Wall Street’s 1929 Scams Return in Geithner Plan

[Fireweed247]

Now, House Speaker Nancy Pelosi says she will push for the deepest congressional inquiry into Wall Street’s abuses since the 1930s, using Pecora’s investigation as a model. Before Congress proceeds, though, there’s one thing its members should do: Read the Pecora Commission’s 1934 report.

Some of the abusive practices Pecora chronicled are similar to the machinations at the heart of the Treasury Department’s plan to revive the nation’s hobbled financial-services industry...

One example from the report: Say a bank and a private- equity firm both agree that a group of the bank’s loans is worth $600 million. The private-equity firm, however, agrees to overpay for the loans and bid $840 million at auction. The private-equity firm invests $60 million, which the government matches with $60 million of TARP money, and which is leveraged by a $720 million loan guaranteed by the Federal Deposit Insurance Corp.

After the auction, the bank secretly pays the investor a $120 million kickback, or half the difference between the auction price and the real value. Even if the private-equity firm’s $60 million investment is wiped out, it still would get a $60 million profit because of the kickback. Meanwhile, the bank would make a $120 million profit, at taxpayer expense. ...

more
http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_weil&sid=a1REWwf8EPxI

[leftofthedial]

1. Geithner needs to go.

He's a crook.

[Fireweed247]

4. yes- the fox is guarding the hen house

we need to watch these congressional inquiries very closely....

[SammyWinstonJack]

9. Who put him in charge of the hen house? And why is that okay with some here?

:shrug:

[Fireweed247]

11. Obama and good question

I don't think I like this game of chess.

[midnight]

2. Brilliant graphic.

[Fireweed247]

3. my son made it

please comment here- I'm trying to encourage him to keep at it...
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x5525453

[Fire1]

5. SOS, different day. Pitiful.

[Fireweed247]

8. amazing they keep getting away with it

:grr:

[brentspeak]

6. Is that Neil Cash n' Carry in the bulldozer?

[Fireweed247]

7. exactly

:rofl:

[leftstreet]

10. K&R

That article explains it very well.

Thanks for posting

[Fireweed247]

12. kick

:kick:

[Orwellian_Ghost]

13. Bumping