Bailout reality check: Taxpayer exposure

[Americanhero1]

The numbers are big. That much is certain.
The Federal Reserve has backstopped the purchase of Bear Stearns to the tune of $29 billion. It will loan $85 billion to insurer AIG. It's letting banks borrow up to $150 billion using risky mortgage-backed securities as collateral. And it's letting investment banks, which it doesn't regulate, get short-term loans using the central bank's discount window.

http://biz.yahoo.com/cnnm/080918/091808_bailout_tally_taxpayer.html?.&.pf=taxes

[angryChineseKahanist]

So, when no one else wants it, just pass it to uncle Sam?
Do we see other countries behaving like this?
 

[Zelhar]

There are big differences between AIG, Bear and Fannie / Freddie.

With AIG the government basically buys a good firm at a good price, most likely they will see a nice profit. If they let AIG fall then everyone will lose much more just from the hysteria that would result.

The case of Bear is a bad dill, because the government agreed to take all the bad risky assets of Bear and let JPM to by the leftovers of Bear for a cheap price with no risk attached.

Fannie and Freddie are sick puppies back they had a historic and 'implicit' government backing, so really there was no choice but to nationalize them.