Corporate America today wants to be left alone to grow their profits with out government interference. I don't have a problem with that. Profits are what makes the world work. What I do have a problem with is these pompass ass's wanting the taxpayers to bail out their companies after they spent too much time trying to make the snot nosed MBA Wall Street analysts happy instead of running their companies on strong business ethics and principles. It now looks like GW is going to sign the biggest corporate bailout ever for his pals while protesting that we are bailing out irresponsible homeowners. And my point on this is: I am not happy about bailing anyone. Especially the elite in Corporate America and Wall Street. Let's look at the Bailout part of this and connect the dot's to Bear Stearns, JP Morgan Chase, Wall Street, Freddie Mac and Fannie Mae. It's mind blowing.
Senate passes landmark housing bill
Now let's look at just the section on Freddie and Fannie:
Bolster Fannie and Freddie
Concerns over whether Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) will have enough money to weather future losses in the housing market sent shares plummeting in recent weeks. Since the beginning of June, Fannie's stock price has dropped 57% and Freddie's plummeted 66%. For the past year, they're both down roughly 85% as of the end of trade on Friday.
Fannie and Freddie guarantee the purchase and trade of mortgages and own or back $5.2 trillion in mortgages.
To help stabilize markets, Treasury Secretary Henry Paulson asked Congress to temporarily empower Treasury to offer the companies a backstop if needed. Consequently the housing bill now includes provisions that let Treasury over the next 18 months offer Fannie and Freddie an unlimited line of credit and the authority to buy stock in the companies.
Both critics and supporters of the Paulson plan have expressed concern that loaning or investing money in the companies could leave taxpayers with a fat bill to pay.
The Congressional Budget Office on Tuesday estimated the potential cost of a rescue could be $25 billion. CBO said there is probably a better than 50% chance that Treasury would not need to step in. It also said there is a 5% chance that Freddie's and Fannie's losses could cost the government $100 billion.
Estimate of $25 billion up to maybe $100 billion????????
Now let's connect the dot's as to why it's going to be every bit of $100 billion or more. First you have to go back to March to the original mess when the other wall street boys started spreading rumors about Bear Stearn's being out of cash. Next thing you know ole Bear is in big trouble and the CEO actually had to leave his bridge tournament to get back to NY to negotiate his bailout. How did that work. Well JP Morgan Chase put on their white hat and stepped in over the weekend to save Bear Stearns....well with their new partner the Federal Reserve and the Federal Government. JP took on $35 billion in debt from Bear but only took on $1 billion of exposure. The other $34 billion was taken by our government. And to help raise the cash guess who was authorized to purchase some of the known bad portfolio's from Bear from JP......you guessed it Freddie Mac and Fannie Mae....who now needs bailed out...who are we going to shift it to next?
All on the backs of the Taxpayer. Corporate greed on the way up and government bailout on the way down for the everyone except the taxpayer.
Now this is a great one for discussion don't you all think.