Government Help - It Depends Who You Are!

September 16, 2008

I've been watching with amazement how the federal government has been writing checks to keep Wall Street out of the hole it is trying not to sink into :

* Tax Rebate Stimulus Package --- $150 Billion

* Rescue Fannie/Freddie --- $200 Billion just to start

* Keep Bear Stearns from failing --- $30 Billion or so

* IndyMac Bank --- Couple Billion - who's counting

* AIG --- We'll see

The list goes on. In addition to all of this, the Fed has started lending to people and places they used to be forbidden to lend to. They do it now because no one else will. If these new borrowers recover, they'll happily pay back the low interest loans the Fed gave them, and they'll go back their million dollar life styles. If they don't recover, I guess the tax payers get to hold the bag. One of those "Heads they win, tails we loose" situations.

All of this money has actually kept the Dow from crashing. It's been trading in a fairly narrow range though this whole melt down, in the mid 11,000 range.

For someone employed in the tech industry, I remember a different kind of crash when the dot-com's popped. The Nasdaq got cut in half in about 9 months, and many companies' stock prices declined 99% or more (including my employer). It's funny how no one from the Fed came to bail us out.

-- Greg