Think We're Not In Trouble???

Go down

Think We're Not In Trouble???

Post by KaptainSteve on Wed Apr 02, 2008 11:02 am


Think we're not in trouble, huh? Think again. This is an unedited (except for italics and boldface by me) cut and paste from a yahoo news article.



The Fed has taken a series of extraordinary steps in recent weeks and months to prop up the nation's financial system, which has been in state of high jeopardy.

In a controversial move, the Fed backed a $29 billion lifeline as part of JP Morgan's deal to take over the troubled Bear Stearns, the nation's fifth largest investment house, which was on the brink of bankruptcy. Bear Stearns had invested heavily in risky mortgage-backed securities that eventually soured with the collapse of the housing market.

Bernanke defended the move. "With financial conditions fragile, the sudden failure of Bear Stearns likely would have led to a chaotic unwinding of positions in those markets and could have severely shaken confidence," he said. "The damage caused by a default by Bear Stearns could have been severe and extremely difficult to contain."

Although the taxpayers are on the hook for the $29 billion, Bernanke said he was "reasonably confident we'll be able to recover the full amount." He also said that Bear Stearns' investments that the Fed took control of "are entirely investment grade."

In addition, the Fed — in the broadest use of its credit authority since the 1930s — agreed to temporarily let big investment firms obtain emergency financing from the Fed, a privilege that previously had been granted only to commercial banks.

Those actions have prompted criticism from Democrats and others who contend that the Fed is bailing out Wall Street and putting billions of taxpayers' dollars at potential risk. Bernanke and the Bush administration argued that the actions were warranted to avert a potential meltdown in the entire financial system, something that would have devastating consequences for the overall economy.

Source Yahoo News Article


_________________
The Law in HMTL or in .pdf for printout

avatar
KaptainSteve
Moderator
Moderator

Male
Number of posts : 165
Age : 56
Location : Hooterville, USA
Registration date : 2007-12-27

Swamp-Ass
Swamp-Ass Master:
40/40  (40/40)

http://www.swamp-ass.com

Back to top Go down

Back to top

- Similar topics

 
Permissions in this forum:
You cannot reply to topics in this forum