Again, said without a hint of irony.

posted by The Vidiot @ 9:36 AM Permalink

There's a big bailout in the works for Fannie Mae and Freddie Mac that could be on the President's desk as early as next week. A deal has been struck.

The added provision, proposed by Treasury Secretary Henry Paulson Jr., would give Fannie Mae and Freddie Mac access to government capital in the form of loans or equity purchases.

So, basically, the government is going to hand over money to the two entities, so that all of the owners of those restructured assets won't loose all of their money. This deal doesn't really help the homeowner who is facing foreclosure though. In fact, I suspect that if there's money for a bailout, the banks will foreclose on even more houses, knowing full well that there will be money for them from the government to cover their losses.

Though, here's the ironic part.

While the White House favors much of the bill, it has threatened to veto it over a provision that calls for almost $4 billion in grants to states and communities for buying and repairing foreclosed homes in distressed neighborhoods.

The White House opposes the measure because it says it helps lenders and not homeowners. Democrats backing the grants dispute this, saying that foreclosed homes drag down property values for surrounding homeowners.

The ENTIRE bill helps lenders and not homeowners. That $4 billion provision actually MIGHT help homeowners, so that's why the administration opposes it.

But this guy has a theory or two on the bailouts:

The crux of the matter is that the Illuminists know that if they cannot convince the US public to bail out these various bonds and derivatives and their various owners and counter-parties, the system will collapse and all those trillions in treasuries hanging around in the forex reserves of these nations will come back to roost with a vengeance as foreigners stampede to unload their treasuries and their remaining toxic waste in exchange for commodities and other tangible assets before they become worthless and/or to force the Illuminists to lobby for a public bailout of the tanking asset-backed bonds and derivatives under threat of a treasury boycott or hyperinflation-inducing treasury flood back to the US. That is their greatest fear, because such an event would destroy them and their precious system, especially the bond market, which is the main source of their power, a fact which we cannot overemphasize. They are trying to manage the dollar down gradually by use of a beggar-thy-neighbor policy, and the failure to win these public bailouts would collapse the system and take them all down with it before they have a chance to bail out of stocks, bonds and other paper assets through the dark pools of liquidity known as Project Turquoise and Baikal and into commodities and other tangible assets.

Where are those aliens when you need them?

Labels: bailouts, banks, Economy