Reading the post immediately below, "...Looking Back on Low Interest Rates", I was reminded of this from September 20, 2008:
It appears there will be a decade long wealth transfer from savers to bankers. To reliquify the big banks balance sheets, the powers that be will let the banks borrow cheap from the Fed or at artificially low shorter term rates, then turn around and lend at higher rates to the Treasury. There is probably a carbon trading angle here too*. You just watch.
It wasn't hard to add up how much the taxpayer would be stuck with, even I could do it:
September 7...The big losers are the American taxpayers who may be on the hook for a Trillion dollars and who may see their government lose its AAA credit rating, with the increased borrowing costs that implies....
Leading up to those prognostications: On September 17th, 2008.
The country's largest thrift, Washington Mutual, was circling the drain
and would be seized by regulators on the night of the 25th.
In the previous ten days:
- Fannie Mae and Freddie Mac were placed into conservatorship on September 7, 2008
- Merrill Lynch agreed to be acquired by Bank of America to avoid a net cap shutdown on September 14, 2008
- Lehman Brothers filed their bankruptcy petition on September 15.
- AIG became a 79.9% subsidiary of the U.S. Treasury on September 16
The U.S. lost its triple A credit rating after the close on Friday
August 5, 2011. We posted on it over that weekend.
That's about as good as you are going to get from our little blog.
