Bailed out because of toxic assets, banks think about buying even more -- with your money
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Now that they're propped up by public money, they can swallow the poison, and the taxpayers will feel the pain.
The Financial Times (U.K.) reports today in "Bailed-out banks eye toxic asset buys":
The plans proved controversial, with critics charging that the government's public-private partnership — which provide generous loans to investors — are intended to help banks sell, rather than acquire, troubled securities and loans.
The FT then told Spencer Bachus, the ranking Republican on the House Financial Services Committee, and he's quoted as vowing to stop the banks from "gaming the system to reap taxpayer-subsidized windfalls."
Oh, but it makes perfect sense on Wall Street — it's just another new way to swap dubious securities:
But public opinion may not tolerate the idea of banks selling each other their bad assets. Critics say that would leave the same amount of toxic assets in the system as before, but with the government now liable for most of the losses through its provision of non-recourse loans.
