Well, there's a fine way to thank the U.S. government for its trouble: Bloomberg reports that investment banks may be packaging high-risk corporate loans into securities to use as collateral for borrowing from the Federal Reserve.
You might recall that the Federal Reserve last month opened its discount window for borrowing money at cheap rates to non-banks for the first time since the Great Depression. It was a radical step, aimed at easing the credit crunch and unlocking the markets.
Remember, folks, where does the Fed's money come from? Our taxpayer dollars. And what happens if the junk loans (aka. "Big Shitpile") go into default after they get turned over to the Fed?
If I had to guess, I'd say the financial institutions who used them as collateral will say to the Fed, "Actually, we're gonna pass on the whole 'paying you back' thing. You can keep our 'collateral.'"
And that, my friends, is the story of how we bailed out the banks and financial institutions who spent the last decade yoking us to permanent, crushing debt.
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