The government puts taxpayers’ money at unbearable risk
By Daniel at 16 July, 2009, 7:35 am
As long as the government is willing to back bank/brokerage assets there is no more risk involved for the banks, only taxpayers. And everyone knows the more risk they put on taxpayers the greater reward with only the limited downside of no reward. Until the government and the Federal Reserve can stop backing assets financial institutions will keep living in a fantasy land bubble where they equate arbitrating taxpayers risk as their primary business.
The greatest risk taker however is not Goldman, although it comes in at a close 2nd. It remains in my eyes Fannie Mae and Freddie Mac who continues to write and buy mortgages at rates that can’t cover losses, foreclosures, and defaults at the government’s request. But should they care, after all, the only way they go under is if they don’t continue to do the dumb things they were ordered to do by the government. After all, President Obama is considering ways to allow unemployed homeowners to skip or defer payments while they struggle to find new jobs! (proof that lunatics are running the asylum!) Thus the contradictions in our financial system are laid bare once again. We indeed are living in a socialist artificially manufactured, manipulated pipe dream. The sad thing is, such dreams inevitable become nightmares. I believe that the economy needs to realize ALL its losses, no matter how painful it may be before it can really move forward.
On that note, I would dare to venture that there is not a lot more the Federal Government can do to make things much worse for us in the future. But I could always be wrong about that. They could always socialize more American industries, move towards protectionism, make the dollar drop 50% more, install price and wage controls, legalize all illegal aliens, and close the banks to prevent a run on them. We know they won’t do the last thing. After all, why do that when they learned how to make it out of thin air now? Sorry for the cynicism, long rant or if I offend anyone. I’m just tired of the government screwing the people of this country as they have done the past four Administrations. Congress continues to insult the people of this country because members know that a majority of voters are clueless. They don’t care that they are spending, taxing and regulating this country into socialism and financial oblivion while continuing to claim the opposite! The people were strongly against the bailouts and “cap and trade” yet the congress ignores us. Elections always have consequences and we are seeing them played out right before our eyes…
ImpendingDoom
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