The Fed does not have to bail out BAC, and won't be doing so anytime soon. The Fed simply provided incentives for acquisitions to take place, so as to expedite what are essentially Chapter 11 bankruptcies combined with takeovers.

Didn't Congress provide a boost to Countrywide after BAC agreed to take it? Didn't this happen with Bear Stearns and JPM?

This is not about forestalling bailouts until further down the road. This is about subsidizing acquisitions so that jobs and assets can be cut loose as quick as possible. There's a huge difference.

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Posted by LSUtoOmaha

Nashville

Member since Apr 2004

26586 posts

Posted on 9/11/08 at 11:45 pm to Doc Fenton

quote:
This is not about forestalling bailouts until further down the road. This is about subsidizing acquisitions so that jobs and assets can be cut loose as quick as possible. There's a huge difference.

Thanks for clearing this up, very important distinction. Forestalling bailouts would = bad bad idea.

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Posted by kfizzle85

Member since Dec 2005

22022 posts

Posted on 9/11/08 at 11:47 pm to Doc Fenton

You're absolutely right. It was more of a speculative quip about if BAC ever had to be bailed out. As far as I know, CFC was all BAC, and unlike BS (which I realize undermines my first post, just sayin.)

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Posted by MileHigh

Most likely a mile high

Member since Jan 2004

7920 posts

Posted on 9/12/08 at 5:53 am to Doc Fenton

quote:
This is about subsidizing acquisitions

You are right here.

but its still a bailout.

My opinion is that if they need the fed's help to make an acquisition, the value of the company is not quite low enough.

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