Moral Hazard

The federal swap meet mentioned here is the event where the banks were bailed out of 200 billion in bad loans. One does not need to even suspect a conspiracy. The simple fact the feds are taking bad debt as collateral for loans is simple proof the banks have been bailed out, at the expense of you.

Banks got involved in this foolish behavior because they knew, bottom line, they would be bailed out. It was a safe bet that countless americans could be persuaded to buy foolishly, and that when these speculations in real estate failed, the government would pass the loss off of the banks onto productive Americans. The first 200 million happened yesterday. It will not help. There is over one trillion to go.

Bookmark this post --- Email this post