Back on Friday, October 17th, we blogged about What Does the $700 Billion Bailout Do For You. It never actually said that the money was being set aside to buy so-called toxic mortgages, but if you speak to most people, that certainly was the impression. The general understanding was that we, the taxpayers, were giving the Treasury Department, access to some $700 Billion Dollars to buy up “non-performing assets” - or loans not generating payments - so that banks could free themselves up to make more loans, and thus, get money flowing again in the marketplace.
So, it is rather shocking to me to see that Treasury Secretary Hank Paulson has completely abandoned that idea. Am I the only one that is perturbed by this? In a Bloomberg.com article posted today that talks about the continuing tumble of the stock market based on fears of increased bank losses, the following two paragraphs are telling…
Treasury Secretary Henry Paulson has abandoned a plan to use the Troubled Asset Relief Program to buy mortgage assets from banks, helping send U.S. financial shares lower and credit default risk to a record high yesterday.
“Changing the terms of the TARP as suddenly as he did undermined investor confidence,” said Richard Schlanger, a bond fund manager in Boston at Pioneer Investments, which oversees $44 billion. “It’s a frightening situation.”
Frightening situation, indeed. The article continues on to say our economic outlook as worsened significantly.
Federal Reserve policy makers lowered forecasts for U.S. economic growth and employment in 2009, saying the outlook has “worsened significantly” since June, according to Fed records released yesterday. The U.S. economy will contract through the middle of next year, and the unemployment rate is projected to be 7.1 percent to 7.6 percent in 2009, they said.
And oddly enough, the US automakers seem to be making all the headlines about how they need a bailout or they are going under. But try this on for size: The three CEO’s of those companies took corporate jets to Washington, DC, individually, to attend hearings earlier this week. Projected costs of a single corporate jet round trip is $20,000, while a first class ticket on any major airline is under $1,000. I say they have some nerve asking for a handout when they are so wasteful with money. But then, wasn’t AIG just doing this - repeatedly - with corporate retreats and taypayer bailout money just a few weeks ago?
You can read about this and more at www.greatnevadahomes.com.
Comments(0)