To clarify the bailout of Fannie Mae and Freddie Mac is more at taxpayer expense than the bailout of Bear Stearns was. The reason for this is that the bailout of the two FMs was an act of congress to allow the treasury department (a government entity) to purchase stock in the two FMs amongst other things. Yes to do that the government will probably have to borrow money from foreign countries but it is the tax payer that will end up repaying that loan eventually so this bailout is directly at the tax payers expense.

The bailout of Bear Stearns was done by the Federal Reserve (a private bank, NOT a government entity) where it made money available to save Bear Stearns. The money that the Federal Reserve creates is fiat based which is a fancy way of saying it's based on nothing. The Federal Reserve can create US Bonds at their discretion which are then bought by anyone (you, me, foreign governments). The more bonds out there the lower our dollar is worth, which is how they can claim that that bailout was at tax payer expense because we are paying for it everytime our dollar is lower in value.

An intelligent response.   
Perhaps we should say "Drop Dead" creditors in paraphrasing Ford's remark to New York in financial straits.

Not so much "drop dead" but rather "you made your bed now lie in it."

Ford never said that - the NY Times said it.

When we fight a war on several fronts costing billions- to - trillions of dollars, fail to fund ourselves through taxation, de-regulate lending institutions and look the other way as greedy dogs lasso consumers, then sell off the paper, we deserve what we get.

 

See ya.

Perhaps you're right--Ford might not have put it that bluntly as did the New York Daily News.


Right on, brother.

My mistake - the Daily news - and yes, he never put it that bluntly.

The same can be said for consumers who buy what they can't afford, spend money they don't have, put wants over needs and then expect the Gov't to swoop in like Superman to the rescue and save them from impending financial doom. We deserve what we get.

Just goes to show the Gov't is not the only one going around making stupid decisions.

But Freddie Mac and Fannie Mae hold all those mortgages that all those poor, financially ignorant, unable/unwilling to read a contract people decided they can't pay (and would like the taxpayer’s assistance to keep them in those homes)! The democratic led congress will not stand for anyone losing their home, especially if those people are a large part of its base and it might cost votes. No personal responsibility that should be this congresses motto. In the wild there is a process of natural selection, here in the civilized world we sustain and celebrate stupidity, then scratch our heads and wonder why it is on the rise, go figure. 

Cruiser: That's all we need millions more to the homeless list.  

Wall Street would collapse without the credit industry. The whole point of the financial market is to toss bones to the have-nots.

Just because you shouldn't have gotten a mortgage in the first place doesn't mean that you end up homeless, there are things called apartments. I mean these people weren't homeless before so why should they be homeless afterwards. They simply need to live in a place that's affordable. There is no reason why someone pulling in $30K/year should be buying a house that costs $300K, the math just doesn't add up to being affordable.

Ever try to rent an apartment with a lousy credit rating?

Bail outs are bad, period. LIfe is not a guarantee, they are called "risks" because you can fail. And this one is as bad as it gets. A lot of people have alraedy failed, and lost their homes. This will do nothing for them. SO it is the luck of timing, and this is supposed to be good? I dont think so.

The companies will be bought and the stockholders lose - but that is the risk of investing in stocks versus a safe CD. Borrowers who are being taught there is no downside, will learn to make even stupider investments in the future. Put simply, this is anotehr feel good issue that has no up side, just a big downside.

But whose fault is it that the persons credit rating is low? Why should I have to pay for someone elses mistakes? I never said it wouldn't be difficult to find housing, just not impossible.