From the reality-based community- the truth about the successful bailout

[tickyul]

Moral hazard..........they will look for this same type of "help" again when needed. Hey, more reason to take stupid risks..........Big Brother will bail you out.

[Swingblade]

Originally Posted by shorebaby

Well it's not working out too well for the investment banks, who were the largest recipients of TARP money. They do not lend to borrowers like traditional banks. Banks are no longer allowed to trade their own positions. So your source is a heaping pile of misinformation.

By the way, AIG is not a bank, and Fannie and Freddie quasi governmental agencies.

You know how it went, the tax payer bailed out AIG and the money went to Goldman Sachs,Merril Lynch and others. And what role does Fannie/Freddie play :

Banks can be assured that Fannie and Freddie have funds to purchase conforming loans, so they can increase such lending. This improves liquidity in the mortgage market, lowering interest rates.
In 2006, Fannie and Freddie insured 24 percent of all subprime loans so they needed to keep these loans viable.[48]
Lower borrowing costs for banks typically increase the "spread" between the rate at which they borrow and which they lend. This increases bank profitability, shoring up bank liquidity and balance sheets further.

Federal takeover of Fannie Mae and Freddie Mac - Wikipedia, the free encyclopedia

So there is some kind of connection, right?

[thebigr]

Originally Posted by Gurbie

Thanks for the reference. I read a new book on history, politics, and social issues every couple weeks. I try to keep informed on all points of view. Did you read this week's Economist? Center-right corporate-friendly weekly from England? The editors have some very harsh words for the GOP this week. Basically, they tell them to quit acting like spoiled children.

I'll check out Ritzholtz, soon as I get through Madick's "Age of Greed", which charts the nearly complete 50 year campaign by the Corporate Right and the anti-tax radicals to roll back the social and economic gains made by the middle class during the Progressive Era (which I recommend you read! )

Thanks, just ordered "Age of Greed". Looks like another good book. It's amazing how many good books have come out the past few years about the nightmare we are in right now. I am a very optimistic person but I truly don't see many positive things as far as the worlds economic picture is concerned. So many countries in deep deep debt all at one time. Don't think it will play out to well in the future and do believe it will start in the EU as far as defaults. Hope i am wrong.

That is why I get so disgusted when I am on sites like this and watch people fighting back and forth about the Republicans this and Democrats that. They are both one in the same and don't have the American peoples best interest in mind. People may like Obama as a person and there is nothing wrong with that but when it comes to his politics he is the same as the last man we had. The banks and corporations own him. I hope America wakes up but I rather doubt it.

[shorebaby]

Originally Posted by Swingblade

You know how it went, the tax payer bailed out AIG and the money went to Goldman Sachs,Merril Lynch and others. And what role does Fannie/Freddie play :

Federal takeover of Fannie Mae and Freddie Mac - Wikipedia, the free encyclopedia

So there is some kind of connection, right?

Of course there is a connection Fannie and Freddie (government agencies) promoted liar loans, no doc loans, etc. In a misguided attempt to promote home ownership which really pumped up the bubble.

AIG insured those loans. If there was no insurance there would have been no mortgages. If AIG went belly up, no bank would write any mortgages to any but the most qualified buyers. The government had to cover for it's own stupidity.


There is another thread on this forum which proves the government doesn't learn real fast. They are intimidating banks into lowering standards.