Banking Crisis: Money-Spinning Scam for the Financial Giants

Bernanke: Looking at Goldman Sachs Role in Greece

February 25, 2010

Reuters - The Federal Reserve is examining the role that Wall Street firms including Goldman Sachs played in helping Greece arrange credit default swaps, Fed Chairman Ben Bernanke said on Thursday.

"We are looking into a number of questions related to Goldman Sachs and other companies in their derivatives arrangements with Greece," Bernanke said in response to a question for Senate banking Committee Chairman Chris Dodd.

Bernanke said the Securities and Exchange Commission was also "interested" in the issue and added:

"Obviously, using these instruments in a way that potentially destabilizes a company or a country is counterproductive."

The Great Highway Robbery Continues: How The FDIC Is Legally Transferring Billions In Taxpayer Money To Hedge Funds

February 10, 2010

Zero Hedge - It is not a secret to anyone who has been closely following the FDIC's quasi criminal bank takeover practices over the past year, that acquirors of failed banks end up receiving a massive and risk-free gift in the form of taxpayer benefits via the FDIC when it comes to funding losses on a given bank acquisition.

Should there be a short sale resulting in a loss to the full principal (not the cost basis mind you)? Not to worry, Sheila Bair is there to hand out taxpayer money to the hedge funds/banks owning the newly transferred assets.

A recent example of this was the glaring insider trading which preceded the acquisition of failed AmTrust Bank by New York Community Bancorp, in which both NYB and those who bought calls in advance of information being made public, made massive illegal profits.

And as the SEC continues to pretend like this episode never happened, we remind the intellectually subprime Mary Schapiro to finally pursue those involved, and will continue doing so for as long as it takes.

But back to the FDIC: the folks at Think Big Work Small have compiled a terrific video detailing exactly how several hedge funds, currently owners of recently created shell holding company OneWest Bank, are picking apart the carcass of failed IndyMac, all the while encouraging short sales (instead of loan mods) as only that way do they get to benefit fully from the taxpayer funded FDIC loss-share arrangements which makes the IndyMac transaction an immediate slam dunk for everyone involved...except America's taxpayers, and the FDIC's ever depleting DIF reserve.

As the authors appropriately title the video, this is indeed a slap in our face. And this goes on every single bailout Friday when the FDIC continues handing out billions of dollars under the guise of "loss sharing" arrangements, which is simply a guaranteed profit from the acquirors' cost basis to 90% of the original loan value: an instantaneous 30% risk free IRR.

Full must watch video.