The Sub prime lending problems in USA have devoured 11 banks this year alone. One of the banks is my bank during my university days back in the state.
The financial catastrophe is now inflicting larger financial institution. On the 7th September the US government bailed out the two mortgage giants, Freddie Mac and Fannie Mae, in an attempt to rescue the entire housing sector from total collapse as these institutions have guaranteed half of the $12 trillion in mortgage debt outstanding in the U.S. Earlier in March the Federal Reserve bailed out Bear Stearns with forced price sale to JP Morgan Chase & Co.
The bailed out become a major debates in the financial and political circles.
Within conservative circles, most politicians and commentators recognize corporate welfare when they see it. They just downplay its true nature by giving it more palatable names, like "providing stability to financial markets" or "implementing a liquidity backstop".
Free-market zealots like those at the libertarian Cato Institute are arguing that the problem with Fannie and Freddie is that they were "socialist from the start," while others are applying the term to the federal takeover. Republican Sen. Jim Bunning of Kentucky said that when he first heard about the bailout plan, "I thought I woke up in France. But no, it turns out socialism is alive and well in America."
Does the Fannie Mae and Freddie Mac, a "socialist from the start"—that is, government entities owned and run in the public interest? They are so-called government-sponsored enterprises, or GSEs—publicly chartered, but stockholder owned. They are run as private corporations, with an army of lobbyists to advance their interests, but with "implicit" federal backing. As Prof. Paul Krugman puts it, "This implicit guarantee means that profits are privatized but losses are socialized. If Fannie and Freddie do well, their stockholders reap the benefits, but if things go badly, Washington (the government) picks up the tab. Heads they win, tails we lose." That is the tenet of the BN/UMNO government …just take a peek at our governement privatization projects that the government have to take over.
By Monday morning, the financial world received another jolt.-one of the oldest and largest investment bank –the 158 year old Lehman Bros file for bankruptcy and Merrill Lynch, 94 years old and financially in distress agreed to sell itself to Bank of America Corp. for $50 billion.
From five New York-based investment banks that dominated Wall Street for so many years have been reduced to two: Goldman Sachs Group Inc. and Morgan Stanley.
Since New York i.e Wall Street has been the domineering investment/financial centers of the world, the five investment banks were the premier players in the world financial market. The sheer greed and arrogance of these American capitalist has inflicted on itself. The fall will not halt because in the next coming months there will be more bank failures in US and AIG, once of the largest insurance company in the world is feeling the heat from the sub prime problem.
Since New York i.e Wall Street has been the domineering investment/financial centers of the world, the five investment banks were the premier players in the world financial market. The sheer greed and arrogance of these American capitalist has inflicted on itself. The fall will not halt because in the next coming months there will be more bank failures in US and AIG, once of the largest insurance company in the world is feeling the heat from the sub prime problem.
We saw the fall of the East German Wall, the fall of the Soviet CCCP, and now the fall of capitalist America.
What I am waiting is the fall of the greedy and arrogant BN/UMNO.
What I am waiting is the fall of the greedy and arrogant BN/UMNO.
The Fall season is approaching in the Northen Hemisphere.
