The Financial Bailout Fiasco

November 28, 2008
The United States capital has accelerated attempts at averting a protracted and deep recession via earmarking another bailout of $800 billion for the fractured credit markets of America. This is in addition to the first $700 billion of taxpayers’ money used to rescue the banks of America.
http://www.mns.co.uk/0121349.html

The Treasury and the Fed are now trying to push through lower interest rates and to finance consumer loans with an $800 billion program. Pushing through lower interest rates would not need government money. It could simply be mandated through the system with interest spread caps that could very quickly be implemented. The fear is that banks would not make any money. However, the fear is the wrong way around: the banks would not loose as much money instead. The way it is approached now is too slow and too complex.

Financing consumer loans in the amount of $800 billion is a different story altogether. It sounds like providing the addict with another shot. However, firstly, the expected effect will not happen, and secondly, shoppers will not return. The logic behind buying up $600 billion in mortgages beats me. How is it changing anything in the market place of housing other than shifting the risk of massive losses to the government and rewarding some bankers some more?

H.R. Tschudi
http://www.ireport.com/docs/DOC-154277