Casey Research study: Bailouts for failed banks already a failureMortgagePress.comCasey Research, bailouts, IndyBank, Citigroup
Casey Research has released a report with disturbing findings
about the federal government's vast and unprecedented activities in
bailing out troubled commercial banks like IndyBank and Citigroup.
Their findings appear in the latest issue of The Casey
Report, the flagship publication of Casey Research. The report
can be viewed
here.
"Over the past four months, American commercial banks have
received massive amounts of bailout money, ostensibly to unfreeze
the credit market and enable the banks to lend again," write Bud
Conrad and Doug Hornig, Casey Research analysts. "The banks' cash
assets rose by more than a half-trillion dollars. That is primarily
taxpayers' money. But it did not serve a useful purpose. In
reality, we got scammed."
"The Treasury borrowed taxpayer dollars via the sale of Treasury
notes and deposited the cash at the Federal Reserve. The Fed used
the money to relieve banks of their most toxic liabilities. But
instead of lending it, the banks simply bought more Treasury notes,
thereby polishing up their balance sheets. The net result is that
the Treasury incurred more debt. The Fed absorbed all manner of bad
debts for which it may not get ten cents on the dollar and the
banks ended up with more money and less debt."
The Treasury Department bilked U.S. taxpayers for $3 trillion in
three months.
"The consequences are dire. Responses of gargantuan size have
merely served to keep the system from collapsing and have barely
begun to improve it. Thus, the situation is not yet stabilized.
There will be new surprise problems, and bigger responses, for the
foreseeable future. Of that we can be certain. And collectively,
all the government's responses will inevitably have a negative
effect on the value of the U.S. dollar," said Mr. Conrad and Mr.
Hornig.
For more information, visit www.caseyresearch.com.
