The UK taxpayer has been raped by the incompetent stooges running their government, who have now bailed out failed bank Northern Rock for £55 billion and counting, even though the taxpayer never had a say in this slippery slope disaster. Yes, that's £55 billion and counting. That's more than the annual education budget for the nation. And it didn't have to be.
When a bank makes stupid decisions, the bank should fail. Period. When depositors deposit more than the protected amount in a bank, and the bank goes tits up, the depositor should lose his money. The rules going into the game were clear. When the government changes the rules mid-game, credibility dies and moral hazard skyrockets. And that's where we are now, since we're run by monkeys, and it's just gonna get worse.
Meanwhile, the US taxpayer in on the hook now for hundreds of billions at the FHLB, an institution with an implicit taxpayer guarantee who's pissing money away to the likes of soon-to-go-bankrupt WaMu and Countrywide at an alarming rate, and the taxpayer will end up bailing out all of 'em.
And then there's Fannie and Freddie, who stand to lose TRILLIONS before the smoke clears. And again, even though there's no law that says we have to, the US taxpayer will end up paying.
There should be outrage. There should be investigations. There should be a media storm. There should be PANIC.
(sound of crickets chirping)
At least you know what's happening HP'ers, and what's going to happen. Lot of good that'll do you, but at least you know.
At the stroke of a pen, the Government has again weighed into the catastrophe at Northern Rock.
In its latest move, it is offering banks who lend to the beleaguered mortgage lender in the wholesale market an open-ended guarantee that they will not lose any money.
This extraordinary action, which makes the rescue of Northern Rock the most expensive in financial history, came on the day that the Bank of England made it clear that the £55 billion-plus bail-out is part of something much worse.