Sound the Alarm

Friday, after markets closed, word leaked that the Treasury will announce plans to nationalize Fannie and Freddie in the largest private bailout in our nation’s history.  Five trillion dollars of agency debt will become guaranteed by US taxpayers overnight.  Over one trillion of that bond debt is owned by foreign governments, and the rest by US and global institutions, any losses on which you will now pay for through your tax dollars.

Details are still not available, but this deal will be the biggest fleecing of the American public, for the benefit of the ultra-rich and foreign governments that has ever taken place.  If things don’t go well for the economy down the road, and there is every indication that they won’t, it could be an unmitigated disaster that results in the downgrading of US government debt and the end of easy credit for Uncle Sam.

Calculated risk has a summary of the available information here.  Write your elected officials now to oppose this plan, before it is too late.

Update: On this eve of this news, a history lesson:

From wikipedia:

The U.S. Savings and Loan crisis of the 1980s and 1990s was the failure of 747 savings and loan associations (S&Ls) in the United States. The ultimate cost of the crisis is estimated to have totaled around $160.1 billion, about $124.6 billion of which was directly paid for by the U.S. taxpayer.[1].

The Keating Five were five United States Senators accused of corruption in 1989, igniting a major political scandal as part of the larger Savings and Loan Crisis… The five senators, Alan Cranston (D-CA), Dennis DeConcini (D-AZ), John Glenn (D-OH), John McCain (R-AZ), and Donald W. Riegle (D-MI).

The Keating Five scandal was prompted by the activities of one particular savings and loan: Lincoln Savings and Loan Association of Irvine, California. Lincoln’s chairman was Charles Keating, who ultimately served five years in prison for his corrupt mismanagement of Lincoln.[3] The core allegation of the Keating Five affair is that Keating had made contributions of about $1.3 million to various U.S. Senators, and he called on those Senators to help him resist regulators. The regulators backed off, to later disastrous consequences.

McCain and Keating had become personal friends following their initial contacts in 1981.[8] Between 1982 and 1987, McCain had received $112,000 in political contributions from Keating and his associates.[14] In addition, McCain’s wife Cindy McCain and her father Jim Hensley had invested $359,100 in a Keating shopping center in April 1986, a year before McCain met with the regulators. McCain, his family, and their baby-sitter had made nine trips at Keating’s expense, sometimes aboard Keating’s jet. Three of the trips were made during vacations to Keating’s opulent Bahamas retreat at Cat Cay. McCain did not pay Keating (in the amount of $13,433) for some of the trips until years after they were taken, when he learned that Keating was in trouble over Lincoln.