"Bailout Bonds"? Really?

[girl gone mad]

Something about this idea makes my stomach turn, and it isn't just because the same banks that created this mess and are now getting bailed out with our taxes will be raking in fees from selling bonds to the same taxpayers who are bailing them out.

My grandparents bought bonds to fight Nazis. I'll get to buy bonds to save corrupt bankers. The phrase 'jumped the shark' springs to mind, or maybe, 'oh, how the mighty have fallen'...

From the http://www.nytimes.com/2009/04/09/business/09fund.html?ref=business">NY Times:

U.S. Imagines the Bailout as an Investment Tool

During World War I, Americans were exhorted to buy Liberty Bonds to help their soldiers on the front.

Now, it seems, they will be asked to come to the aid of their banks — with the added inducement of possibly making some money for themselves.

As part of its sweeping plan to purge banks of troublesome assets, the Obama administration is encouraging several large investment companies to create the financial-crisis equivalent of war bonds: bailout funds.

The idea is that these investments, akin to mutual funds that buy stocks and bonds, would give ordinary Americans a chance to profit from the bailouts that are being financed by their tax dollars. But there is another, deeply political motivation as well: to quiet accusations that all of these giant bailouts will benefit only Wall Street plutocrats.

The potential risks — politically for the administration, and financially for would-be investors — are considerable.

The funds, the thinking goes, would buy troubled mortgage securities from banks, enabling the lenders to make the loans that are needed to rekindle the economy. Many of the loans that back these securities were made during the subprime era. If all goes well, the funds will eventually sell the investments at a profit.

But, as with any investment, there are risks. If, as some analysts suspect, the banks’ assets are worth even less than believed, the funds’ investors could suffer significant losses. Nonetheless, the administration and executives in the financial industry are pushing to establish the investment funds, in part to counter swelling hostility against the financial industry.

Many Americans are outraged that companies like the American International Group paid out many millions in bonuses despite crippling losses and multibillion-dollar rescues from Washington.

[rucky]

1. Bonds to hedge against the hedge funds that hedged against

the bonds that backed risky borrowers.

Maybe they'll make a hedge fund for that, too?

[Nay]

2. This is like getting robbed at gunpoint, and then the robber telling

you "If you give me a blowjob, I'll give you a dollar out of the money I just stole so you can catch a bus home."

I can't imagine any individual investor going for this, but you can bet yer ass a bunch of institutional investors are going to put a bunch of innocent taxpayer/investor's money in it, for fees.

[marketcrazy1]

3. absolutely disgusting!!!!

the GALL of these fuckers!! like this is some big favor, cutting us in. FUCK YOU! YOU FUCKING THIEVES!!! I cant wait to read all the posts about how this is such a great thing. like P.T. Barnum said, there`s a sucker born every minute!!!