PPIP? PPPlease

"It's pathetic that the real reporting has been left to a music magazine and some independent bloggers."
Matt Taibbi

Now, The BBB wasn't mentioned specifically, but I'm sure Matt had us in mind when interviewed post expose on GS in Rolling Stone entitled, "The Great American Bubble Machine." He basically blames GS for the creation and destruction of every bubble going back to the 30s and points to political influence all the way up to Obama. This story is becoming old news so I won't rehash more quotes, but interesting that GS was also involved in another big story this week, one of possible "secret formula" theft by a leaving employee.

"The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways,” Mr. Facciponti said in the court, according to Bloomberg. “The copy in Germany is still out there, and we at this time do not know who else has access to it.”


This is what GS' lawyer had to say concerning Sergey Aleynikov, who supposedly uploaded GS' proprietary formula for evaluating trades in microseconds to ensure huge profits. But doesn't this quote beg a simple question from the judge? If others could use this formula to manipulate the markets, isn't this what you are already doing, GS? Not much of a stretch I think, but it would be fascinating if someone else was able to use it to steer the market in the same way GS appears to in the last 20 minutes of daily trading. By the way, have we received an explanation as to why trading was extended 15 minutes durin a session last week ?


Now to the title. Remember when the bailout money was supposed to relieve the banks of all their toxic assets, then a week later it was decided no, that's no good, let's just give the money to the banks. Then remember this PPIP thing, where we were going to let private equity leverage loans at 10-1 with explicit caps on losses, to buy up to a trillion dollars in toxic assets and that this would save our financial system? Well, turns out PPIP isn't quite going that far. Try 4% of that original figure, $40 billion. $40 billion, does that help anything? Does anyone else feel like Geithner Paulsoned us with this doomsday scenario at taxpayer liability to go along with this BS?


Elizabeth Warren of the Congressional oversight committee reiterated today that banks are paying back warrants at 66% of face value and continue to push to pay even less. At least someone is pushing our interests, even if their advice goes unheeded.


And last, congratulations to Anon on his new baby boy!


http://www.rollingstone.com/politics/story/28816321/the_great_american_bubble_machine

http://www.nytimes.com/2009/07/07/business/07goldman.html