Written by Global Citizen

Wednesday, 18 July 2007

image for Fed. to bail out failed hedge funds of Bear Stearns

Federal Reserves, under pressure from the U.S. Congress, have decided that when all that matters to solve the subprime market is few billions of dollars, it will bail the funds having maximum exposure to risky borrowers.

Confidential sources told TheSpoof.com that one board member of the Federal Reserve, in its review meeting of 17th July, to take status of the whole murky mortgage lending affairs have observed: 'The whole business of this 'fiat' money based economy is anyway murky. We have printed trillions of dollars, and continue printing that even more. We have pumped in hundreds of billions of dollars in war funding in Iraq to bring in more destruction and deaths, in homeland US and more so in Iraq. So what's the big deal in printing few odd billions of dollars to safeguard American homeowners?'

Informed people in the know-how of how the Fed. worked in such overt or covert bailout practices historically informed TheSpoof .com 'The solution is very much feasible. More so when there is absolutely no accounts on how much money the Fed. has lent to the government and how government at all can return that money back to the Fed., which anyway runs into trillions of dollars, the proposed solution can be the best solution. Crisis like the subprime mortgage crisis is very much expected when starting from the government to industries to Private Equity Firms to corporate world to retail consumers - everyone borrows to survive and consume, or even to expand. So blaming the poorer section of the society to have their dreams fulfilled in owning a home that was anyway beyond their means is not the solution; nor blaming the lenders and now allowing the hedge fund to close down is at all ethically right.'

Many also observed that with this proposed solution, Federal Reserves would be able to control some of the criticisms it received lately for failing to monitor the subprime lenders. The market believes that monitoring does not help; manipulating and bailing out does.

Internal sources told us that the proposal of the Fed. also gained ground due to the overwhelming 'Yen carry-trade' practices as encouraged by its Japanese counterpart, the Bank of Japan (BOJ). BOJ has anyway kept its interest rate at 0.5% after keeping it at 0% for years signaling that it does not charge any money to print money. Taking lead from the BOJ, Fed. now feels that what it offered to the government, that is lending money to government knowing fully well that even more good money would be poured on government after the bad money poured so far till all the money in the world turns bad money, can well be extended to the citizens as well. After all government is for the citizens; and if government can be bailed out by printing more and more money; why not allow that same principles to be applied to the citizens and corporate world.

There was minor opposition to the proposal from cautious fund managers and citizens who never borrowed beyond their means. They argue that by bailing out the failed hedge funds of Bear Sterns, government will send a signal to all of us that we can be reckless in our spending, whereas by not spending much so far and by saving our hard-earned money; we look like stupid. We also could have bought homes - after all who does not want a great life style with borrowed money that need not be paid back.

A member of the Congress however rejected the opposition to this bail-out package and stated: 'When we can spend same government money in hundreds of billions of dollar in Iraq year after year in-spite of majority of the people being against our troops being in Iraq in the interest of Halliburton, which clearly is a much more minority group than the case in hand; I don't see meaningful opposition to Fed's proposal to bail-out subprime lenders. Matter of fact is this is already being done, the question is how much covertly or overtly we do that to retain people's faith in our 'fiat' economy.'

He also added: 'In economy, it's all a matter of confidence. By bailing out the troubled mortgage players, and consumers now; Fed may have to shell out a few odd billions of dollars now which will boost the much-needed confidence in the housing market. If we further delay-dally with this proposal; a full blown crisis can not be ruled out; and in that case even hundreds of billions of dollars won't serve the purpose of regaining confidence'.

When Bear Stearns was asked on how much money they need to service their creditors on these two sub-prime hedge fund, they said 'Things are being worked out at this stage. And yes, the amount would be quite large'.

The story above is a satire or parody. It is entirely fictitious.

Do you dream of being a comedy news writer? Click here to be a writer!

Mailing List

Get Spoof News in your email inbox!

Go to top
77 readers are online right now!
Globey, The Spoof's mascot

We use cookies to give you the best experience, this includes cookies from third party websites and advertisers.

Continue ? Find out more