Site's Grass Roots Planted in Right-Wing 'AstroTurf'

Conversion could stretch bailout fund by $100 billion

(NEWSER) - President Obama’s economic team has figured a way to keep the banks afloat without asking Congress for more money, by converting the government's existing bailout loans to common stock, the New York Times reports. The conversion plan could stretch Treasury’s fund by more than $100 billion, but it would expose taxpayers to increased risk and would be another step in the politically explosive direction of nationalization. More»

Struggling insurer gambled billions of its own money on risky derivative trades

(NEWSER) - Insurance giant AIG, already the recipient of a $150 billion government bailout to cover soured credit-default swaps, now admits it owes some $10 billion more for speculative trades it made with its own money, reports the Wall Street Journal. Those deals aren’t covered by the bailout, leaving the struggling insurer looking for ways to cover its losses. More»

(NEWSER) - Freddie Mac, the swamped mortgage giant seized by the government two months ago, asked for $13.8 billion from the Treasury today after a record quarterly loss plunged its net worth into the negative, Bloomberg reports. Sister company Fannie Mae, also under government control, said this week it might need funds beyond the $100 billion previously earmarked for each of the firms before the end of the year. More»

Experts say letting insurer file bankruptcy would have been a better, cheaper, plan

(NEWSER) - The government’s $143 billion bailout of AIG is looking more and more like an expensive example of good money following bad, as financial experts are concluding that bankruptcy would have been better for both the insurance giant and taxpayers, reports the Washington Post. AIG has burned through more than $90 billion in government funds, but AIG’s mortgage holdings continue to deteriorate—along with the value of its related holdings. More»

Those who can pay mortgages feel cheated as neighbors get aid

(NEWSER) - As the feds move ahead with a plan to help homeowners on the brink of foreclosure, others are questioning the scheme's fairness and wondering if it's ripe for abuse, the New York Times reports. “I am beginning to think I would have rocks in my head if I keep paying my mortgage," said one Connecticut homeowner in a familiar boat—he can make his payments, but he owes more than his home is worth because of sinking real estate prices. More»