Oh yeah, so who’s badmouthing the old US of A now! Our creditors must be amazed. We didn’t know you had that kind of collateral, they have got to be saying! Well, surprise; we didn’t’ either.
It has been well over sixty years since the Federal government called all of the banks and the financial investors together and laid out the rules of the Glass-Stegall Act. It basically said, you can be a bank and we will back you with all we have so that the American depositor’s money is safe. Or if you want to make investments and reap whatever benefits you can on your own you can do that as well but you do it without our backing. And so it was; at least until the era of deregulation. Talk about a policy that has come back to bite us on the rear!
Suddenly the lines got blurred a bit. A bit is to put it modestly. Investors offered you a bank account. A bank account backed by the Feds! Wow. So are my investments backed as well? Well, not really, but yes really. In a world of double financial speak that means yes to you and no to the investment banker. Yet in a world where people are crying no one told them what “ ARM ,” means when it comes to their mortgage, it just seems like one more complaint of mis-advertising to be investigated by the next administration!
We can add this to the people investigating, price gouging at the gas pumps, who approved the bridge to no where, who approved the bail outs, and a host of other complaints which stretches out unto the horizon.
So far this week, some have been granted bailout status, while others have been denied the free hand up and out of jail card. The cast of those saved is lengthy. Bear Sterns 29 billion, AIG 85 billion, and Freddie and Fannie 200 billion. Not everyone has gotten help and Shearson got sent packing on Sunday night. That of course means that quite a few employees got the ax as well. One has to wonder what the criteria are to get saved by the good Uncle.
The crisis is far from over. The average citizen has no idea how much is left to bail who out. Nor why some are getting bailed out and others are getting gobbled up or put out of businesses. The President in his usual right on top of everything manner has announced the system just needs a small adjustment. The McCain group says everything in the economy is fundamentally sound, which sounds like more of the same. The Obama group sees the problem and understands how we got there, but has yet to be very convincing as to how we are going to get the patient off of life support and functioning again.
Seems that there is little you or I can do, but listen as our financial system cries Uncle, and hope there is enough of Uncle to go around. And it is a woeful cry at that!