NO!!!!!!!!!!!!

This is unbelievable.

In the wake of changes by the FSAB yesterday, relaxing mark to market accounting requirements, and following efforts by the U.S. Fed to entice investors to purchase toxic (though now less so) assets, the Financial Times reports today that many U.S. banks are poised to use public subsidies to purchase these suddenly less toxic assets from their rivals. This did not go unnoticed by legislators:

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”.

Mr Bachus added it would mark ”a new level of absurdity” if financial institutions were ”colluding to swap assets at inflated prices using taxpayers’ dollars.”

This, of course, beggars the imagination. The AIG bonuses had terrible optics, but ultimately were of little consequence. This is simply a shameless raid on the public treasury by the same folks who brought you the financial meltdown.