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The Treasury and the Federal Reserve will bail out the WHOLE American banking system. (Updated 1) – Cost to the US taxpayer? One Trillion!

Posted by Adrian on September 19, 2008

Insane.

Although we will see some rallies in distressed banking stocks as the SEC will crack down on short sellers, which again is a stupid idea. All to prop up the illusion of bull markets, which have finished.

All these ideas, or lack of grasping the reality of the free markets will do nothing, except (I know this has been said a lot) bail out the bankers and the banks, or create a socialist (for the rich) based buy up of American financial institutions- that’s it.

After the market euphoria of such a crazy idea dies down, the staggering costs to take on US banks toxic assets will come into play. The taxpayer may already be (market estimation) looking at a 500+ billion tax bill (from all the bank ‘junk’); not including a further depreciating of mortgage/debt related assets and the horrendous costs of bailing out (buying) AIG and Fannie Mae and Freddie Mac.

The 1 Trillion cost could be the estimated range of a tax payer bailout of the US banking industry.

From CNBC

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