“The Obama administration plans to announce as soon as today that some of the nation’s largest banks can repay billions in federal aid, but some officials caution that the show of progress is being underwritten by multiple layers of less visible government support. Through cheap loans, debt guarantees and a promise that big banks will not be allowed to fail, these officials say the government has created an artificial environment in which profits and stock prices have rebounded, helping banks in recent weeks to raise about $50 billion from private investors…. As a result, independent experts warn that the government’s relationship with the industry is entering a precarious new phase.” (Washington Post, Monday)
Privatized profits, socialized losses.
FEE Timely Classic
“Too Big to Fail” by Michael Heberling
