COCKTAILS (OF THE TOXIC VARIETY) ON THE HOUSE
As Treasury Secretary Tim Geithner orchestrated a plan to help the nation’s largest banks purge themselves of toxic mortgage assets, Citigroup and Bank of America have been aggressively scooping up those same securities in the secondary marketThis is the logical outcome of Timmy's "Plan." If you know the government is gonna broker a bunch of deals to buy garbage at above-market prices (through outright purchase, leveraging, guarantees, etc), why the hell wouldn't you buy up as much of that garbage as possible at the current market prices? That's good business, right?
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both banks have been [aggressive] in their buying, sometimes paying higher prices than competing bidders are willing to pay.
Especially when you consider that the money they'll spend to make these market-rate purchases came directly from the taxpayers in the form of "bailouts."
I believe this is called playing with house money. And we're the house. But unlike Vegas (and Wall St.), in this example the house always loses.