MUST READ What the so-called "collapse" of the banking system wrought:
Dec 21, 2009
Behind The Real Size of the Bailout; A guide to the abbreviations, acronyms, and obscure programs that make up the $14 trillion federal bailout of Wall Street
SOURCE motherjones.com
The price tag for the Wall Street bailout is often put at $700 billion—the size of the Troubled Assets Relief Program. But TARP is just the best known program in an array of more than 30 overseen by Treasury Department and Federal Reserve that have paid out or put aside money to bail out financial firms and inject money into the markets.
To get a sense of the size of the real $14 trillion bailout, see our chart at web site. Below, a guide to the pieces of the puzzle:
Treasury Department bailout programs
(Remember that Obama's Treasury Dept was controlled by his then-COS Rahm Emanuel---a G/S lobbyist in the WH)
Money Market Mutual Fund: In September 2008, the Treasury announced that it would insure the holdings of publicly offered money market mutual funds. According to the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), these guarantees could have potentially cost the federal government more than $3 trillion [PDF].
Public-Private Investment Fund: This joint Treasury-Federal Reserve program bought toxic assets from banks and brokerages—as much as $5 billion of assets per firm. According to SIGTARP, the government's potential exposure from the PPIF is between $500 million and $1 trillion [PDF].
TARP: As part of the Troubled Asset Relief Program, the Treasury has made loans to or investments more than 750 banks and financial institutions. $650 billion has been paid out (not including HAMP; see below). As of December 21, 2009, $117.5 billion of that has been repaid.
Government-sponsored enterprise (GSE) stock purchase: The Treasury has bought $200 million in preferred stock from Fannie Mae and another $200 million from Freddie Mac [PDF] to show that they "will remain viable entities critical to the functioning of the housing and mortgage markets."
GSE mortgage-backed securities purchase: Under the Housing and Economic Recovery Act of 2008, the Treasury may buy mortgage-backed securities from Fannie Mae and Freddie Mac. According to SIGTARP, these purchases could cost as much as $314 billion ---SNIP---.
LONG READ---go to web site to read more and checkout the shocking charts.
SOURCE http://motherjones.com/politics/2009/12/behind-real-size-bailout
1. government forces bad loans
2. banks and lending institutions develop huge amounts of bad paper
3. these institutions find a way to spread this paper out rather than shoulder all the burden when things eventually blew up
4. thing blew up
5. the federal government demonized the banks and lending institutions
6. the federal government stepped in to prevent some of these institutions from going under
7. the federal reserve spread trillions around to stop foreign entities that had bought bad paper, from going under.
Here’s who to blame...
1. a number of presidential administrations
2. a number of evil congress and senate critters
3. some bad players in the banking and lending and wall street community
I have no problem spreading the blame around, but it was our federal government that let it be known that the system was going to play fast and loose with the rules, so that people who didn’t qualify could get a home.
Then corruption spread like wildfire. Who knew?
BTW, it still is. We have papered over the same bad loans, leaving many of them in place. They will collapse at some point. And then we do this all again, and the banks and lending institutions and wall street will get the full blame.
It must be nice to be able to break all the rules and be above prosecution. No, I’m not talking about bad investment players. I’m talking about our elected representatives, who are using us for toilet paper.