What the is the fed doing buying stock for? socialistic economy?

Question

idk if anyone heard the news but the fed are going to buy out stock to save companies. does anything else think that, that could end up in a total desaster?

Answer 1

Are they going to disclose which stock they buy and how many when they buy the stock?

Answer 2

don't worry, bernanke will fly out in his helicopter and collect mortgage payments

Answer 3

same thing they did for the S & L bailout.. anybody remember that.

The republicans talked us into deregulating. So there was no oversite.

The S&L's made a bunch of bad loans, like the present situtation.

Well we can't let them go belly up can we...... so we *the taxpayers) bailed them out, wonder how much of his millions Keating got to keep during the S & L bailout??

funny as h**l .........

"1989--President Bush unveils S&L bailout plan"

George has learned well from the father.

Answer 4

The FED isn't buying stock, they are guaranteeing that they will lend FRE and FNM 2.25% interest loans. The FED should be getting warrants from these and other institutions. If such companies turn around, this would bring money to the Treasury, as the FED could exercise the warrants that grew in value from an eventual turn around.

http://www.reuters.com/article/topNews/i...

This would be a similar structure occurred when the USGov bailed out Chrysler - the deal was very profitable for the US government (tax payers). The USG actually made money. What a concept.

What Are Warrants?

http://www.investopedia.com/articles/04/...

FNM and FRE reportedly have $80 Billion in capital and $5 Trillion in mortgage loans. This is about  1 out of ever home loans in the USA.

The risk for the FED is high, but the risk of not doing this, is even higher.

If these companies were to fail, the Great Depression would look like an e-Ticket ride at Disneyland. The gov/ FED had no choice to back them up.

And now for some history for the Bush bashers.

Charles Keating Jr. was convicted of fraud in 1999 for his role in the failed Lincoln Savings and Loan.

http://en.wikipedia.org/wiki/Charles_Kea...

"One federal class action case involving 20,000 plaintiffs resulted in a $3.3 billion judgment (later reduced to $1.6 billion) against him and his former companies, for having defrauded investors."

http://en.wikipedia.org/wiki/Charles_Kea...

This would suggest he did not "make millions."

4 out of the 5 elected officials who were accused in the  "Keating Five" scandal, 4 of 5 were Democrats. The One Rep, (McCain) was determined by the Senate Ethics Committee not to pursue charges against him due to there was "no evidence against him."

http://en.wikipedia.org/wiki/Keating_Fiv...

"The concomitant slowdown in the finance industry and the real estate market may have been a contributing cause of the 1990-1991 economic recession. Between 1986 and 1991, the number of new homes constructed per year dropped from 1.8 million to 1 million, the lowest rate since World War II."

http://en.wikipedia.org/wiki/Savings_and...

Can anyone show any proof that Bush I or II had any connection or caused any financial scandal including the S&L or current housing crisis, or did something to negatively impact the economy in any way in the USA?

One should point out that AFTER the S&L scandal, one of the members in the "Keating Five" was Dennis DeConcini (Democrat, AZ). DeConcini was appointed by President Bill Clinton in February 1995 to the Board of Directors of the Federal Home Loan Mortgage Corporation ("Freedie Mac" - NYSE: FRE) - yea, the one where the FED has just offered an effective bail out.

http://en.wikipedia.org/wiki/Keating_Fiv...

and there you go.