Bear Sterns Bailout

“Given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited,” - Ben Bernanke - Federal Reserve Speech - 5/17/07

Well, here we go with the government bailouts. The Fed and US government recognizes that the American people will most likely not stand for a direct bail out of homeowners, but also realize that they can get away with bailing out Wall Street through complex loan deals, interest rate drops, and financial arrangements that no average person can comprehend. It is great to know that our government is so willing to bail out these firms and their buddies who work there on the backs of the middle class of America. By continuing to lower interest rates and loan Wall Street hundreds of billions of dollars (much of which may never be paid back), the Fed is intentionally trying to get themselves out of this mess by decreasing the value of the dollar. Warm up those printing presses Bernanke, you are going to need them... I believe Bear Stearns is just a small spring shower while the big storm clouds of Freddie and Fannie are rapidly approaching. Middle class, get ready to take it in the pants as the value of our wages drops precipitously due to continued inflation on the prices of goods and services that we actually need in order to live like gas, food and electricity. We may also start to expect some nice big tax (or "fee" as Schwarzenegger likes to call them) increases to make up for our government's wastefulness and inability to plan for a rainy day. Happy times!