mad clip art skillz:

  1. So all the banks and big companies that lost money can take all their CDOs, CDSs, subprime stuff and every other shitty investment that backfired, and stuff them into a big trash can euphemistally called a Resolution Trust Corporation. This has two huge advantages - it legally protects them from debt repayment problems and other subtle bankruptcy problems, and it shores up their balance sheets and immediately enables their share price to skyrocket now the debt has gone bye-bye.
  2. Immediately, previously-insolvent investment banks can now go and borrow money and act like this whole business was just a meaningless, forgetful night of snorting coke from a hooker’s ass.
  3. Now the RTC has to be supported by Uncle Sam, who basically has to put the infrastructure budget for - well - pretty much everything on hold and start printing money 24/7.
  4. The great American taxpayer gets left by massive T-bill repayments together with a multi-trillion debt that will take generations to pay off, and the people in investment banks can start buying Ferraris, golf courses and private jets.

Now if I could use an RTC, I’d be happy.

Just to emphasize how glorious this scheme really is, think about it as if an RTC existed for your family. Here’s how it would work for mine:

  1. I dump all my credit card debt, mortgages, car loans, college loans and every other damned rope around my neck and stick it in the RTC.
  2. I go and get new credit cards and start all over again.
  3. My neighbors figure out how to pay off the RTC while I can’t decide on the trim for my new Mercedes.

Moral Hazard

You’ll hear the following phrase repeatedly over the next few weeks from politicians, the Fed, the Treasury and every other scumbag out there: “We had no choice“. Bailout Bernanke has hit the motherload with this one, creating the largest taxpayer liability in the history of the planet. A few years ago, when we worried about our tiny national debt and how it affected the future economic health of the US, nobody would have even conceived of such an unethical, impracticable, socialist, dumb and downright criminal idea, that made that national debt look like an average-sized bar tab.

The frauds involved with the biggest economic con in history have gotten away with it. They have escaped the bankruptcy they created by pumping trillions onto subprime borrowers who were too stupid to realize what they doing, and who trusted lenders whose only motivation was to get them more in debt. The government has simply written a check to these guys to cover their losses so they can start all over again.

Did you vote for this? Were you asked your opinion? Who the fuck hired Bernanke? Who knows, but you were just given the biggest bill you’re ever likely to see in your lifetime. And did I mention that a substantial amount of that money is going to foreign investors who lost money on the subprime scam? Economically, the USA will never recover from this.

Source - Subprime Showtime


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