US Tax Payer to Bail Out Bankers From DefaultLow interest credit and “financial innovation” are a deadly-combo. They've knocked the banking system for a loop, clogged the credit markets with billions of dollars of subprime sludge, and left the real estate market sprawling on the canvas. Still---even though $2 trillion of capitalization has been wiped-out from falling home prices; and even though the financial system is in a terminal state of paralysis---
no one has been held accountable.
In fact, not one trader, mortgage lender, rating's-agency official, fund manager, or investment banker has been indicted or charged with criminal wrongdoing.NOT ONE - The system operates without rules or guard rails. It's the Wild West! The system is so thoroughly marinated in corruption, that
every trace of regulatory-oversight has been removed. The SEC is little more than a public relations sham loaded with business-friendly sycophants who try to sustain the publics confidence while kow-towing to their corporate paymasters. It's a complete hoax. Last week, the Chairman of the SEC, Christopher Cox, gave a speech at the Ronald Reagan Building. He said:
"We've already launched an initiative in this area to investigate possible fraud or breaches of fiduciary duty involving collateralized debt obligations. Among the issues confronting us this year will be determining whether bank holding companies and securities firms made proper disclosure in their filings and public statements of what they knew about their CDO portfolios and their valuations. We'll determine whether brokers carefully followed suitability requirements when they sold complex debt-related derivatives that shortly afterward went bad. And in this area, as elsewhere, we'll be investigating whether unscrupulous insiders used non-public information to bail out of these securities or to sell them short, in violation of the securities laws.” ...
It may turn out to be the biggest heist of the century. Trillions of dollars were raked in on complex investments that (apparently) everyone in the industry knew were worthless. This is fraud on an industrial-scale.
And that's just the beginning. The same gaggle of investment sharpies who cooked up the subprime swindle are putting the final touches on a plan to off-load hundreds of billions of dollars of mortgage-backed slop onto the American taxpayer.
If they succeed, the country's biggest GSE's---Fannie Mae and Freddie Mac---will be crushed by the expanded debt-load and probably go belly-up within the year. Market Oracle
Paulson: New loan limit hurts GSE housing missionWASHINGTON (Reuters) - Treasury Secretary Henry Paulson on Wednesday said raising the ceiling on the size of loans Fannie Mae and Freddie Mac can buy "flies in the face" of the two companies' mission to provide affordable housing.
"Raising the loan limit flies in the face of the affordable housing mission because you can have no loan limit and they could just have the whole market. That's not what you want," Paulson told the House of Representatives Budget Committee.
He said he had agreed to a temporary increase in the loan limits sought by Democratic lawmakers as the price needed to secure a wider package of measures to lift the economy, but stressed any permanent increase needed to be tied to wider regulatory reforms.
Reuters
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