Econintersect: Economist Michael Hudson has commented on the characterization made by recently retired head of the FDIC (Federal Deposit Insurance Corporation) Sheila Bair that our financial system is run like a Mafia organization. He made the comments talking to Max Keiser on the Real News Network, video follows the break. Hudson says he was present at talk given by Bair in early October where she used that terminology.
One key element of what Hudson discusses is Bair's assertion that the only reason for TARP (Troubled Asset Relieve Program), which authorized $760 billion dollars of money from the Treasury, was to save Citigroup from bankruptcy. The massive bailout was conducted solely to hide the fact that Citigroup was insolvent.
Here is the video:
The assertion by Bair is an insider statement that substantiates the argument that many were making in 2009 that Citigroup was insolvent. Included among those analysts was Econintersect Managing Editor John Lounsbury.
- A Tale of Two Banking World (John Lounsbury, Seeking Alpha, 22 July 2009
- Can Citigroup Flail Its Way to Solvency? (John Lounsbury, Seeking Alpha, 17 December 2009)
Hat tip to Roger Erickson.