26 September 2008
One Fourth of the Proposed Bailout Money Could Go to UK
Posted by Joy Bischoff under: World Economy .
The promises of pumping our tax dollars back into our economy seem a little suspect since this little tidbit was left out of the equation:
UK banks hold £95bn of sour assets that could qualify for US bailout plan
Britain’s five leading high street banks have as much as £95.3 billion ($175 billion) of distressed assets on their books that may qualify for the American bailout scheme.If the British banks tap the rescue fund being set up by the US Treasury and the Federal Reserve to the maximum, they could secure one quarter of the $700 billion being made available. Under the terms of an outline agreement that appeared to have been reached by US policymakers last night, Britain’s lenders will be able to use the facility.
However, the prospect that the US Treasury could pay for UK banks’ bad assets is likely to infuriate some American politicians and taxpayers, who would foot the bill. As Congress edged closer to agreeing a plan for the central bank to take on lenders’ toxic assets, HSBC appeared to be the UK-based bank best placed to benefit.
Here is a well put paragraph from Washington Post columnist Eugene Robinson:
Thus far, an objective observer would have to say that Congress has behaved well in the days since Treasury Secretary Henry Paulson delivered a three-page ransom note that said, and I paraphrase, “Give me $700 billion, or I’d hate to see anything bad happen to that nice economy of yours.”
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/25/AR2008092503603.html
The posturing I have seen from politicians in the last week does seem like blackmail. Give us our power grab or life as you know it is over. Dozens of top economists are alarmed by this plan and the large majority of Americans do not want it. Will they listen to us? I doubt it.
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