Federal Reserve makes indirect investment in Country Wide Financial

Cowboy Capitalism is a great thing particularly when practiced with tax dollars by the US Government. The Federal Reserve “encouraged” the 4 major banks to withdraw $500 million each from the Fed Window. That same afternoon Bank of America, one of the 4 banks, announces that it is making a $2 billion investment in Country Wide Financial, the failing sub prime lender. Let’s do some math: 4 banks * 500 million = $ 2 billion investment in a greedy failing sub prime lender.

I guess it would be too much to ask that the “smartest guys in the room” of Wall Street were held to the same notions of accountability that the normal working Joe is. Rest assured, if you are unable to make your mortgage payment you will lose your house. Your credit will be ruined and you may even lose your job. For the intelligent $100 million CEOs who practice predatory lending when they get in trouble the government provides and exit strategy.

This is not the end of the how the US government is using your tax dollars to bail out its corporate cronies. More tomorrow on China and Sub Prime Tsunami.

Tags: Government Politics China Corporate America Finance Economy Reaganomics