Taxpayers May Be Liable for Billions From Bear, Mortgage Rescue

Source: Bloomberg.com

March 26 (Bloomberg) -- Even as the Bush administration insists it won't risk public funds in a bailout, American taxpayers may already be liable for billions of dollars stemming from Federal Reserve and Treasury efforts to quell a financial crisis.

History suggests the Fed may not recover some of the almost $30 billion investment in illiquid mortgage securities it received from Bear Stearns Cos., said Joe Mason, a Drexel University professor who has written on banking crises. Treasury's push to have Fannie Mae and Freddie Mac buy more mortgage bonds reduces the capital the government-chartered companies hold in reserve at a time when foreclosures and defaults are surging.

Regulators ``are playing with fire,'' said Allan Meltzer, a Fed historian and economics professor at Carnegie Mellon University in Pittsburgh. ``With good luck, none of these liabilities will come due. We can't expect that good luck, and we haven't had it.''


Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aNXDBlrk1H1s&refer=home

---

Privatize the profits, socialize the risks. It's the American way!

for pennies on the dollar, possibly for free. Neil Bush helped bankrupt Silverado Savings and Loan. Jeb Bush and partners defaulted on loans of about $5 million. George Junior was either drunk or somehow involved...I just can't remember.

Just another example of how the wealthy can criminally plunder their way to mansions and riches, and (with the exceptions of a scant few, usually the ones who are not governmentally connected enough) when they get called on it, pretty much get away with it scot-free.

This story should be discussed on these popular news shows. More importantly, a discussion on how the republicans lobbied for the deregulation of the banking industry in the nineties - and how this caused our banking woes today!

We don't have a "media", we have a Ministry of Propaganda.

Today I got on C-SPAN with an editor from NYT and they cut me off the second I mentioned Sibel Edmonds and he fained ignorance of even knowing who she was. My question was going to be the not unwarranted perception that MSM avoids certain stories like the plague like "election fraud", "Sibel Edmonds case" and anything to do with the "9/11 Truth Movement" ... there is no way, not even on C-SPAN, that truth will ever be spoken on the Boob-tube - the revolution will not be televised ...

The ONLY thing that comes close to real reporting these days is right where you're looking - the Internet - and we can look for this to be corrupted soon to.

OWNED BY THE CORPORATISTS.

Just look at all the money that has gone to their defense contractor buddies because of the illegal war in Iraq.
Halliburton
KELLOGG BROWN ROOT
Blackwater

Just look at all the money their friends in big oil are raking in because of the high cost of oil
Exxon Mobile
Conoco Phillips 66 Union 76

How much swift-boating can that pay for?

One would expect the $30 billion we taxpayers are stuck with are all mangy dogs.

Don't gripe at JP Morgan - at least they are trying to help out some without jeopardizing those who work for their company, one of the largest employers here in Delaware. Sure, it was a prime opportunity for them but they will be taking in some loss with this deal.

But who gets bailed out in this decade? Investment companies and the airlines for $40 Billion.

Seems the suckers in the republican party don't have a problem with socialism after all. As long as it's socialism for the corporations, they are A OK with it.

:thumbsup: And the poor working class repubs NEVER EVER figure that out, do they? Morans!

Single moms need not apply..

welcome to DU! :hi: :toast: :party:

I've been hanging around here forever, so I figured I'd join the fray ;-)

They have plenty of money to spend on saving over leveraged and poorly managed investment banks like Bear.

Plenty to spend in Iraq, Afghanistan, Columbia, etc.

Plenty to spend on missile systems and new weapons.

But mythological deities forbid they keep their hands off of SSI and fund Medicare.

They'd rather have our senior citizens standing on street corners with cardboard signs begging for handouts.

Amazing how they can make these decisions without batting an eye when it comes to bailing out corporations but paying the money they owe to individuals causes them to go spastic.

With a glazed eyed, 'burp'.

When the corporation controlled
pitiful little national public radio network requires
a pathetic paid scripted reporter
to play a brief titillating tune
while rattling off a mere
Eight Seconds of morning stock exchange numbers....

Obviously,
meddling media marketeer 'student hires' are well aware,
americans instantly 'glaze over' when faced with anything more
complicated than
1 expendable unit + 1 expendable unit = :patriot: :patriot:

A good video clip form a few days ago:

http://www.youtube.com/watch?v=lTXEWh2yT_g

Jim has moved to Asia....says the US is over. I agree. The Greed of the neocons has ruined a pretty nice country. May there be a special place of horrors for them.

the CNBC bimbos give him all of the concerning data on China's inflation and he coolly responds that America's inflation is just as bad, but not accurately reported? At least foreign countries put out reliable data. Another aspect of our liquidity crisis is that foreign investors do not have any confidence in our accounting and reporting due to the lax regulatory environment and our government's proclivity to hide bad news.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x36976

Wed Mar-26-08 12:25 AM

Always check the economic news before I log off for the night.

