It is a house of cards.
Not so long ago a collapse of a big fund would be a headache but these days it would be more like an aneurism.
A one (T) Trillon Dollar Bandage, and a disaster down the road.
Sad part is, they made the "bad loans" because the government forced them to, in the name of "equal housing opportunity". This mess is of the government's making (shock there, huh?).
MG
Nothing has been done to prevent the slicksters from bilking and frauding the future customers, none of the bankers involved have been held accountable for their shady wheeling and dealing, they have only shifted the load of responsibility to the taxpayer, putting big government as the landlord and ensured that we've slipped further into that abyss of Socialism. I just love this video.
This is such a tough one IMO. The Feds just let them get too big to fail. I believe that if there is any belief that we want a healthy real estate market, they had to do this. I hope they cut them up into little pieces where the risk of a single failure won't put the whole market at risk.
But the thought of a Nanny bail out of a private (well, semi-private) entity turns my stomach.
The Treasury Department said it was prepared to put up as much as $100 billion over time in each of the companies to keep them from going broke - in exchange for senior preferred stock. So, they stand to make a profit?
I don't know Bonita..can you answer that Mike?
I'm with you, let them fold. It's ridiculous that my tax dollars should go to people who took out huge loans with dangerous terms. Foolishness.
Congrats...You and Sweetthing now each owe the government $14,000 because of this deal.
Why isn't the government going after the CEO's that cooked the books so they could get their massive bonuses?
Bonita, I have your answer. Moody's just downgraded Mac and Mae's Preferred stock to junk bond status, so you'd better hope that the taxpayers aren't stuck with that stock for security. Doing that would amount to fraud on a mega-scale.
Before the downgrade, the stock was selling at 8% of book value. I know kids who aren't old enough to play with real folding money who would turn that deal down.
Rivrdog, thanks for the details...this is worth watching.
Commenting by HaloScan
