It Was An Illusion That Tax Payers Made Money Off Citi

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Posted: Dec 13, 2010 10:34 AM
It Was An Illusion That Tax Payers Made Money Off Citi

The problem with a rigged market capital system is that lying has become second nature to Ben Bernanke, Wall Street, and the hosts and guests on CNBC. As a result, fraud is now the number one component ruling our fragile economy.

Until we stand up and stop allowing perpetrators and predators like Bernanke, the elitist hosts and guests on CNBC, the Wall Street elite, and the criminal CEO’s of the five shadow banks from hiding the truth about our economy, we will pay the price. Just yesterday the CEO of Citi lied on CNBC by stating that the taxpayers profited from the money they invested in Citi. What, are you nuts?

Bend over America. Here is what the government and Wall Street don’t want you to know about the stock deal. The amount of money the government actually invested in Citi was very small. The real money came from Bernanke.

The scam worked like this:

It was impossible for Citi to make enough profit to buy its stock back from the government. So Bernanke bought billions of dollars in toxic subprime mortgages from Citi at 100 cents on the dollar (100%) when they were worth anywhere from zero to 4 cents on the dollar (0-4%). This effectively shifted the debt from Citi to Bernanke; an accounting trick used to hide Citi’s losses from its balance sheet. But remember…. Citi will have to write off the losses at some point.

The second accounting trick used by Bernanke to boost profits was to loan Citi money at zero percent (0%). Citi then lent the money back to the treasury for five percent (5%), giving Citi a rigged profit; money that was then used to buy stock back from the government for another profit! Geithner, chairman Parsons of Citi, the president, and CNBC bragged about this profit, but what they don’t want you to know is that the ‘real’ accounting shows no profit whatsoever for the taxpayer.

Here is why:

Bernanke was able to lend Citi money at 0% by cutting the rates on your CD and savings accounts to 1%, in the process shifting the bad loans onto his balance sheet and hiding them from Citi’s. Is it any wonder that Bernanke got upset when Ron Paul wanted an audit?

What the government doesn’t want you to know is that the interest you normally would have made on your CD’s and savings accounts fell like a flying monkey. It was stolen from you and me, and given to Citi at 0% so that they could profit from the buyback of their stock, previously held by Geithner and the Treasury Department.

Even though Parsons said it was a ‘win-win’ for the taxpayers and the shareholders, the truth is that if you split up the money the taxpayers made on the deal minus the money we lost when Bernanke dropped the yields on our CD’s and savings accounts, we actually lost money. Not to mention the shareholders aren’t getting any dividends from the TARP bailout. Parsons and his cronies like Rubin got rich at the expense of the shareholder, whose stock dropped from $56.00 to $1.50. To make things worse, these financial terrorists won’t have to pay taxes on their losses, even though they made huge profits! The very people who drove Citi into the ground can count on big bonuses, too. What, are you nuts?

Ultimately, all of this fraud and abuse will lead to another bailout by Bernanke & Co., thanks (or no thanks) to the Dodd/Frank bill. When Citi is finally forced to recognize the losses it shuffled to Bernanke, and it is forced to buy back all of its fraudulent, un-backed mortgages from Fannie Mae, and when all of their commercial loans default, it will go bankrupt. And we the tax payer will foot the bill again under the lie and illusion that we are making money on the deal.

Dodd, as the head of the Senate Banking Committee and Frank, as the head of the Housing Committee, were supposed to protect us from this kind of behavior.

To take advantage of this scam, I told my gang members to continue to buy bank and mining stocks as a trade not an investment and as a result since November many philsgang members have returns of 15%to 25%. Join me at www. Philsgang.com to find out my next strategy if the SPY stays above 1225 or if it fails. You can also tune in each weekday from 3:00 to 4:00 pm est. and I’ll tell you what Wall Street doesn’t want you to know!