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Planet Money Blog
We are asked to believe that bad sub-prime mortgages are the source of our current financial problems. At last check the government is loaning out nearly $900 billion. If we assume that there are many as 5 million bad mortgages, which seems high to me, then the US tax payer is guaranteeing $180,000 per bad mortgage. While a number that high might make sense in a few areas of very expensive real estate (think NY, LA, SF, and Boston), it doesn't make sense country wide.
It seems to me that what's really happening is that the large institutions being bailed out have been mis-managed for a long time and are taking advantage of the current climate to hide their real problems. It would also seem that their accounting practices are eerily similar to those of Enron. Whose responsibility is it to look into these sorts of issues and, if needed, pursue criminal investigations?
I've subscribed to the podcast but the most recent one is from yesterday evening. Where is this one from 6 a.m. today?
@DSD -- Welcome, and thanks for listening. In general, the podcasts go up in the afternoon around 5 or 6. We're planning to include some of the radio segments, like the one on Morning Edition today, in the afternoon podcast. We're still feeling our way through this, though, so that could change.
Thank you so much for answering my question. This has really helped me understand what is occuring. I have two more questions:
1.) Isn't this government bailout the ultimate "sub-prime" loan the goverment is taking out? I mean, do we really have $1 trillon to spend on this?
2.) I remember reading or hearing somewhere that either stockholders, bondholders or taxpayers are going to have to eat this loss. Can you explain in a little more detail?
Humbly,
Dan
So, we the taxpayers will bail out the banking system. What about those individuals who made millions of dollars basically aiding and abetting this process? I did not approve sub-prime loans, or sell them to others at a profit. Why should I, and other taxpayers pay for this, and why can't we take back some of the 'ill-gotten-gains' from the profiteers?
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