The Financial Times reports:

US banks that have received government aid, including Citigroup, Goldman Sachs, Morgan Stanley and JPM Chase are considering buying toxic assets to be sold by rivals under the Treasury’s $1,000bn (£680bn) plan to revive the financial system.

The insolvent US banking industry, whose negligent risk & lending practices brought the nation’s financial structure to collapse, and currently requires the unfathomable sum of $4 trillion of US tax revenue funded support to prop it up (TARP, TALF, PPIP), has decided getting in line to bid for their failed industry’s radioactive nonperforming assets with the leverage of PPIP’s 93% taxpayer revenue financing is a right of theirs and a good idea.

The sensationally awful decision-making that believed propagating a years long avalanche of ARM loans to unqualified buyers was good business, is intact. The serial on-the-brink episodes the nation has experienced for the last six months, at the hands of banking’s tireless malfeasance, has imparted no wisdom and resulted in no constructive changes in banking leadership’s strategy or execution.

Perhaps the well constructed views of a former IMF chief economist and current Sloan School professor are spot on; that these are the practices of US oligarchs that must be smashed and banking reconstructed.

By now, the princes of the financial world have of course been stripped naked as leaders and strategists—at least in the eyes of most Americans. But as the months have rolled by, financial elites have continued to assume that their position as the economy’s favored children is safe, despite the wreckage they have caused.

At the very least they are the other side of that coin, the “stupid theory”, as considered by the NY Times David Brooks.

We’ve been crashed and thrown about as a country by our bankers, and yet there they are, in line to use the funds that bail them out to keep the broken assets on their industry’s books because there’s easy and big money to be had. Tax revenues are guaranteeing the risk of loss and banking figures it can get in on more of that deal.

The burglar bids on the assets it fenced with the victim’s bank account. The amount of things wrong with this decision process are staggering…and after all that has happened already. Alcatraz is too good for banking’s leadership. Time to colonize the moon with them.