Friday, February 10, 2012
Yet Another Bailout for the Giant Banks … Homeowners Get Hosed Again
The 50-state settlement with the banks (Oklahoma didn’t sign, but supports letting the banks go scot-free) over mortgage fraud is a stealth bank bailout, according to many top observers. See this, this, this,this, this, this, this and this.
Most independent experts say that the government’s housing programs have been a failure. That’s too bad, given that the housing slump is now … worse than during the Great Depression.
Indeed, PhD economists John Hussman and Dean Baker, fund manager and financial writer Barry Ritholtz and New York Times’ writer Gretchen Morgenson say that the only reason the government keeps giving billions to Fannie and Freddie is that it is really a huge, ongoing, back-door bailout of the big banks.
Settling prosecutions for pennies on the dollar is a form of stealth bailout. It is also arguably one of the main causes of the double dip in housing.