And the Beat(ing) goes On…
The subprime meltdown has claimed another victim. In this case, it’s not a homeowner, it’s the CEO of Swiss Bank UBS. Like my man Ben Folds says… It’s no fun to be The Man.
From the NY Times…
UBS was the first Wall Street firm to announce heavy losses in the subprime sector, although it was not the only brokerage firm to do so. Last month, Bear Stearns said that it would provide up to $1.6 billion in secured financing to bail out one of two hedge funds run by its asset management division that had sustained substantial losses in complex loans and securities backed by subprime mortgages.
What has this to do with The Unforeseen? It’s strangely reminiscent of the Savings and Loan meltdown which features prominently in the film. If you can, get your hands on a copy of FRONTLINE: The Great American Bailout. The episode focuses on Texas S&Ls and in fact features the Circle C development as well.
Here’s an excerpt from the NY Times Review of the program.
The program is particularly good at showing how the bailout is working, if that is the word, these days. For a look at the way the Resolution Trust Corporation goes about selling off “the empty shopping centers, the golf courses with no greens, the marinas with no water” along with $100 billion worth of securities, Mr. Krulwich visits Austin, Tex., heart of speculationland, where the Government is now “the biggest landlord in town.” He finds incompetence, confusion and possibly political favoritism, which keep raising the bailout bill to the Treasury.
One candid real estate speculator in Sacramento, Calif., tells of the bargains he has been picking up, like a brick house worth $80,000 for about $8,000. He says he would have paid more, but to his surprise his first offer was accepted. As an investor he thought, “Terrific buy!” As a taxpayer he thought, “What a rip-off!”
Now, flash forward to today… (CNN.com, April 11, 2007)
NEW YORK (Reuters) — The federal government should offer troubled borrowers hundreds of millions of dollars to bail them out of subprime mortgage loans, several leading Democratic lawmakers said on Wednesday.
“The federal government can send in an infusion of [money] to prevent foreclosure,” said Charles Schumer, a New York Democrat.
The cash infusion is needed right away and should go to both help fund community groups aiding troubled borrowers and to directly fund bailouts, Schumer said.
Don’t worry. The great news is that the Federal Reserve will be printing and dropping money from helicopters should things get too ugly.
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