Government Regulation Gone Amuck, Three More Examples in One Day: No. 5 is Banking
In this WSJ article by Damian Paletta, we learn that banks are turning to the federal government, i.e. us as taxpayers, to bail them out of their mistakes. Credit Suisse and J.P. Morgan Chase are both proposing that the government step into this mess and save their butts.
And of course the bonuses their "mistakes" incurred have already been paid, nonrefundable.
They are worried, among other things, that in trying to help homeowners by writing off a portion of subprime loans, "they [the banks] might be sued by investors who hold mortgage-backed securities [i.e. the creditors who actually hold the debt]. However, if the industry came forward with a standard backed by the Treasury Department, the legal concerns would likely fade."
In other words, when you're about to break your contracted word and you're scared of the repercussions, look for a big thug with a gun.
[Thanks to hitman2.com for the image.]
The second thing they want the government to do is to guarantee the bad loans with taxpayer money. Do you and I really want to pay up when some homeowner who (knowingly or unknowingly) got in over his head decides to walk away from his house?
If you ask me, forcing us innocent bystanders to pay for the bad bets of investors, bankers, mortgage brokers and naive or greedy homeowners, is tantamount to embezzlement, racketeering, and tutti quanti.
Wake up, people. Your representatives in the legislator are about to steal your money, and they don't even have to put a gun to your head.
See my next post for Example No. 6.