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Thu Jan 10, 2013, 08:59 PM


Taibbi Scores Again !!! - 'One Broker's Story' - RollingStone

Secrets and Lies of the Bailout: One Broker's Story
Matt Taibbi - RollingStone
POSTED: January 8, 2:50 PM ET



The real import of Hartzman's story is that he and his clients lost money when they made what in retrospect turned out to be poor investment decisions, because they were denied access to the same information many of America's leading banks (and, by extension, its leading bankers) had in the years after the crash.

Most galling of all to Hartzman was Bloomberg's analysis which showed that the banks receiving secret bailout monies earned some $13 billion in profits by taking advantage of the Fed's below-market rates. It was one thing when he'd merely lost money betting against firms without all the data at his fingertips it was another when companies like his very own former firm Wells Fargo could make (according to Bloomberg) $878 million in profits by availing itself of the secret aid.

"When I saw they made so much profit from this, that's when I got really angry," Hartzman says. "I was like, 'They made $878 million? Hell, no.'"

"That's the thing that really hurts," says the 68 year-old client of George's who lost retirement money. "It's that the banks made money on this, and it really came out of my pocket."

Mandrano, another of George's clients, runs a business restoring historic homes. "It's funny, all this talk about the small businessman, that's who I am," he says. "I've got crews out there. I'm paying people, I'm churning money through the economy, for cleaners, and plumbers, and haulers, and carpenters, and so on. I'm making my contribution. But when you sit there and you lose 20 percent of your retirement because there's no full disclosure, it's a real kick in the gut."

This is the real problem with the bailouts, and the issue we tried to underscore with the "Secrets and Lies" piece. With their hide-and-seek policies, bogus stress testing and stubborn insistence on calling failing banks healthy and publicly endorsing other such fibs, the architects of the federal rescue (from both the Bush and Obama administrations, as well as from the Federal Reserve) created a two-tiered market. The new economy has two classes of investors: those who know the real numbers, and those who don't.

So while the proponents of the bailout will argue they were a success, and the covert and overt federal support helped bring the Dow all the way back from below 7,000 to above 13,000 seemingly a good thing no matter how you look at it there's another bitter reality, which is that the bailouts officially created a sucker class.

When banks started making fortunes again in 2009 and beyond, it wasn't a victimless situation. There were losers in this trade, too. Hartzman and his clients are examples of the kind of people who lost when the government made decisions about who's entitled to the truth and who wasn't. As one former hedge fund manager put it to me recently, "Joe Sixpack has no chance in this market."

Much More: http://www.rollingstone.com/politics/blogs/taibblog/secrets-and-lies-of-the-bailout-one-brokers-story-20130108

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Reply Taibbi Scores Again !!! - 'One Broker's Story' - RollingStone (Original post)
WillyT Jan 2013 OP
patrice Jan 2013 #1
man4allcats Jan 2013 #2
bvar22 Jan 2013 #3

Response to WillyT (Original post)

Thu Jan 10, 2013, 09:14 PM

1. Senator Sanders inveighed against that secret money when it first came to light. nt

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Response to WillyT (Original post)

Thu Jan 10, 2013, 10:14 PM

2. Matt Taibbi is great!

Thanks for posting!

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Response to WillyT (Original post)

Thu Jan 10, 2013, 10:40 PM

3. So WHERE is the Political Party that is supposed to represent Working Americans?

They have no trouble finding us to beg for more money,
so WHERE are they NOW?

WHO speaks for US?

You will know them by their WORKS,
not by their rhetoric, promises, or excuses.
[font size=5 color=green]Solidarity99![/font][font size=2 color=green]

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