McCain blasts Fed for bailing out failed banks

Senator John McCain mounted a fierce attack on the Federal Reserve today for bailing out failed financial institutions, telling it to get back to “its core business of responsibly managing our money supply and inflation”.

Speaking to a business group in Wisconsin as Henry Paulson, the US Treasury Secretary, unveiled details of a government rescue plan that would cost "hundreds of billions of dollars", the Republican presidential nominee said the Fed should “get out of the business of bailouts”.

The Fed engineered an $85 billion takeover of insurance giant AIG earlier this week, before which it pledged to prop up mortgage giants Fannie Mae and Freddie Mac to the tune of $200 billion. Today, after consulting with Ben Bernanke, chairman of the Federal Reserve, Mr Paulson urged the government to spend hundreds of billions of dollars to take toxic mortgage assets off the books of financial firms to restore financial stability. That call came hard on the heels of an earlier Treasury announcement that Treasury it would siphon up to $50 billion from the country’s Exchange Stabilization Fund for a temporary guarantee program to shore up the U.S. money market mutual fund industry.

Mr McCain’s opposition to the bailouts is a gamble as many within the financial sector – and in the public at large – view the rescues as essential to prevent a wider economic crisis.

The Grand Hyatt in NYC is owned by the Hyatt Corporation, which is owned by H Group Holding.

The Hyatt Corporation is a private company owned by the Pritzker family. Penny Pritzker is one of four major heirs.

Penny Pritzker is Barack Obama’s chair for his campaign finance committee, sometimes also referred to as treasurer for Obama’s campaign finance committee.

So Obama’s campaign finance committee’s chairwoman is hosting Ahmadinejad on Thursday at the Hyatt.

The Pritzker family, Penny in particular, were pioneers in creating a new financial product in the late 1990s and early 2000.

It was called the subprime mortgage.
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When their bank failed, they ended up owing the government half a billion dollars in unreimbursed FDIC insurance payments.

Thank you, AZ Carolyn. I'll do that as soon as I can, was up half the night listening to Ian Punit (sp?) which I hardly ever do, first thought I didn't want to listen to that stuff, then just wanted to hear what they were saying. I had just gotten the news I'd lost a friend suddenly yesterday so will have to deal with that. But I want to listen to it ASAP. So good to get that sort of info with my computer.

This whole subprime thing threw me into a loop, all the grand talk. Subprime, subprime what does it mean? Duh, it finally clicked. To think I used to understand mortgage loans, had to install, and maintain the software to process them, write conversions for one package to another, run and understand amortization schedules, even know the formulas, julian dates and interest calculations, etc. So I HAD to know what I was doing and do it right. Of course, there was help and checks and balances. But back then, we were just moving beyond fixed-rate loans into variable-rate, loans "tied to prime". Then my daughter got a balloon loan, didn't sound good, but never really looked into it.

But I've forgotten much of what I ever knew since I haven't worked with it for so long, but that was just the nuts and bolts of it, and only understood in a vague way how the housing market and all loans and credit affected the economy. You can't know everything about everything because it's all so specialized. I think that's why people like me now are having trouble understanding it.

Closer to home, a nice duplex went on the market down the street and around the corner. If I were situated differently, not necessarily money but managing all that and the headaches of keeping it maintained and screening tenants, I would have bought it in a heartbeat if the price were right. I remarked to my daughter about it, older, single-story, side-by-side, bay windows, nice side lot, nice place, several similar of same design around town. The for sale sign was only up for 2 or 3 days, place was only on the market once in the last 40 years before that that I remember. Last night there was a sold sign on it. So there are some deals to be had out there, and real estate is still moving in good areas. People are picking up bargains. But it will be sluggish in parts of the country.

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