Open Thread: Derivatives Market Still Hot, Swindling 101


 hat tip Naked Capitalism and the rockcookie bottom.

The New York Post reports on how Citigroups and Bank of America are still playing the derivatives markets, and financing their speculations with TARP funds.

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 market, sources told The Post.

Both Citi and BofA each have received $45 billion in federal rescue cash meant to help prop up the economy and jumpstart the housing market. \

But the banks' purchase of so-called AAA-rated mortgage-backed securities, including some that use alt-A and option ARM as collateral, is raising eyebrows among even the most seasoned traders. Alt-A and option ARM loans have widely been seen as the next mortgage type to see increases in defaults.

One Wall Street trader told The Post that what's been most puzzling about the purchases is how aggressive both banks have been in their buying, sometimes paying higher prices than competing bidders are willing to pay.

No votes yet


Author of the newly published "Wage Theft in America: Why Millions of Working Americans Are Not Getting Paid - And What We Can Do About It", Kim Bobo talks about ways to detect and stop the growing trend of wage theft in the U.S.



Drawing upon years of practical organizational experiences, Kim Bobo is an engaging and informative speaker. Bobo is the founder of Interfaith Worker Justice. Her down-to-earth talk is enhanced visually by Labor Beat through tables and location footage. Edited to 28 minutes. For info: Labor Beat


"The wise man points to the stars and the fool sees only the finger - and discusses it 24/7 on cable."

It looks like EFCA is a dead issue since Spectrer dropped away.



Ten Radical Remedies America Needs

Related Topics: — Obama must use his leadership to make necessary radical ideas mainstream. These changes are essential if we are to build an economy of broad prosperity.

Read Full Article »