I recently came across an article in the New York Times explaining the lengths that the FDIC is going to in order to shore up the “toxic” assets that are floating in the financial system right now and in my opinion, it ain’t pretty… Basically leverage with responsibility for it! Talk about have your cake and eat it too… it really does exist! The people taking on these no-risk loans may not need debt settlement (considering they can just walk if it goes bad) but us taxpayers who have the joy of funding them sure need something!

The article states:

These loans, while controversial, were given a warm welcome by the market when they were first announced. And why not? The terms are hard to beat. They are, for example, “nonrecourse,” which means that if an investor loses money, he owes taxpayers nothing. It’s the closest thing to risk-free investing — with leverage! — around.

But, as we’ve learned the hard way these last couple of years, risk-free investing is an oxymoron.

So where did the risk go this time?

To the F.D.I.C., and ultimately, to us taxpayers. A close reading of the F.D.I.C.’s statute suggests the agency is using a unique — some might call it plain wrong — reading of its own rule book to accomplish this high-wire act.

Thanks to loopholes in the system and their own interpretation of the rules, the FDIC is on a rampage!

Somehow, in the name of solving the financial crisis, the F.D.I.C. has seemingly been given a blank check, with virtually no oversight by Congress.

Good times in the American Economy… Maybe eventually this “new rule” will trickle down to the troubled consumer and make settlement much easier!