U.S. taxpayers to bail out Chinese bankers

[Nick at Noon]

Monday morning, when the government announces it's take over of Fannie May and Freddie Mac, it will mean the US taxpayer has agreed to bail out the Chinese banks to the tune of $350 billion. Aren't you happy to do you part ? :sarcasm:

It's called "socializing the risk and privatizing the profits".

Gary North:

"...It is going to nationalize Fannie Mae and Freddie Mac. It is going to do so in the name of the voters, but in fact it will do so because the central bank of China holds at least $350 billion in Fannie Mae and Freddie Mac debt. This will be a bailout of the biggest banks in the world: central banks....."

http://www.lewrockwell.com/north/north651.html

Nationalizing the oil wells would be a better investment for the American taxpayer.

[Turbineguy]

1. The Bush Administration has cornered the US

to where bad is better than the alternative.

[Nick at Noon]

4. Actually this particular problem was caused by the Fed

Chairman Alan Greenspan. Four administrations are responsible for that old rascal. Plenty blame to go around.

But the question now is whether Congress should step in and say something about this travesty ? I hope so.

[Bob Dobbs]

2. busholini inc makes money both ways.

Hell yes, NATIONALIZE OIL! Get energy out of the hands of busholini inc.

[FreakinDJ]

3. Fuck that !

[Wilber_Stool]

5. That's an interesting spin.

Here's the same story from the other side.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x3937473

[kurth_]

6. Don't forget who was behind this mess: PHIL GRAMM

http://en.wikipedia.org/wiki/Phil_Gramm

Banking Deregulation and the 2008 Mortgage Crisis

Later in his Senate career, Gramm spearheaded efforts to pass banking reform laws, including the landmark Gramm-Leach-Bliley Act in 1999, which served to reduce government regulations in existence since the Great Depression separating banking, insurance and brokerage activities.

Years later, critics of Gramm point out that this same legislation may have been pivotal in encouraging he corporate practices that led to the 2008 mortgage crises in America.<5>

Between 1995 and 2000 Gramm, who was the chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, received $1,000,914 in campaign contributions from the Securities & Investment industry.<6>

Later, as lobbyist for Swiss bank UBS, Gramm pressured congress ease it's restrictions on predatory lending tactics by mortgage brokers. For his efforts, Gramm received $750,000 from UBS in during a one year period starting in 2007.<7>.

[DCKit]

7. The money was worth nearly 2x when we borrowed it from the Chinese...

then further discounted by crashing stock prices, so it's not as if it's really costing all that much (20%?) to buy Freddie and Fannie back from the Chinese. Additionally, neither institution invested heavily in junk mortgages, so they are currently (IMO) undervalued due to bad press, irrational panic and a broad brush.

I realized the whole thing was a setup in 2002. Thing is, I don't know why the Chinese are going along with the scam - "Cost of doing business" is all I can figure. Unlike the U.S. corporate/government system where ever larger failures are rewarded with increasing benefits and cash, the Chinese have no problem taking heads when the party is publicly embarrassed by incompetent underlings. If they didn't see this coming, then I guess I'm among the smartest financial analysts on the damn planet.