After AIG rescue, Fed may find more at its door

[RedEarth]

Source: Reuters

WASHINGTON (Reuters) - In one $85 billion fell swoop, the U.S. Federal Reserve may have wiped out what credibility it won resisting Lehman Brothers' rescue plea and opened its door to countless other companies to come calling for cash.

By providing a massive loan to American International Group on Tuesday, just two days after refusing to use public funds to save Lehman Brothers from bankruptcy, the central bank also invited tough questions on how exactly it determined whether a company was too big to fail.

.....

"They pretended they were drawing a line in the sand with Lehman Brothers but now two days later they're doing another bailout," said Nouriel Roubini, a professor at New York University's Stern School of Business.

"We're essentially continuing a system where profits are privatized and...losses socialized," Roubini said, adding that auto makers, airlines and other struggling businesses would no doubt be asking for government help too.

But Roubini said instead of handing out money to firms that made bad bets -- which could inadvertently encourage more risky behavior if companies think they have a safety net -- the government should be buying up mortgages and rewriting the terms so that households are not buried in debt.

Read more: http://www.reuters.com/article/newsOne/idUSN1644235820080917

[radfringe]

1. that's what happens when you start feeding wild animals...

they bring their friends....

[sfwriter]

6. So you say they are feeding the bears...EOM

[CitizenPatriot]

2. let the markets decide.

right?
'
the markets decided.

why on earth would small government, let the markets decide GOPPERS expect the govt to fund bad choices on congloms they allowed to get too big?

truth is, the GOPPERS decided and they have proven themselves to be utter incompetents. If they keep their jobs after this, I am seriously considering not paying taxes anymore.

I am not paying taxes to fund their yachts while I lost tons of money as a small investor and they lied to us about their financials and the GOPERS no oversight allowed them to do so.

Nope. I'm all done with this bs.

revolution. no taxation without representation.

go tax the corporations; that is who they represent.

[paparush]

3. My Question- With regard to the bailouts: Bear Stearns, the Macs, AIG -

Are any of these entities under any tighter regulation? Under any closer scrutiny? Meeting any higher standards of doing business?

Are any of the Management being punished? Are they keeping their salaries and benefits?

OR

Are we just pouring taxpayer money down the same rat hole that's already burned untold billions of dollars?

OH

And what about the ABANDONMENT OF FEDERAL RESERVE ACT 23A - allowing banks to use OUR DEPOSITS tohelp finance their investment banking subsidiaries to allow them to fund activities normally funded in the repo market on a temporary basis until January 30 2009.

http://www.dailykos.com/story/2008/9/16/54230/2116/741/600308

[dixiegrrrrl]

4. "Wall Street is no longer independent"

heard just now on Bloomberg,
Harvey Pitt, critic of current practices, former SEC chairman back in the days when SEC had clout, said:
" Wall Street is now owned by the bankers"
and argued for transparency and regulation.
He was cut off, too.
Bloomberg tv is doing its best to present an optimistic view.

Guess I will go back over to CNBC for financial news.

[hatrack]

5. "The best way to allocate resources in our society is through the marketplace . . " - George W. Bush

"Not through a governing elite."

He actually said that at the beginning of his first campaign for Governor in 1993. I think it was around the same time he talked about "not wanting the government to pick winners & losers", even as condemnation loomed over the landowners who had what the Texas Rangers wanted in Arlington.

Funny how that worked out - then and now.

[BRLIB]

7. Some a-hole on AP Radio "News" was saying this could lead to

more regulation, which would stifle the "free" market.
They didn't turn down the bailout, however.

If they're so big we can't let them fail(AIG excuse), as gambling addicts eventually do, maybe we should let them get no bigger than what can fit in a bathtub, so when they drown we can wash them down with piss to clean up their even worse smelling stench.

[katty]

8. "may" find more? WILL find--the soup line starts on Wall St