Perfect Stupidity Storm Forming Over Financial System Today!

What a day this is going to be!  We have;

1. Day two of the greatest "he said-he said" since Larry Birkhead and Howard K. Stern staged their epic battle for fatherhood of Anna Nicole Smith's baby daughter!  Our dear friend Rita Cosby chronicled this duel in her best selling book, "Blonde Ambition".  We may ask her to take on the epic Ken Lewis- Hank Paulson- Ben Bernanke saga next!  BofA CEO Kenny Lewis claimed to New York Attorney General Andrew Cuomo that Hank Paulson (then Secretary of the Treasury) threatened his job if he didn't take Merrill Lynch back in December 2008, after Lewis got a early Christmas present from "The John Thain Gang " in the form of a surprise $15 billion loss.  Lewis claims that it was Paulson who "encouraged" him not to disclose these losses to BofA shareholders until after the deal was done.  Meanwhile, Paulson at first told A.G. Cuomo, according to Cuomo, that HE was pressured to do this by Federal Reserve Chairman Ben Bernanke.  Ben Bernanke denied this and Hank immediately recanted.  Chairman Bernanke did not give deposition to the A.G. citing "bank examiner privilege"!  This is amazing.  Firstly, any process that makes Andrew Cuomo look like the "White Knight" is pretty damn heinous!  Secondly, as a perfect lead in to item number two, why would ANYONE trust ANYTHING the government tells us while watching this sh*tastrophe??
2. Today the government will get its first indication of who wants to play ball in Timmy's legacy asset flea market!  Check this out:  Investors are actually afraid to play ball with the government because, paranoid as it sounds, they are worried the government might change the rules on them midstream!  I can't imagine where they got that idea...do you?  Get this, after allowing our financial institutions to mark to model, many institutions may not participate in the cleansing.  Who knew?  Let a guy mark a bond worth 40-00 to 90-00 and then he won't sell it at 75-00?  Crazy.  Additionally, Citigroup says they won't participate, which considering the FDIC has already wrapped $300 billion of their garbage, makes sense.  They've already been cleansed and all it cost them was some preferred stock that they got to convert to common.  Meanwhile, Morgan Stanley says they WILL participate.  They want to buy stuff!  Awesome.  A company that was given a bank charter, had all their new debt guaranteed by the FDIC and got $10 billion in TARP capital wants to sell their assets at the governments pumped up price, THEN buy another bank's assets with the government's generous financing and put option on the asset!  I just wish Timmy would take one of us aside and say, "Look dude, I know it's nuts, I'm not stupid, just corrupt."  That would make me feel a little better.
3. The "Stress Tests" start getting released to the "Gang of 19" today!  This is easy for me because Mark Gilbert at Bloomberg wrote a great piece  Stress Test Scores 'C' If Name Ends in 'itigroup'  Very funny, check it out.
4. Finally there is this also from Bloomberg Bear Stearns, AIG Dumped $74 Billion in Subprime CDOs on Fed.  Ahh yes, Maiden Lane I II & III.  This is the financial markets equivalent to "Area 51" (where we keep all the UFOs and the identitity of the guys who bought the March 30-00 puts on Bear Stearns in March 2008 when the stock was trading at 70-00).  The Fed says they are only down $9.6 billion.  Hah!  Dream on.  The Fed said they are using mathematical models to value the assets.  The guys who don't want to participate in Timmy's plan should call the Fed's model for a better bid!  The article also points out that the Fed has lent about $2 trillion to banks, taking many of the financial creatures as collateral.  I'm sure they took the proper haircut.  Whatever the case, since the Fed isn't allowed to take a loss, we do.

Strap in and don't forget to put on your "I'm With Stupid" shirts on!  

Comments

[.]

@RPB: That's what I keep thinking. We've seen this level of financial corruption at the top before, but not for 170 years...

[eric]

GangBang!

[RPB]

Let's just go ahead and merge these PPIP, TALF, TARP, Maiden Lane Gangbang, etc banks together and just call them Third Bank of the United States? Seriously, at this point, why not?

I cannot wait to see all the pet projects the administration and congress will ram through these banks. Cheap funding for greens, cheap access to plentiful and never ending credit; anything to keep the inflationary sham going for the voters who still want to live in la-la land.

[nah]

FIRST POST

http://www.youtube.com/watch?v=nGUzxMYxkGc