What this really means is I am LENDING them money to use while I don’t need it, with the understanding (what? no signed promise? not even a handshake?) that they will give me my money back when I am ready to use it myself, and the further hope/assumption that they will, in the course of using the money I HAVE LENT to them, have increased it so that when I need it I will actually receive more than the original sum. Most places, that is how money is borrowed. The borrower (them, not me) pays interest to the lender (ME) for the privilege of using the money.

Now, here’s what actually happened. One day, before I was even thinking about getting my money and its interest back from the folks I loaned it to, they go to the freaking government instead of me, to say they lost all my money and will the government pay them the money.

Sounds nutty. Especially when you consider that I am the government, at least I am where the government gets its money. So the folks who owe ME money don’t even tell me about it, which anyone knows is the minimally honorable thing to do. They go and tell people the world will end if the government (that would be me) doesn’t give them the money they owe me.

You know what? They don’t even intend to use that money to pay me back! Oh no, they want it for — damn, what are they going to do with it? We have laws that prohibit taxing the same income twice, but none that prohibit taking and keeping the money and more after that and without explicit permission.

How can I get a piece of that? Oh, woops, I already gave away my piece, and more after that.

exactly my point. they don’t know if their loans are going to a good risk or a bad risk (because they don’t know if the borrower is going under or is still solvent)…. but as the economy tanks, i think it’s worse than that because runs can cause even solvent banks to go under. too much risk that estimated and therefore priced.

And, there may be something else. They may need to hold funds in reserve to cover the CDSs that they sold and that are about to be claimed. (Nobody in this business deserves an AA rating.)

so all i had to do was download the pdf from the committee website and do a search on “rating.” perhaps you were thinking of our new representative jackie speier?

from page 213 of the transcript:

Ms. SPEIER. The rating was AA on Friday, and 2 days
later you needed a total bail-out. How did you go from being
AA on Friday to needing a total bailout 2 days later?