Bublicious Fed And Countrywide

Two major things that caught my attention were the fed efforts to "prop-up"/"bail-out"/"fix" the banking sector and the credit crisis (whatever we like to call the creature these days) and Countrywide's debt ratings and holders. On the first one, someone asked me when the fed would be done last week and I said "soon"... the reason being not that the "crisis" is going to be over soon but the fact that they'll be broke. The fed has so far since August 2007 spent around $600 billion from their strategic budget and amassed all kinds of junk. They have another $200 billion to throw at the problem before asking for more funds to help "prop-up" markets. Eventually they'll be asking the congress and the tax payers for some more "funny" money [in some way, shape or form]. A couple of days back I glanced at the I-Bond's and was surprised to find out the fixed rate had been pulled to 0.00% so it's quite an achievement for the Bernanke fed and looks like they don't want to raise any money from the tax payers ... why would I like to give money at a fixed rate of 0.00% to the treasury???

Countrywide case is even more hillarious. When BofA decided to take over Countrywide (looked like another fed orchestrated "bailout") ... someone said to me ... now all the countrywide debt holders are safe to which I did say... that is not the way things work here in America ... the person didn't believe me at first when I said.. BofA will take the assets and leave the debt in countrywide and bankrupt countrywide [that's what is going to happen to it] - the heart and soul of the subprime toxic junk was countrywide so it will have a lot of junk which can even eat up BofA.... Now that's becoming more of a possibility and a likely strategy that BofA might do. Countrywide's debt holders will just be able to hold on to a piece of history and that's all it will be worth.