Sunday, September 7, 2009
Like it or not, the "interesting times" have arrived. With this weekend’s nationalization of Fannie and Freddie, and other such bailouts of a financial industry beset with self-inflicted wounds (actions I predicted some 4 years ago), we have now crossed a line.
Given that our entire banking system is insolvent, there are no financial solutions to this crisis, only political ones. The question before us now is both simple and stark: “Who is going to be left holding the bag?” This weekend, we found out with the nationalization of Fannie (FNM) and Freddie (FRE) that there is strong political, bipartisan support for making current and future taxpayers the ultimate recipients of the bag.
At times like this, I feel the need to back way up and take in the big picture, because the details are too slippery and too numerous to grasp.