...suckers!

Few people realize that in a bank failure part of the insolvency is in debt on Federal Reserve loans which is the point that the Federal Reserve becomes a public institution rather than a private corporation and the taxpayers suddenly have backed all the currency rather than the government. And the Bush Administration would like the Federal Reserve to replace the SEC - truly scary and even scarier is the number of Democrats who would approve it.

He wanted to make sure that his buddies in Wall Street had good safety nets - us.

oh, well...:shrug:

Thats why 1 percent of the population have most of the
money.

:rofl:

and how much are all those B/S golden parachutes and high dollar severance packages costing (unborn) taxpayers???

:shrug:

Its found at http://financialpetition.org

Yes, its mine, and yes, it calls for the impeachment of Bush and Paulson.

And yes, guys, I know, you hate me because I have voted Republican.

Ok, so do you hate me or do you hate America? Because what's right is right, and in this case, what they did was wrong.

Oh, and take a look at http://market-ticker.denninger.net later today. My blog post this afternoon will cover this criticism in some detail - its being composed now, and should be up shortly after the market closes.

PS: Senators are getting the message - apparently there is a big push to investigate this deal. Hmmm..... only 1,000 signatures or such so far, but folks - these are faxes and they get through to people.

Do the right thing.

This is NOT the Party of Abraham Lincoln - Lincoln would have been chased out of the party via Jeffords way if Lincoln was a republican today.

The thing is, Republicanism is NOT a bad thing and I've even voted for or even liked Republicans (this is before 2000 mind you). But the Republicans I can like such as my representative Mike Castle along with other moderate republicans need to grow a set of balls and reclaim their party.

Republicans as defined ceased to exist when Reagan was elected. Republicans were suppose to be the party of less government and yet he allowed it to grow (but not the services that could actually benefit people). And it's not the government of less taxes because taxes will have to be raised after Bush gets out of the White House.

This is exactly what we should be supporting, bailing out all these poor people who are going to loose their homes.

The truth is
We kick
and complain :o
and whine x(
and speak to each other in indignant tones :o
we all say "ain't it awful" :o
but when someone says "Whatcha gonna DO about it"
we get all shrinking and quiet
and practice the cult of "learned helplessness" ( Chomskey said it?)
which is what the thieves are counting on
right?
Am I right?
What we can do is...

Faxes....oh boy do they hate to get a pile of faxes ..a huge pile
letters
phone callls ( all those free minutes on the cell phones)
repeated all day
burn out the switchboards...the poor folks answering the phones will let their bosses know what is happening, trust me.
every day for a week
seriously
let the offices of both Republican( remember, these guys are on the ropes and real paranoid now)
and Dem Congress folk ( House and Senate )
AND especially the Finance committee members
AND very very esp. "the good guys"
Dennis..Ron Paul..Chris Dodd....Schumer, and that ever so smart Whitehouse.

Send something short and sweet and to the point and get everyone in your family to send something under their name.

We did this in the 70's. :hippie:
It worked.
I was a community organizer, following the tradition of Saul Alinsky.
Look him up, btw....
it worked...

IMPORTANT: Congress is on District Work Period, till the 30th.
That means they are supposed to be in their state offices...
like, local. So fax and call there.
you might luck out find your congress critter is going to be
speaking near you somewhere..hmmmm.

http://www.thecapitol.net/FAQ/cong_schedule.html

Don't know how to find them?
www.votesmart.org
www.congress.org

These guys (mostly) aren't used to us yelling back at them.
It's time to change that.

and now, on with your regular programming.
Thank you for your kind attention.

:patriot:

Just try to get a job when you are over 60 years old. If you get one, you can rest assured that you will not be able to survive on the pay. And as for the 80-95 year olds, just forget it. Oh, and the education money will be spent on this too. And don't think that Bush and his co-conspirators in crime will flinch one minute from demanding to continue the Bush's War and even extend it to Iran.

The Republicans are not rescuing the homeowners, they are just rescuing the millionaire CEOs and the wealthiest stockholders of these crooked companies. I have read that 30% of Bear Stearns was owned by the employees. After running his company into the ground and making taxpayers foot the bill, the top guy at Bear Stearns will take away millions in pay and the employee stockholders will get next to nothing. That is what is going to happen.

