Yahoo News: Geithner's Toxic Debt Plan So Good, Citi and BofA Can't Wait to Get Started

The looting of the federal treasury appears to be continuing unabated, despite a change in presidential administrations

On Monday, we posted a brief article reporting on Treasury Secretary Geithner's "Public Private Investment Plan," whereby the U.S. government will "partner" with private investors to buy troubled (toxic) assets from troubled banks. We had our doubts, frankly, about the viability of Geithner's plan. In our final paragraph, we posed these questions:

Will the implementation of this plan result in an Obama-Geithner triumph of public-private partnership collaboration; or will the taxpayers wind up holding the bag once again (to the tune of another $ 1 trillion or so)? If an auction of these troubled assets is actually held, will ANY bidders actually show up? Will the holders of these assets be willing to send them at auction, or will they continue to "sit" on them, as they're doing now?

Thanks to yesterday's story from Yahoo News, our answers are already rolling in. According to yesterday's story, several giant U.S. banks are already loading up the truck with these "toxic" assets, in anticipation of giant future profits:

A "funny" thing is happening just as Treasury Secretary Tim Geithner seems to have finally found a scheme to deal with banks' toxic debt: Some big banks are aggressively bidding for toxic debt in the open market.
Specifically "Citigroup and Bank of America have been aggressively scooping up those same securities in the secondary market," Mark DeCambre of The NY Post reported earlier this week. [...]
The banks contend they are helping to bring liquidity to the "frozen" mortgage-backed-securities market, as per their "marching orders" under the TARP program, DeCambre notes. [...]
A less generous interpretation is that Citi and BofA (among others, no doubt) are attempting to "front run" Geithner's program, which presumably will result in banks being able to unload these assets at prices above the current "depressed" market levels - leaving taxpayers on the hook for future losses.

Check out the full article here (includes an eye-opening video):

• Geithner's Toxic Debt Plan So Good, Citi and BofA Can't Wait to Get Started

Despite a "change" in presidential administrations, the looting of the federal treasury appears to be continuing unabated.

U.S. Taxpayers = Bagholders.