PPIP: Yet another theft of taxpayer funds.

Yet another of the myriad of programs designed to transfer trillions of dollars of bank losses onto the backs of the U.S. taxpayers is the "Public-Private Investment Partnership" or PPIP. The stated purpose of the program was to purge bank balance sheets of "distressed assets" (i.e. worthless junk). The program involves putting up taxpayer(public) funds to provide an incentive for hedge funds and other (private) investors to buy some of this junk. The program had "moral hazard" written all over it from day one. In the best case, the taxpayer would bear most of the risk exposure, while the private investor enjoyed most of any upside potential. It was also obvious that the plan was wide open to abuse, and would most likely involve the taxpayer purchasing the so-called "assets" at above market prices. An article in Bloomberg News spells out the early result of the program, revealing it to be yet another scam for bankers to make a huge profit at the expense of the U.S. taxpayers.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aOU4QAVClHXI&pos=3

In anticipation of the government's willingness to pay inflated prices for garbage, the banks whose balance sheets the program was supposed to purge of bad assets (so they could provide loans to us average joes of course) actually INCREASED their holdings of "home loan bonds" and other garbage securities. These are the SAME banks that have been the beneficiaries of billions of dollars in bailout funds. As the Bloomberg article reports, the market prices of the securities has rallied in recent weeks as the banks began snatching them up so that they could turn around and sell them to the taxpayers for a profit.

In summary:
- Banks get bailout funds from the U.S. taxpayer
- Banks use bailout funds to buy even more "toxic assets" at rock bottom prices
- Prices of toxic assets goes up due to increased demand
- Banks sell assets to U.S. taxpayer at inflated prices

Barring a miraculous recovery in Mortgage Backed Securities (not going to happen), the next step in the sequence of events will be for the price of the "toxic assets" to fall right back to their REAL rock bottom market values. Worthless junk doesn't become any less worthless just because it changes hands. This is just another blatant ripoff of the U.S. taxpayer at the hands of the banksters and their good buddies in the Federal government.

It's clear that the Federal government is willing to openly steal from the citizens to enrich a few politically well connected private interests. Why ANYONE would want to put this same government in charge of something as important as the healthcare system is beyond comprehension.