They had me at the melting cow
Gawker, that is: It's The "Absurd Financial Product Some Rich Person Actually Bought" Contest!, but I stayed for the story.
Today's decision by the Bush administration to stick us with even more debt (to the tune of half a trillion US$) is just insane. Re-inventing the RTC was a semi-decent idea yesterday, but it's morphed into a massive bailout for the entire economy. These idiots are re-financing the United States. Hell, they're re-financing BAD DEBT.
Ye gods and little fishes. Why the hell didn't we impeach the Clown College when they lied and invaded Iraq?
CNN wants to know, Will it work?
Um.
Those securities were backed by home loans, many made to buyers with bad credit or without proof of income. As housing values fell and foreclosures shot to record levels in the past two years, the value of those securities plunged. That in turn caused massive losses in the financial sector.
This week it reached a crisis situation. Banks and investment firms stopped making the loans to each other as they hoarded cash to protect against any sudden liquidity crunch as well from unknown problems on their partners' balance sheets.
No.
"I'm confident this will work," said Mark Zandi, chief economist with Moody's Economy.com. "The federal government is committed to backstopping the nation's financial system and will do whatever is necessary to make sure the system does not unravel. The details are important but secondary."
The Devil's in the detail Mr. Zandi. This bailout is going to cost more the Iraq war, which has already saddled the US with a multi-trillion dollar debt.
"If this doesn't work, we're in trouble, because there's not much more the government can do," said Jaret Seiberg, a financial services analyst at the Stanford Group. "They've left very few arrows in the quiver."
Good point Ms. Seiberg.
I'm a lot less optimistic than I was yesterday.
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Text of Paulson's news conference Friday
Paulson, Bernanke Expand U.S. Power to Rescue Markets
Rescue cost: Hundreds of billions