But now, the government’s plan to “save” the economy is to “save the banks,” along similar lines to the West trying to save its banks from their adventure in the post-Soviet economies. This is the basic neoliberal economic plan, after all. The U.S. economy is about to be “post-Sovietized.” The U.S. giveaway to banks, masquerading as “help for troubled homeowners”
The Obama bank bailout is arranged much like an IMF loan to support the exchange rate of foreign currency, but with the Treasury supporting financial asset prices for U.S. banks and other financial institutions. Instead of banks and oligarchs abandoning the dollar, the aim is to enable them to dump their bad mortgages and CDOs and get domestic Treasury bonds. Private-sector debt will be moved onto the U.S. Government balance sheet, where “taxpayers” will bear losses – mainly labor not Wall Street, inasmuch as the financial sector has been freed of income-tax liability by the “small print” in last fall’s Paulson-Bush bailout package.
The Treasury will take on the bad debt that banks are stuck with, and will permit mortgagees to renegotiate their monthly payment down to 38 per cent of their income. But rather than the banks taking the loss as they should do for over-lending, the Treasury itself will make up the difference – and pay it to the banks so that they will be able to get what they hoped to get. The hapless mortgage-burdened family stuck in their negative-equity home turns out to be merely a passive vehicle for the Treasury to pass debt relief on to the commercial banks.
In the mean time, bad private-sector debt will be shifted onto the government’s balance sheet. Interest and amortization currently owed to the banks will be replaced by obligations to the U.S. Treasury. Taxes will be levied to make up the bad debts with which the government is stuck. The “real” economy will pay Wall Street – and will be paying for decades!
Calling the $12 trillion giveaway to bankers a “subprime crisis” makes it appear that bleeding-heart liberals got Fannie Mae and Freddie Mac into trouble by insisting that these public-private institutions make irresponsible loans to the poor. The party line is, “Blame the victim.” But we know this is false. The bulk of bad loans are concentrated in the largest banks. It was Countrywide and other banksters that led the irresponsible lending and brought heavy-handed pressure on Fannie Mae. Most of the nation’s smaller, local banks didn’t make such reckless loans. The big mortgage shops didn’t care about loan quality, because they were run by salesmen. The Treasury is paying off the gamblers and billionaires by supporting the value of bank loans, investments and derivative gambles, leaving the Treasury in debt.”
Good riddance to bad rubbish.
I read this woman’s depiction of her plight. In the end, she’s just another person with a sense of entitlement. She’s obfuscating her bad decision-making by cloaking her true desire/motive/agenda: she wants her bailout (handout) too.
In her update, she’s says she’s not… but c’mon! Gimme gimme gimme. Me me me me. She has a victim mentality, but that just rings hollow. At 65 years of age, she should act like a grown up. Instead she still has the inclination to rely on her daddy.
Her attitude is representative of the pigman’s disease. She wants to socialize her losses, too. If Big Daddy is bailing out them big bad banks, “why not meeeee too?”, she asks. She could try holding her breath until she turns blue? Heh. She should try living within her means (that means being able to “afford” a 30-year fixed not a 5-year I.O. with HELOC at bubble peak- c’mon!)
Life is not without risk. She gambled and lost. She over-financed in order to overpay for her home. Deal with it. Getting out of her mortgage by reneging on her contractual obligation (mortgage), while repugnant to the prudent-minded, is still (always) an option. Unfortunatley for her, this door will only open when she defaults. That will happen when she comes to finally accept the contingent penalties (fico score, etc.) as reasonable.
The other side of the coin to her story is, someone else will buy her home, at closer to its true value.
What is it’s true value?
The market establishes that.
We’re a long long way from there.
Many of the commenters see right through her.
“Why is our government penalizing the people who played by the rules and rewarding the people who didn’t?”