Bailout : A Financial 911
Bailout: A Financial 911
When I first heard about the bailout I said no way all we are doing is bailing out these fat cats on Wall Street and the chief officers in the banks. But, while I started to research with a no on the bailout one would realize it was not just bailing out these institutions it was bailing out America it was bailing out the whole world. To try and understand how this happened to a layman like myself, when our best financial minds cannot even explain these events, that lead us to this point is like trying to explain to a newborn baby why two and two is four. You can explain it until your blue in the face and the baby will just stare at you with a blank look and cry. More or less like what we are doing today. You can explain why this happened and we will not understand stare at you and cry why. As I said I was against the bailout, there are a lot of negative consequences involved here but, the United States Government is so involved in this bailout that they have no choice but to continue the course to its end. I will try to explain why it happened in layman’s terms to the best of my understanding and show you why we need to continue.
One of the best financial minds of our time Warren Buffet warned banks and Wall Street back in 2003 that if we continued using these derivatives to hand out mortgages that they would be our “weapons of financial mass destruction”(Serwer,Sloan 34). This was all new to the industry no one listened to Mr. Buffet. The money just kept coming in he was crazy they said but was he? Not just Banks but insurance companies and investment firms saw the potential profit in these mortgages and decided to offer them as well, after all AIG was insuring the mortgages as well as other insurance companies but AIG the largest insurance company in the world also got into the mortgage business.
Now, let’s not forget Fannie Mae and Freddie Mac a government subsidized mortgage underwriter who...
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