Thanks for your comment.

well considering bear stearns did not exist at any time during obama’s presidency, i think its safe to say that uncle ben had his hands on bear.

I think I understand you here.

The basic problem with our economic policy is near-complete regulatory capture by financial institutions. Obama did not create this problem, and substantial examples exist from at least the time of the previous administration.

but what’s the bailout exactly?

Other creditors, who are being paid.

This is the same basic formula that Geithner used to bail out his personal friends at AIG.

The money, both in this case and with the grant to Goldman Sachs, is laundered through a vehicle institution (in the case of Goldman, AIG).

the fed is booking a loss on maiden lane, which is bailing out who? JP Morgan? they are also booking a loss. how are all these losses equivalent to a “bailout”?

You have to be careful to avoid being specious here. You are pretty close.

Say I was a politically powerful friend of Geithner, Bernacke, or the rest, and I had a “toxic asset” (say, a DJIA index fund). My loss should be approximately 50%. Geithner, Bernacke, etc. could arrange a loan to a debtee who owes me money, allowing me to indirectly raise capital with no strings attached from the Treasury/Fed.

You appear to be arguing that because the bailout does not exceed the face value of the amount that the financial vehicle owes me, this is not a bailout. Obviously that’s absurd. The debt from the financial vehicle is simply a means of getting me a bailout from my friends.

and how was this a “back door”?

As it’s being laundered through a third party, instead of being given directly.

but what’s the bailout exactly? the fed is booking a loss on maiden lane, which is bailing out who? JP Morgan? they are also booking a loss. how are all these losses equivalent to a “bailout”?

and how was this a “back door”? maiden lane was announced, and one can look at their balance sheet anytime one wants. doesn’t seem “back door” at all.