Here's a question that seems worth asking. Just who is it that now owns all the so-called "toxic assets." The toxic assets are bonds sold to finance pools of subprime mortgages, bonds sold to finance pools of leveraged buy outs of publicly traded companies, bonds sold to finance pools of commercial real estate ventures. These bonds are "toxic" because no one wants to buy them from whoever it is that now owns them.
Waaaaaah, Waaaaaaah. Move on, cry babies. Take your losses and leave the rest of us out of it. Just because you aren't as wealthy as you thought you were really isn't a public problem---until the politicians decided to make it one.
Do you own any toxic assets? Neither do I. Who does? Whoever it is, it is their necks the Fed and the Treasury is working overtime to keep whole. Why? Don't you think that's a reasonable question? In fact, the losses due to these toxic assets have already occurred. The Fed and the Treasury cannot remove the losses. But they can redistribute the losses to you and me.
If you or I buy a financial security and its market value goes down, you or I will be the loser. That's happened more than once to me personally. How about you? Why is it that the owners of these wretched bonds called "toxic assets" are now not supposed to lose their money?
I really don't want to hear about "too big to fail" or "it would cause instability in financial markets." Those are bogus answers designed to get you and me to divert our attention elsewhere. No business is too big to fail. We already have instability in financial markets.
AIG needed to go bankrupt; it still does. Just who's neck is being saved? GM needs to go bankrupt. Chrysler needs to go bankrupt. Any financial institution that has owners' equity (called bank capital by bankers) below the legally required level needs to go bankrupt.
We have bankruptcy law and the FDIC (responsible for monitoring failing banks and getting them out of the system through asset repurchase) for a reason. Why aren't we using them? We all need to ask our local politicians these simple questions.
The sooner these bad performers are gone, with the present owners lose their investments, the sooner the economy will be on its way to recovery. Don't you wish your neck was valued as highly as whoevers' necks it is that the Fed and the Treasury are protecting with your tax dollars?
Just a question.