I came across an Article on the Dow Jones ‘MarketWatch’ website, ‘Bernanke's quiet skipper makes waves’, about the New York Fed President, Timothy Geithner. The man behind the scenes of the Bear-Stearns bailout.

He has been involved in most of the financial crisis’s that have hit Wall St since the Mexican Peso crisis. He is obviously a very intelligent and capable man. However, his one domestic solution seems to be using taxpayers money to bail out the banks.

The interesting aspect to the Article was the comments made. Essentially, we have heard that ‘Main Street is sick of bailing out Wall St’, but now the comments to the Article clearly show that the average man on the street is cottoning on, and the stench of corruption and greed is turning his stomach. The banks were put in chains after the 1930’s financial debacle. Then, two generations later a lazy and fat society allowed them to be taken off (another Greenspan legacy). Guy’s, the chains were there for a reason! We can now clearly see what that reason was: corruption in its broadest sense.

Having the Fed oversee the banks was like appointing a wolf to ensure fair play for Little Red Riding Hood. Munch, munch, munch.

The comments to the Article clearly speak for themselves, they show that the average person on the street is sick of bailing out Wall St. They are worth reading and can be summarised in the following comments:

Can't this action by the fed be distilled down to two simple thoughts:
1. Privatise profit.
2. Socialize loss

Some of us have been prudently pinching pennies for years and dealing with our losses in the global labor(sic) arbitrage game with great energy and flexibility. We lived within our means, paid our bills on time and did not make foolish investments. Then we see Bear Stearns execs running off with tens of millions in compensation and the taxpayers are going to foot the bill for this mess.

LINK - Bernanke's quiet skipper makes waves
N.Y. Fed's Geithner is steering Wall Street into uncharted waters

http://www.marketwatch.com/news/story/new-york-feds-chief-steers/story.aspx?guid=%7B0D8682ED%2D74B4%2D4144%2D85FE%2DF2214455F37E%7D&dist=MostReadHome

http://www.marketwatch.com/

Couldn't have said it better myself.

Very true but few want to talk about it fear maybe?
Shares in this firm bought for $100 US sold for $2US who pays? the debt is huge.
America is buying or trying to buy its way out of a recession if it fails or not The world pays not the get rich investors.
Can America trade for profit and charge its losses forever to tax payers and consumers?
Yep we are too apathetic to question such things.
Price of fuel goes up another ten cents helps pay those bills what next?
We have banks in this country lending money they do not have and demanding blood if we default.
Pay your bills get out of debt it is common sense trouble times are ahead if not now they are bound to come, they always do printing money is no answer.

Surely the banks,super funds and other financial institiutions can't be that stupid.The sub-prime mortage debacle fed off itself over inflating house prices.How could our super funds be so stupid thus buying into this fiasco?

There must have been widespread knowledge as to the flaws in these loans and thus widespread corruption in transferring the losses to the average punter.

They are saying Aust will move into recession at the end of this year,that is why Kevin is already cutting Govt spending so hard.People are in too much debt and this recession will bite hard.

I think that Kevin is trying to bring it on early in the hope that things will be improving come the next election.This is a big risk because he could be exacabating a very dire situation.This a time when we really need a great treasurer like Peter Costello.

Lucky for the Americans they have a right to bear arms.
But as ignorence is bliss and education for all is a pretend rule
for all, the smartest generation in this world will also be the shortest lived one.

"They are saying Aust will move into recession at the end of this year,that is why Kevin is already cutting Govt spending so hard." - Arjay

Correct me if im wrong, but I was always led to believe that when faced with the threat of a recession and crises of confidence the usual course of action is for the government to spend more & go into debt, rather than slash government programs for the sake of budget balance.

Our ability to manufacture & export needs to be sexed up in my opinion, instead of accumulating copious amounts of foreign debt, I mean if your want to talk about inflationary pressures on the prices of assets including housing and shares then look at the amount of money we owe to foreign financiers. Whats with the veil of silence on the issue?

It's all B.S. really

Peachy if we are to sex up our ability to manufacture,then wages must fall significantly.I don't think that this present Govt has a clue.

