Friday, April 17, 2009

When the government takes over a bank do the taxpayers own the assets of that bank?

If we are assuming all of the losses do we also get the assets? Is the Government in the real estate business now? What happens to all the property held as collateral?


No. The FDIC immediately sells the bank to another bank.

Yes and no.

The only "assets" are debt. The government used our money to buy these bad debts because nobody else would (be stupid enough to) want them.

Property held as collateral is still in hands of where they were, government takeovers never mean investment, only forgiveness or credit expansion. Nobody gets away with debt, only criminal bankers.

The government is not in the real estate business, they're (dragging us along) in the clean up business. So there's nothing to gain for the government to bail out or rescue bad investors, only saving bad investors from trouble at OUR expense.

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