200 billion bail-out for predator banks & Spitzer

[nhboy]

The $200 billion bail-out for predator banks and Spitzer charges are intimately linked

"While New York Governor Eliot Spitzer was paying an ‘escort’ $4,300 in a hotel room in Washington, just down the road, George Bush’s new Federal Reserve Board Chairman, Ben Bernanke, was secretly handing over $200 billion in a tryst with mortgage bank industry speculators.

Both acts were wanton, wicked and lewd. But there’s a BIG difference. The Governor was using his own checkbook. Bush’s man Bernanke was using ours.

This week, Bernanke’s Fed, for the first time in its history, loaned a selected coterie of banks one-fifth of a trillion dollars to guarantee these banks’ mortgage-backed junk bonds. The deluge of public loot was an eye-popping windfall to the very banking predators who have brought two million families to the brink of foreclosure."

Eliot’s Mess Greg Palast

 

[Larry Gude]

Is this...

...a surprise? What won't this administration hand money out for, losing lottery tickets? A band day at the track or craps table? Maybe KENO that didn't work out as planned?

 

[MMDad]

...a surprise? What won't this administration hand money out for, losing lottery tickets? A band day at the track or craps table? Maybe KENO that didn't work out as planned?

They made loans available. That's hardly handing out money.

And what Spitzer did is illegal. Offering loans to banks in attempt to prevent the collapse of our economy isn't.

The fed offering loans does not justify what Spitzer did, and this type of article is just an attempt to try to minimize what he did and shift attention. Don't fall for it.

 

[Larry Gude]

Spitzer...

They made loans available. That's hardly handing out money.

And what Spitzer did is illegal. Offering loans to banks in attempt to prevent the collapse of our economy isn't.

The fed offering loans does not justify what Spitzer did, and this type of article is just an attempt to try to minimize what he did and shift attention. Don't fall for it.

...is irrelevant to my point.

If you think this administration has administered sound economic policy...we differ.

 

[MMDad]

...is irrelevant to my point.

If you think this administration has administered sound economic policy...we differ.

This thread is about minimizing Spitzer because of the bailout. I was discussing the idea behind the article. My point is that the one has no bearing on the other.

No, I don't think they've administered sound economic policy.

 

[forestal]

Fool, they are allowing the banks to pass off their bad debt to the government in the form of bad mortgages.

Welfare for the rich.

They made loans available. That's hardly handing out money.

And what Spitzer did is illegal. Offering loans to banks in attempt to prevent the collapse of our economy isn't.

The fed offering loans does not justify what Spitzer did, and this type of article is just an attempt to try to minimize what he did and shift attention. Don't fall for it.

 

[AndyMarquisLIVE]

Welfare for the rich.

Coporate welfare, there's a difference.

And, from my understanding, it's a loan. Loan, meaning they have to give it back.

 

[forestal]

I've got a bridge to sell you son.

What's happening is the Federal government is exchanging real money for "mortgage backed securities".

What this means is that when Joe Shmo can't repay his mortgage and forecloses on his house, Uncle Sam gets stuck with the debt. This has been happening alot, maybe you've read about it.

Would you exchange some of YOUR money for a piece of paper of undetermined value?

If so, give me a call, we can make a deal.

On Tuesday, Federal Reserve Chairman Ben Bernanke tried to ease the nation's credit woes by pledging to swap $200 billion in stable, solidly backed Treasury securities for banks' mortgage-backed securities, which have fallen out of favor with investors as housing woes spread. News of the Fed's most recent innovation, called the Term Securities Lending Facility (TSLF), sent stocks soaring on their steepest upward trajectory in five years. But stocks fell in the days that followed, plummeting Friday after the Fed announced it would help bail out New York investment bank Bear Stearns Cos. Stocks lost nearly 200 points on Friday, ending up modestly for the week at 11,951.09.

....
As for Bernanke's Term Securities Lending Facility (TSLF) it is intentionally designed to circumvent the Fed's mandate to only take top-grade collateral in exchange for loans. No one believes that these triple A mortgage-backed securities are worth more than $.70 on the dollar. In fact, according to a report in Bloomberg News yesterday: “AAA debt fell as low as 61 cents on the dollar after record home foreclosures and a decline to AA may push the value of the debt to 26 cents, according to Credit Suisse Group.
​

Coporate welfare, there's a difference.

And, from my understanding, it's a loan. Loan, meaning they have to give it back.