Why are the Banks showing a profit? Answer; AIG and your money

[edhopper]

From Barry Ritholtz:
http://www.ritholtz.com/blog/2009/04/fingering-aig/#comment-163196

"As Zero Hedge explains, AIG, desperate to hit up the Treasury for more moola, decided to throw in the towel and unwind its considerable portfolio of default-credit protection. In the process, the badly impaired insurer, unwittingly or not, “gifted the major bank counterparties with trades which were egregiously profitable to the banks.” This would largely explain, according to Zero Hedge, why a number of major banks actually, as they claimed, were profitable in January and February. But the profits, it is quick to point out, are of the one-shot variety, and, ultimately, they entailed a transfer of money from taxpayers to banks, with AIG acting as intermediary."

So tell me again why nationalization is too expensive?

[CoffeeCat]

1. Ok...I'm not a genius, and I suspected this...

It did not make sense to me that these banks would be profitable--because banks haven't loosened up lending and also
consumers and small businesses are not taking on extra debt during these tough economic times.

It just didn't make sense that "record profits" were attained during these economic times.

Ok, now that we know that all of the good news coming from the banks was a big, fat, collective lie---I'm curious about
something...

Everyone in the loop understands damn well that this was a lie. They're trying to bamboozle us into thinking that "Happy
Days Are Here Again." During the past two weeks, we've seen silver-lining marketing coming out of the media--and it
was all based on the good news from these banks. You would have thought that the recession was over! That's how this
positive bank information was positioned--as firm evidence of a recovery.

When Wells Fargo announced $3 billion profits, the market went up 300 points that day and the rest of the financial
sector followed.

Just what in the hell is going on? That is a big question that really needs to be answered. EVeryone in the know
understands that the banks are insolvent. Why are they lying and covering it up????

And how long can this shell game continue? AIG and the American taxpayer can't help these banks with their smoke-and-mirrors
forever!

[edhopper]

2. My cynical answer

is that Geithner and Summers do not want their friends on Wall Street to go down and they have convinced Obama that this is the right course.

[JackRiddler]

3. The fault lies with all of us - people, corporate media, government...

for entertaining the farce, even for a moment, that a bank that

a) gets 50 billion CASH from the taxpayers (as Citi just did, to take only the second or third most-egregious example)

and

b) is allowed to price its assets however the fuck it pleases (thanks to capitalism's titanically historic rejection of free market pricing last month, which went almost unremarked)

is then -- to add bitter insult to injury -- further allowed to pretend that it made a "profit" last quarter.

And then this gets reported as though it's so.

And then 100,000 people DON'T march to that bank's HQ or the Federal Reserve or the Treasury Department and shut the pirates down (or at least shut down their offices for a day).

No. There will even be remarks that recovery is on the way!

Meanwhile, that the teabaggers get ANY one to their moronic farce of a non-demonstration...

Fuck it.

Nam myo ho renge kyo... Nam myo ho renge kyo... Nam myo ho renge kyo... Nam myo ho renge kyo... Nam myo ho renge kyo... Nam myo ho renge kyo... Nam myo ho renge kyo... Nam myo ho renge kyo... Nam myo ho renge kyo... Nam myo ho renge kyo... Nam myo ho renge kyo... Nam myo ho renge kyo... Nam myo ho renge kyo... Nam myo ho renge kyo... Nam myo ho renge kyo...

[marmar]

4. Robbing Ponzi to pay Pyramid.......

n/t

[CoffeeCat]

6. Ok, that's hilarious...

...one of the best lines on DU EVER!

Hilarious, and sad---but hilarious nonetheless.

:rofl: and :cry:

[girl gone mad]

5. Barofsky is investigating this, btw..

[bvar22]

7. All Ponzi Scams look great....

...as long as the suckers pour in new money.
In this case, it was your children's future the administration poured in.