The seemingly criminal Sheila Bair*
I am not opposed to the Geithner Plan – but the execution is bordering on criminal. This article in the FT runs as follows:
Bailed-out banks eye toxic asset buys
By Francesco Guerrera in New York and Krishna Guha in Washington
Published: April 2 2009 23:20 | Last updated: April 2 2009 23:57
US banks that have received government aid, including Citigroup, Goldman Sachs, Morgan Stanley and JPMorgan Chase, are considering buying toxic assets to be sold by rivals under the Treasury’s $1,000bn (£680bn) plan to revive the financial system.
The plans proved controversial, with critics charging that the government’s public-private partnership - which provide generous loans to investors - are intended to help banks sell, rather than acquire, troubled securities and loans.
Spencer Bachus, the top Republican on the House financial services committee, vowed after being told of the plans by the FT to introduce legislation to stop financial institutions ”gaming the system to reap taxpayer-subsidised windfalls”.
It is so blatantly obvious that the people that should not participate as buyers in the Geithner funds are the conflicted. This was first pointed out by Steve Waldman – but I thought his dark thoughts were too dark. However Clusterstock argues that Sheila Bair is seemingly oblivious to the corruption possibilities.
She isn't seemingly oblivious. She is totally captured by JPM and Citi.
After all WaMu was gifted to JP Morgan in a reckless and irresponsible manner and she attempted to gift Wachovia to Citigroup. It should not surprise me that Sheila Bair continues to act as if she is on the take. That represents no change in behaviour.
Recommendation: Indict Sheila Bair if she won't resign. Indict her now.
*Note - I have always believed that Sheila Bair is either incompetent or corrupt. She seems to be corrupt - but incomeptence in her case is probably a sound defence. She should resign before she is (perhaps mistakenly) indicted for corruption.