Promises, promises The air goes out Our quarterly portfolio poll ReprintsRecession invites a return to financial crisis at a moment when there is no guarantee of more public money to bail out the banks.
The money is paid by member states, many of which already are guaranteeing hundreds of billions of euros to bail out countries including Greece and Ireland.
An effort to bail out Ambac with guarantees from banks foundered on the reluctance of banks to commit capital they might need for other purposes, and a plan announced Wednesday for the company to raise additional capital by selling stock was greeted with hostility by investors, causing its share price to lose nearly a third of its already depressed value in the last two days.
Unlike in 2008, when policy makers in the United States moved swiftly to bail out banks and provided guarantees to keep the financial system from seizing up, political divisions in Washington make bold action like another stimulus package much more difficult.
"Regardless of how the money is produced, it is a bailout fund that sort of guarantees in perpetuity that we will be intervening once again to bail out these big firms," Mr. McConnell said on CNN.
After all, they weren't part of the panic in 2008, which forced the government to bail out the industry with a blanket guarantee.
A few months ago I argued that the real purpose of the stability facility was not to bail out banks and countries but to guarantee the funding of the Italys, Spains, Portugals and Irelands while the euro was being reformed.
It has spent two years trying to persuade the federal government's Air Transport Stabilisation Board (ATSB), which was set up in the wake of the September 11th 2001 attacks, to bail it out by giving it $1.6 billion in loan guarantees.
Often, the only way to prevent the banks from collapsing is for the government to bail them out, by injecting new capital or guaranteeing bad loans.
C1 Airline Bailout Questioned Congress is poised to bail out the airlines with cash and federally backed loan guarantees.
