Skip to comments.The Rescue That Missed Main Street
Posted on 08/28/2011 6:09:33 PM PDT by neverdem
FOR the last three years we have been told repeatedly by government officials that funneling hundreds of billions of dollars to large and teetering banks during the credit crisis was necessary to save the financial system, and beneficial to Main Street...
Bloomberg reported that the Fed had provided a stunning $1.2 trillion to large global financial institutions at the peak of its crisis lending in December 2008.
In 2008, the Royal Bank of Scotland received $84.5 billion, and Dexia, a Belgian lender, borrowed $58.5 billion from the Fed at...
Mr. Todd also questioned the Feds decision to accept stock as collateral backing a loan to a bank...
THIS inequity must be eliminated, Mr. Kane said, especially since taxpayers will be billed for future bailouts of large and troubled institutions. Such rescues are not really loans, but the equivalent of equity investments by taxpayers, he said.
As such, regulators who have a duty to protect taxpayers should require these institutions to provide them with true and comprehensive reports about their financial positions and the potential risks they involve. These reports would counter companies tendencies to hide their risk exposures through accounting tricks and innovation and would carry penalties for deception...
As for making money on the deals? Only half-true, Mr. Kane said. Thanks to the vastly subsidized terms these programs offered, most institutions were eventually able to repay the formal obligations they incurred. But taxpayers were inadequately compensated for the help they provided, he said. We should have received returns of 15 percent to 20 percent on our money, given the nature of these rescues.
Government officials rewarded imprudent institutions with stupefying amounts of free money. Even so, we are still in economically stormy seas. Doesnt that indicate that its time to try a different tack?
(Excerpt) Read more at nytimes.com ...
This link is a review of Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon by Gretchen Morgenson and Joshua Rosner. I'm surprised that the NY Times didn't fire her yet.
That may be true, but as to the hundreds of billions we've sunk into the Fannie and Freddie bailout we'll never see that again.
ACORN, Dodd and Frank should reimburse taxpayers for the cost of the Fannie and Freddie bailout. Along with the Senator from ACORN, who received the most money from Fannie and Freddie, Senator Barky 0Bama.
The Fed bailed them out because the Fed, The U.S. Government, and U.S. banks promised everyone who bought the toxic mortgage securities that they were sound and were backed by the full faith and credit of the United States.
We sold them a load of crap and almost tanked many more economies beyond our own. That is a fact.
That is why the Fed tried to keep their bailouts secret. They claimed it was to prevent runs on foreign banks but most of all it’s because the same clowns in charge now were in charge then and they sold them beachfront property in Nevada.
Well, Obama’s got your answer. He’s going to shower your public schools and other local government offices with money in his current stimulus plan. Then you can further bow to your local, federally funded tyrants. So “main street” services for your masters are about to get more money through the kind of big government that they support for their only remaining customers: government employees.
America needs to produce some useful things—not only “crafts,” junk food, pet psychologists and lottery tickets.