Double-dealing Dimon

“In the ‘moral hazard’ department JPMorgan appears to have ‘rented’ out its access to the TAF to Target!

‘Target Corp., the second-largest U.S. discounter, will sell 47 percent of its $8.2 billion in credit- card loans to JPMorgan Chase & Co. for $3.6 billion to raise cash for stock buybacks and reduce its exposure to consumer defaults.’

Anyone care to bet if that credit-card paper will immediately wind up in the TAF?

“You don’t think Dimon would have created an arbitrage opportunity for himself via his seat on the board of the NY Fed, while (further) contaminating The Fed’s balance sheet with crap credit card paper, do you? You don’t think Dimon has been negotiating this with Target while debating the extension of those credit facilities as a board member of the NY Fed, do you?

“Oh, and Target then uses this money to buy back stock, thereby propping their stock price, and offload the risk of consumer defaults to the taxpayer!

“Both Bernanke and Congress are now permitting The Fed to essentially create a stock buyback and credit support fund for a retailer?

“You’re kidding me, right? We’re not just ‘backstopping’ banks but are now creating the ability to factor consumer credit card debt?

“Excuse me while I go barf in Bernanke’s shoes.”

[Market Ticker]


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