Whatever you thought you knew about the 2008 bank bailout is wrong…

…because the reality is over 10 times worse than what was made public at the time. In fact a total of $7.7 trillion in loan guarantees and lending limits were issued by the Fed, which makes TARP seem like a trifle in comparison.

The Paulson Trillion-Dollar Bonanza: What’s Not to Like, Part III

I’ve been giving some thought as to the actual value of continuing with this series, because a)over the weekends the bailout proposal has changed considerably, and as of the time of my writing this this newer agreement has already been turned down by the House of Representatives. Continue reading “The Paulson Trillion-Dollar Bonanza: What’s Not to Like, Part III”

I guess I’m not alone in thinking this!

Here’s an interview excerpt (with context) from Bert Ely, a credentialed American banking expert, who shares my (and Denninger’s) opinion that Paulson’s mega-bailout just isn’t necessary.

The Paulson Trillion-Dollar Bonanza: What’s Not to Like, Part II

Yesterday I wrote at some length about how the US economy has gotten to the point where Paulson and Bernanke decided it would be worth spending 5 hours promising Congress gloom & doom unless they got a record-busting bailout measure passed. So, why not like this (theoretically) $700B plan to “save the markets”? There are a number of reasons, which I shall put forward here. For reference, here is the draft proposal for the bailout so you can follow along.

Continue reading “The Paulson Trillion-Dollar Bonanza: What’s Not to Like, Part II”

Tough times for bond insurers.

This is definitely not a good time to be in the bond insurance business. With large-scale insurers Ambac and MBIA — and with smaller players faring no better — one could well think that in the end the lending crisis has brought to light considerable flaws at the very basis of the American — and indeed global — financial sector. (all links above except the first lead to 6-month stock charts).

Continue reading “Tough times for bond insurers.”