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$700Bln Loss

$700Bln Loss

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Published by Anil Selarka
Pauslon, Treasury Secretary, drafted $700 billion rescue package. What was the hidden Agenda which defrauds American Tax payers - read further
Pauslon, Treasury Secretary, drafted $700 billion rescue package. What was the hidden Agenda which defrauds American Tax payers - read further

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Published by: Anil Selarka on Dec 02, 2008
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06/26/2009

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EMAIL
Attachments: ( 1 )
 
PDF File of this Email
 
Attn: Senator
Our Ref:
07-A001-R 
Dated26-09-08Tel/Mobile
Sub:Defrauding the American Tax Payers with $700 Billion dollars! Paulson's PoisonPill
 Hello
Defrauding American Tax payers with $700 Billion dollars! Paulson's Poison Pill
 Where is the protection of Tax payers under the $700 billion plans, if you read what Bernanke saidduring the Congressional hearing?Mr. Bernanke said he was not in favor of paying the price of “Fire sale”. Mr. Paulson said that hewas willing to buy the Bad Debts at substantial discount (about 35%), that is, paying $65 forevery $100 face value of the debt and holding them until maturity. To one question from theSenator, how much the securities are really worth now, Mr. Bernanke said only a few cents! Wow!Read them together, the Paulson – Bernanke plan foresees the payment of 65% of face value of $100 for the Bad Debts currently trading at few cents (about 20 cents to 98 cents). What is theAsset backing? Big Zero. Why? Because all derivative papers are secondary mortgage papers ormortgage with second lien that gets paid only after primary lender is paid off. Since the primarylender has foreclosed, seized and sold the mortgaged property, nothing is left for the secondary
 
mortgage holders who have to rely upon the mortgaged property alone. They have no otherrecourse or option to realize their dues.The question arises, why Bernanke and Paulson are bent upon paying $65 when the securitybacking is ZERO and current market is just 20 cents. That is, they are willing to pay the premium
 
of 300 times or 30,000% more than the market value. As public servants, they have fundamentalresponsibility to look after the interests of the American Tax Payers (ATP), and buy the assets atthe best bargain price or at least current prevailing price. Anything contrary to this dictate,amount to betrayal of and defrauding the tax payers to the extent of $700 billion dollars” Mr. Paulson said that he (treasury) would hold the securities until maturity to realize the full value.There is no market for those securities at the moment, he said... Since the Treasury will have notangible security under the secondary mortgage paper and they too can not sue the borrowers dueto non recourse nature of the mortgage, the possible value realization is ZERO, whether he holdthem for one year, 10 years, 30 years or 100 years. That is, the entire amount of $700 billions willturn to ZERO almost instantly when distributed or used to buy the bad debts.Mr. Paulson and Bernanke also want clean passage of bill before this weekend, that is, before theSeptember end. Also, significant is the ending of ban on short selling of financial shares 2 dayslater or October 2, 2008. Again read them together. What Mr. Paulson and Bernanke seek to
 
achieve by hustling agreement before September end? Here is the possible explanation.September is the end of the quarter or Q3. The quarterly result or Q3 for the period endedSeptember 2008 will arrive in the market in second or third week of October. If the bad debts arebought before September quarter, new market price will be established @ $65 against just 20
 
cents. Under the MTM or Mark to Market rule, the securities are marked to market price forvaluation purpose. By paying the price of $65 against just 20 cents, almost all banks will bevaluing their portfolio at newly established market price - $65 against 20 cents. This is nothing butthe manipulation of the market price by artificial means. All banks, investment banks, and brokerswill be re-valuing their portfolio based on concocted market price under MTM rules, and they willstart reporting bogus profits by reversing the excess provision in the past and providing less forthe future.If the budget is passed before September quarter, there will be huge rally in financial shares.When the short selling ban on 799 financial shares is lifted by SEC on October 2, there will be

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