From Calculated Risk comes news, via the WSJ that U.S. Banks are lobbying the FDIC for permission to draw on public subsidies to purchase toxic assets from their own loan books -- in other words to game the system.
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As I understand it, this would mean that banks could purchase bad loans off of their own books at full value and then receive a public subsidy for the difference between this price and what they are able to sell them for. In other words they would realize full face value on the bad loans that they made. Heads, I win, tails you lose.
Perhaps we should send some of our anti-piracy naval forces to the South Pier and have them retake Wall Street from the pirates.
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