The Banks Want it All

FED chairman Ben Bernanke said in a London speech yesterday that the banks need the rest of the TARP (i.e. bailout) money -- and more besides. His speech was intended as a shot across the bow of the incoming Obama administration: Billions for banks, nada for everyone else.

Mr. Bernanke, tacitly acknowledging the unpopularity of the bailout program, said the public was “understandably concerned” about pouring hundreds of billions of taxpayer dollars into financial companies — especially when other industries were getting the cold shoulder.

But, he insisted, there was no escape. “This disparate treatment, unappealing as it is, appears unavoidable,” Mr. Bernanke said.

The reason he gives? The Bush recession, escalating unemployment, and rising bankruptcies will lead to more losses for the banks, now estimated to reach nearly $2 trillion.

Here's our favorite part, the one that sends our blood pressure through the top of our skull:

Citigroup is not alone. JPMorgan Chase, Bank of America, Wells Fargo and most other big banks all expect enormous losses as millions of consumers default on their mortgages, credit cards and automobile loans. Other losses are expected on loans made to commercial real estate developers, small businesses and for highly leveraged corporate buyout deals.

Rinse and repeat that: Consumers are going broke so we need to give away money to Wall Street. To pay for things like "highly leveraged corporate buyout deals"???

This raises a new question. Just when are Bernanke and Secretary of Treasury Paulsen planning to fly their airplanes into the ground near Milton and escape in a canoe?