So, in the last week, the economy started choking on a chicken, and the government came along to perform the Heimlich Maneuver. They are expecting that these bailouts of the last week will amount to about 500 billion to 1 trillion of taxpayer money. I guess the government will be canceling Christmas this year.
Can't say I understand quite all of it. We'll be throwing a lifeline to banks and financial institutions who handed out mortgages to pretty much anyone regardless of ability to pay, and then traded those mortgages, and created derivatives of those mortgages, etc. Will the government be taking over a bunch of real estate that it will need to sell, or is it taking on something else, like mortgage derivatives, that are now worthless?
Something about all these bailouts strikes me as fishy. I just get some sort of vibe of unfairness about it all, but I suppose we needed to do it because the consequences would be even that more disastrous? Eh, I'm not sure. I don't quite understand it.
HEre is an article from the NY Times that might shed light:
Talking Business: A Hail Mary Pass, but No Receiver in the End Zone
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