Costello had a grasp of the big picture while Swan gropes for words to express his economic ignorance.Rudd is cutting back now since he knows a recession will mean Govt debt in terms of unemployment benefits and loss of tax revenue as in the Keating recession.I still think that Rudd is trying to bring it on early in the hope that things will improve come the next election.Their only hope is private enterprise since Govt is basically useless.A leaner Public Service will take the pressure off the private system that is the life blood for everyone.

The states however will have to follow suit,since they are the greatest offenders in the stakes of waste and inefficiency.Rudd must read the riot act to them particularily.Govt bureaucracy must be reduced at all levels.We have strangled private enterprise with rules regulation and legality.

I don't think that Rudd is up to the challenge,and a public that has not seen a recession for 18yrs,will not tolerate or be understanding of another Labor debacle.

Want a news flash?

Here is what every business pundit from Wall street to St Georges Tce are saying.

American Fed Reserve bailing out Bear Stearns and others can only be supported by high inflation or extreme interest rates.

You just gotta love it when those chickens come home to roost.

Oh Dear! Couldnt happen at a better time, what gluttinous fowl we have become.

Our snouts have been so busy feeding from the trough we are unaware we will be the next meal....

I think Costello and Co will gradually end up wearing the blame for much of what is yet to come as the full impact of their legacy is realised.

Selling off most of our gold reserves plus as many public assets they could made the bottom line look good for a while, but now we are in the position where the Singapore government owns more of our public assets that the Australian government does. The only way we can raise money now is through increased taxation if unemployment rises or further cuts to expenditure.

The previous flow of dividends coming in from government enterprises is being replaced by outgoing taxpayer subsidies (in the case of Telstra's service obligations for example) or increased consumer costs to maintain privatised company profit levels. (Privatisation = private wealth + public squalor?)

Add the billion or so lost on dubious currency swaps, the failure to budget for Public Service Pensions for many years plus the lost opportunities to invest in large-scale infrastructure, and it really wasn't a very responsible track record for the long-term.

Their biggest failure however, was to convince everybody that they were suddenly somehow wealthier and that encouraged the current orgy of debt and spooked many into buying into an already overpriced housing market.

I heard that it take six-and-a-half tons of coal to be dug up and exported to import one plasma TV. How much of our primary industry output has already been pre-spent?

It's going to be a bumpy ride and we may be more vulnerable than we realise.

A worthwhile thread about the international credit crisis and its effects.
Yet arjay has used it to promote a failed government and question another, both little to do with the subject.
It is true, for 11 years we spent ourselves into trouble, personal, national, and government handouts had free passage.
Our balance of trade has left us deeply in debt as a nation.
We all know of body language, it tells us of the hidden thoughts of the person we talk to.
Arjay I see the pain in your posts, the hope Labor will fail , the fear and miss use of the truth.
Any day federal Parliament sits I see it too from your side of the floor, the small rump of past days , the fear and lies are not policy's.
And they are not working.

Jeez, I just saw an interview on the ABC Web-Site that was headed, 'Economic crisis worse since WWII, Greenspan says’.

He caused it ! (helped a little by the greed of the banks and people who were prepared to borrow such preposterous amounts of money to speculate on the real estate market. We used to just call it buying our home.

Now, Greenspan advises a large hedge fund. Conflict of interest? If he is talking the market down, and he advises a hedge fund, is it time to go long?

Yes it is as bad as Greenspan says, maybe worse it will take a very long time to improve.
We may see ten years of low returns in our super funds ,this year a minus? surely?
How can it be if we borrow the money we take never truly exists? but the profit those lending it to us does?
A trip away from the normal, a day spent reading international finance news might have stopped some in real trouble, using borrowed money to invest in falling shares.

I was sent this today in relation to this issue

The Trillion Dollar Secret

http://www.cornerstoneri.com/comments/TrillionDollarSecret.htm

Thanks for the link I was not unaware of it but it was worth a read I am not prone to fear or jumping at shadows but it should frighten us all.
I have no shares but no debts only my super is exposed but that is my most important asset.
My home is mine but not for sale , but watch some say no, our supper could be worthless overnight.
I think one day the system will crash maybe it will be 100,s of years but it must fall one day.