Thursday, March 26, 2009

Bad Faith Squared

Jane Hamsher at Firedoglake has the whole deal but if what she is saying is true then Citigroup and BofA have reached the bottom of the sleaze barrel and have punched through the bottom.

As Yves Smith and other predicted, BofA and Citigroup have already begun gaming Tim Geithner's private-public partnership plan (the Public/Private Investment Partnership, or PPIP). Remember our old pal Stanford Kurland, who milked Countrywide for $200 million, and is now financed by Blackrock to buy up toxic mortgages at thirty cents on the dollar? The New York Post says companies like his are being outbid -- by BofA and Citigroup.

Now remember, TARP money was supposed to "unfreeze" the credit market and be used for lending. And the PPiP plan was supposed to get the toxic assets off the balance sheets of the "too big to fail" banks, at prices of .50 to .60 on the dollar, because the banks didn't want to take the hit of selling them at what they are actually worth. But instead, BofA and Citi took the TARP money and bought more toxic assets:

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