BAILOUT: The fix was in...

This BCP post from February is going into the I told you so file. All the hoopla about the administration officials coming up with this plan to buy up the toxic mortgages and bad sub prime debt and make us U.S. taxpayers pay for it is a bunch of B.S. The fix was in many months ago as I correctly predicted in February. It always seemed curious to me why the Bank of America would buy a failed mortgage broker like Countrywide with all it's bad sub prime debt. The answer is now clear Bank of America had a plan to unload that bad debt from the Countrywide purchase on us taxpayers from the begining. With the recently announced plan to have the government spend 700 billion dollars to purchase these subprime loans it looks like they succeeded. Here is exhibit A from my Post in February 2008:



"Bank of America, which is in the process of acquiring Countrywide Financial and has potentially huge exposure, has circulated a proposal to create a new federal agency that would buy vast quantities of delinquent mortgages at a deep discount and replace them with fixed-rate federally guaranteed loans."-New York Times 2/2008



That sounds very similar to what is being railroaded in in Washington this week. Just remember I told you so.

Bernake & Schumer's B.S. solution

From the Washington Post:


"The economy is likely to slow through the first half of 2008, Federal Reserve Chairman Ben S. Bernanke said yesterday, as members of Congress called on him to take aggressive action to prevent a worsening mortgage crisis."

I have to dissagree. Like rewarding illegal immigrants with driver's licenses you do not correct bad behavior by bailing out the banks and those who got sub prime loans with a bailout as Washington seems intent on doing. Here is exhibit A:

"Among other steps, Schumer said, Bernanke should move quickly on a series of regulatory policy changes to prevent banks from making irresponsible mortgage loans and use his stature to convince the Bush administration to provide federal money for nonprofit organizations that help people with mortgage problems."

Schumer is wrong in following in the footsteps of George Bush by trying to funnel taxpayer money to these "non profit organizations". Anytime taxpayer money money gets further away from the government there is less oversight and is more open to abuse no matter how noble the idea is.