Seriously?

What a great 8 or 9 months we have had. At the end of last year we realized that the banks had a ton of unsalable, un-priceable, derivative "TOXIC" assets. They had all of these securities and credit default swaps which were ultimately tied to real estate but were such a web of sales, re-sales and "bundles" that they could not be unwound. Fortunately the Bush administration set up a 700 million dollar TARP fund to buy these assets from the banks and make them healthy again. And boy did it work. The TARP fund bought all those assets, the banks took their losses and are no longer gambling our money in ways that they and no one else understand. They have also reigned in their compensation systems so that their people are not compensated for taking insane risks with our money based on short term production. It was brilliant and without Obama's follow through on the system it never would have worked. It has been a great example of public and private addressing and correcting a problem for the good of the public and for their shareholders and clients.

Accept of course that is not what happened. Not at all. Because they could not agree on price the TARP funds never bought the toxic assets. They are still owned by the banks although some small market has begun to spring up for them. More importantly through the wizardry of accounting we changed the rules so that the bank did not have to list those assets on their balance sheets at "market" price (what they could sell them for) but instead are able to list them for their purchase cost...or their "appraised" value or...well, for whatever they want.

This allowed them to be pronounced "healthy" and pass their stress tests to that now they could repay their TARP loans, which were made to them to strengthen their formerly weak balance sheets. Once the accounting rules were changed, the Tarp money re-payed, and them pronounced rehabilitated, they were now free to go back to their old ways which they have done with a vengeance. This had led them to have their lobbyists rail against "socialism" and the auto bailouts and more importantly totally stop the regulation of the derivative and hedge fund industry. Even better they have resumed massive bonuses again to the traders who helped get us here in the first place because they cannot afford to lose all that talent.

"There are foxes in the hen house,
the cows are in the corn".-Steve Earle

How could we let these guys fall right back into place?

How could we let an industry which dragged and with money drugged us in a fever of greed to the brink and beyond with no one punished, admonished or even better regulated. When there was a run on there stock and deposits the government steps up but with a wave of the accounting rules, loans are repaid, and bonuses made. And lets be clear, none of the banks problems have been solved or even changed. They still own those toxic assets. The mortgage loan situation has not improved. The commercial loan domino is starting to fall and the credit card defaults are next. When these institutions fail the next time we should take every one of them and move them all into one of the empty extreme suburb planned communities that lay vacant since their planned funding fell through. They could grow their own food but you know they would screw that up to. They would leverage the projected profits from their fields and hedge against no rain and in the mean time forget to grow anything. We have lost site of so much. In the mean time these guys are dong it again.

The cows are in the corn? I don't think so. I think the pigs are in the corn.