Busted: Bankers and The Global Economy

January 18, 2009

Economic Panic: Frying Pan to the Fire

As the economy risks spinning out of control and banks continue to run up multi-billion dollar losses, the Obama administration will face tough choices with the $350 billion remaining in the bailout plan. With the bailout of General Motors by converting it to a bank holding company, some boundaries were set where corporate welfare is concerned. This has stopped most of big corporate Main Street from expecting direct government bailouts so far. There are many institutions that still want a piece of the bailout pie. The result is likely to be a shortage of bailout money.

The rumor is that the Troubled Asset Relief Program (TARP) will be used to build a “bank” that holds the toxic debt, a repository of toxicity that moves those debts firmly into government hands. The government is hoping beyond hope that at some time in the future, those debts will increase in value once the recession is in hand and the economy has returned to health. (more…)

Blog at WordPress.com.