The Bushies and the managers of these huge companies are criminals. They are stealing from the poor. They have no idea of what poor and average Americans are going through.

I recently heard someone on the radio suggest the following bumper sticker: Republicans are either millionaires or suckers. It is so true. How could so many fools have voted for George W. Bush? I know many on this website will remind me that Bush cheated his way into office, but how could he even have obtained enough votes to allow him to cheat into the presidency?

And why isn't anyone demanding that the CEOs of the failed banks and mortgage companies be called to answer or at least pay for their criminal negligence in handling other people's money? Isn't there some basis for stockholders suits?

I've heard about a version of this:

Only three kinds of people vote Republican:
1) Billionaires
2) Millionaires
3) Suckers

Many of them need to go back to renting.

Bust also supporting the greed and stupidity of those who got into a house and mortgage when they shouldn't have. Tell me, when are those of us who have made the right moves, saved our money, not gotten greedy, not gotten into a house we can't afford, when are we going to be rewarded? It seems like our only reward is bailing out idiots and greedheads, gee, thanks.

On top of that, now we're all getting to pay for this idiocy through higher inflation, as the Fed continues to lower interest rates and raise the money supply.

I say let those on both sides, the corporations and individuals, pay for their own mistakes, perhaps they'll learn their lesson if and won't make stupid, foolish greedhead mistakes next time. I have enough on my plate as is, paying my own bills, I don't need to be paying other peoples' bills.

Ok, well I guess I don't know enough about the bill, but I was under the assumption that bailing out people from bad mortgages was something us Dems support, but if its just going to a bunch of rich people and actually does not bail out people from bad mortgages them I am against it.

The wealthy believe in Capitalism when it comes to profits and Socialism when it comes to risk.

In modern America, we have an entire government devoted to maintaining the corporate infrastructure. This is not free capitalism, folks. What baffles me, is that more people aren't outraged by this.

...words that come from a new bumper sticker, they aren't outraged because they're either millionaires or suckers.

Most of them are suckers, believing the "free market" deregulation crap conservatives have been selling for decades. What they don't realize is there's a lot of regulation in "free market" capitalism -- but it's mostly slanted in favor of the corporations, and against workers and consumers.

There are very few problems facing Americans and this country as whole right now that can't be traced back to the "free market" and the policies that support it.

Treasury Sec. H. Paulson said, "Housing Prices need to fall further to permit shell-shocked Housing market to stabilize and Policy makers should not interfere." In other words--Put the Screws to the little guy.

All the hundreds of billions of $$$ they've sunk into bailing out the financial sector so far -- they might as well have just lit it on fire and sent it into a black hole. The only thing that will escape is the debt, which we and generations of American taxpayers to come will be saddled with.

On top of all the other taxpayer debt BushCo has foisted on us.

Imagine where we'd be if they'd used their powers for good.
:mad:

edited to add: welcome to DU!

I was looking up the video of Allen Greenspan saying on Jon Stewarts show that this is in fact a regulated market and
I found a modification of it by the website e-gold. Anyhow here is the link and you can hear it straight from
the horses mouth that this is not a free market and the inflation rate is directly controlled by the Fed. E-gold
is actually calling it confiscation through inflation, which I thought was a pretty good term. Anyhow, maybe we
should all be buying Gold, hell its going through the roof. I guess we need to all re-visit the term "Military-Industrial" complex that Eisenhower warned of. Maybe ol Ike got pissed off at his corporate masters and spilled the beans. You know, actually someone should start an entirely new thread about this because its about time
we started following the money and maybe discover some way to combat it.

http://www.youtube.com/watch?v=x56MpWZh88s

Do I have that right? Un-Fucking Real!!

This is as predictable as the sunrise. It's always the solution at the end of a binge that benefited the wealthy: let the working class bail out their debt.

corporate welfare doing better than ever.

create a 2 class system, lots of poor and few very very rich. They give meanng to the old term capatilistic pig.

How do people not think this is socialism?

REALLY UGLY.

Yes folks it's not going to stop with Bear Stearns, far from it.

The government of Hong Kong bailed out their banks during a banking crisis 10 years ago and received a large stake in many banks. As the banks recovered taxpayers profited enormously.

The government of New Zealand renationalized the national airline when it was facing bankruptcy. Now it's making money and taxpayers are benefiting.

The government of Britain nationalized Northern Rock as it was failing, and British taxpayers stand to profit immensely if they can turn the bank around.

If we're going to use taxpayer cash to bail out banks, the government should demand large stakes in them. Anything else is corporate welfare.

take a chance on getting caught and going to prison for stealing from the american taxpayer also. Looks to me like crime pays in the US.