Goldman: Quote of the day - “Leopards change spots”

from www.creditwritedowns.com

by Edward Harrison

If you haven’t noticed, I think the Geithner Plan, while far from perfect, has a reasonable chance of success. Marshall, too, believe the plan work as he has suggested in his last post. The optics of it are another matter.

“Goldman has already said they will repay their TARP money within a month (obviously all of this negative press scrutiny is getting to them). Easy enough to do: they’ve had billions funnelled to them via AIG, so they can now take that money and “repay” TARP. Nice circular shell game.

And that’s how the Geithner plan will work as well. They’ll all be bidding for each other’s assets at vastly inflated prices, getting a good “mark” on their books and then they’ll dump the crap with the taxpayer. I actually think the plan will work because it’s officially sanctioned larceny. It’s just like me saying, I could get rich if the government gave me the means to rob banks every time I needed money.

Is this a great country, or what?”

The money quote, however, comes from Thomas Ferguson, a well-known professor at UMass-Boston:

“Leopards change spots with amazing celerity when it pays. By the way, I think the next step is pretty obvious with the banks and the US government this morning. Institutions that get rid of toxic assets thanks to the new Geithner plan will then forthwith pay back their TARP loans. Indeed, if they are confident of their refinancing, then they may do it without participating in the program. That way they escape the constraints, and get money. So much for exec comp issues.

Sort of like the original TARP plan as Paulson and Bernanke hatched it.

How about that for history proceeding in spirals, rather than straight lines?”