Wednesday, March 12, 2008

The Fed rewards companies that created mortage mess by sticking taxpayers with bill for the party.

CNN: The Federal Reserve on Tuesday announced a program that will lend up to $200 billion to a group of 20 big investment firms, for a 28-day term. The firms can put up as collateral mortgage-backed securities issued by Fannie Mae and Freddie Mac, which generally are seen as safe because of an implicit government guarantee.

In other words, your government is dumping $200 billion into the economy by giving it to the companies that own all that mortgage debt. They are going to take that money and give it to their shareholders and executives. Then they are going to default on much of it, and the government insurance will step in and pay the bill - effectively gouging the taxpayers twice. Better yet, all Americans are getting screwed in this deal, because it is likely (like gravity is likely) to increase inflation and cause the dollar (that's the thing you don't have) to drop even further.

This is what an economic collapse looks like. It starts with a looting of the Treasury. Have you noticed the deficit lately? And the $12B in war costs each month? (and lets not forget we have to replace all that worn out equipment if we want to keep defending this country).

Is it insurrection to wonder where the citizens are and why they aren't burning the institutions and people responsible for this mess to the ground?

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