Bailed-out banks may buy toxic assets

[marketcrazy1]

(Reuters) - U.S. banks that have received government aid, including Citigroup Inc, Goldman Sachs, Morgan Stanley and JPMorgan Chase & Co, are considering buying toxic assets to be sold by rivals under the Treasury's $1,000 billion plan to revive the financial system, the Financial Times said.

Citigroup was considering whether to take part in the plan as a seller, buyer or manager of the assets, but no decision had yet been taken, the paper said, citing people close to the company.

Goldman and Morgan Stanley have pledged to increase investments in distressed assets, the paper said.

This week, John Mack, Morgan Stanley's chief executive, told staff the bank was considering how to become "one of the firms that can buy these assets and package them where your clients will have access to them," according to the paper.

Spencer Bachus, the top Republican on the House financial services committee, told the paper that he would introduce legislation to stop financial institutions "gaming the system to reap taxpayer-subsidized windfalls."

Bachus added it would mark "a new level of absurdity" if financial institutions were "colluding to swap assets at inflated prices using taxpayers' dollars," according to the paper. http://www.reuters.com/article/newsOne/idUSTRE5320OK20090403

[dipsydoodle]

1. What they gonna do

buy their own toxic assets and gain some tax advantage or other ? :shrug:

[ixion]

3. They're going to buy each other's crappy assets to falsely inflate their value, and then

stick us with the bill.

Ain't life grand? :sarcasm:

[dipsydoodle]

5. You couldn't make this shit up.

It defies belief.x(

[soothsayer]

6. I heard they were already gaming the system this way.

[marketcrazy1]

4. YES they want to use the the government

public private investment plan to buy their own toxic assets FROM EACH OTHER!! useing "loans" and leverage from the government. this is outrageous!. not only will they pay inflated prices for each others crap, they will stick the taxpayers for ALL the losses!! and the government is OK with this "plan"............... sickening!!!!!

[kentuck]

2. Same thing they did during the S & L crisis...

It's a scam.

[soothsayer]

7. for god's sake just let US buy the toxic assets. I'd like to make a fortune when it recovers

as we all know it will. Give ME a shot.

I feel like taking my money out of the bank just to deprive THEM of the money to buy this stuff (since they can pretend they have 9x or more of the money I put in, for lending purposes or whatever)