Thursday, April 09, 2009

U.S. May Enlist Small Investors in Bank Bailout reported During World War I, Americans were exhorted to buy Liberty Bonds to help their soldiers on the front.
That was because we were at war, not because we had an idiot in the White House wasting the country's money.
Now, it seems, they will be asked to come to the aid of their banks — with the added inducement of possibly making some money for themselves.
It would be a foolish investment, which is why big investors are not touching it. They have seen Congress trying to control Banks and others. If they buy toxic assets, Congress is liable to then tell them they can't sell the properties, but must let people rent them at a price Congress determines.
As part of its sweeping plan to purge banks of troublesome assets, the Obama administration is encouraging several large investment companies to create the financial-crisis equivalent of war bonds: bailout funds.

The idea is that these investments, akin to mutual funds that buy stocks and bonds, would give ordinary Americans a chance to profit from the bailouts that are being financed by their tax dollars.
Mutual funds by stocks and bonds from companies that are good credit risks.
But there is another, deeply political motivation as well: to quiet accusations that all of these giant bailouts will benefit only Wall Street plutocrats.
No one should get bailouts. Prosecute the people that bundled the bad debt and sold it fraudently, prosecute the people that forced banks to make bad loans, and let the holders of the bad loans forclose on people that took loans they knew they could not pay off.

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