Sunday, August 21, 2011

Large Fed Bailout Sums Confirmed Three Years Late

It took three years to get the Fed to cough up the numbers.  Bloomberg News conducted the legal equivalent of a scorched-earth campaign to confirm the $1.2T our government handed to Wall Street's big shots.  The term "aristocrats" is not hyperbole.  It describes an elite class that no longer sees itself subject to the rule of law in a democratic society.  The American aristocrats are no different from their European cousins, who also benefited from bailouts for the banks they have controlled for generations.

The Fed's claims of "no credit losses" are funny.  I guess such a claim is technically true if the junk mortgages the Fed took onto its balance sheet can't be written down thanks to favorable accounting rule changes.  The bailouts have not purchased any solid improvements in U.S. banks' financial performance. Bank of America is a joke, losing money like crazy.  The rest of the banking sector only looks healthy as long as they can pretend their bad mortgage loans will someday recover cash flows. 

Nota bene:  No positions in any U.S. banks at this time.