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Aristotle
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Joined: 05 Dec 2007
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Treasury Failure to Regulate Banks Causes FDIC Huge Losses
PostPosted: Fri Feb 27, 2009 1:56 am Reply with quoteBack to top

Today, the U.S. Treasury Department's Inspector General released a report blasting the Office of Thrift Supervision (also a part of Treasury) for ignoring problems and failing to "regulate" IndyMac Bank. The report says that OTS' laissez faire attitude cost FDIC $10.7 Billion, $2 Billion more than previously forecast.

See the L.A. Times article on the Inspector General's report:

http://www.latimes.com/busines.....9053.story

and see a more generalized summary of FDIC's expenses in 2008:

http://www.washingtonpost.com/.....05_pf.html

The theme of the Inspector General's report is echoed in a recent column by Professor William K. Black, a former high level savings bank regulator. His view: Treasury Secretary Geithner is continuing the Bush-era Treasury Department policies of not enforcing existing law requiring hands on regulation of commercial banks and savings banks BEFORE they become insolvent. See:

http://www.huffingtonpost.com/.....69234.html

Following up on that theme, is yet another news story, describing the utterly chaotic, uncoordinated hands off approach the Treasury Department is taking in discharging its obligation to regulate and supervise Citicorp. See:

See: http://online.wsj.com/article/.....67485.html

And, as the logical result of Treasury's gross incompetence at regulating the banks, today the FDIC announced that it is likely to need a "special assessment" of the banks to replenish the insurance fund. See:

http://online.wsj.com/article/.....od=testMod

It doesn't take a genius to put these various news stories together and see that the Ship of Fools: Geithner, Summers, Bernanke, Emanuel and Axelrod think the earth is round, when in fact it is flat and they are sailing the ship of state directly towards the edge.

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