Government Bailout Plan- What exactly is going on?

The past two to three weeks have of happenings on Wall Street have led to chaos in the financial sector. This article will give you insight and what is going on and what could happen next.

On Monday September 8th the Federal Government bailed out Fannie Mae and Freddie mac the two largest purchasers of mortgage backed securities in the U.S. This is very disturbing and is socialism for the rich in my opinion. The well connected on Wall Street and the shareholders will benefit not the American tax payer. Instead of wiping out the shareholders, replacing the corrupt and incompetent managers such a plan bails them out at a massive cost to middle American tax payers.

Then Lehman Brothers who has been in business for 158 years filed for bankruptcy they were one of the oldest investment banks. The largest ever announced in the United States. Bank of America executed a bold and swift $50 billion takeover of Merrill Lynch, while the fate of other brand-name financial institutions remained in doubt. Six months ago the Government gave 29 billion to Bear Stearns to help them avoid bankruptcy. But it was too late for Lehman Brothers, just to many losses due to all the sub prime and Alt-A loans. Over the past six months, the firm has lost close to $7 billion dollars because of bad bets on both the housing and commercial real estate markets.

Last week the Government announced it was lending Insurance giant AIG 85 Billion dollars! An enormous amount of money to keep them from filing bankruptcy. The company received a 2 year loan for the 85 billion in exchange for a 79% stake in the companies stock. The loan has to be paid back in 24 months, which gives AIG time to sell assets to pay the bill. This deal had to come together as an AIG Bankruptcy would have had a terrible affect on the economy worldwide.

We are clearly in unforeseen times right now. In my opinion this is bar far the worst financial crisis since the Great Depression. At the end of the day this financial crisis will be so severe and will last for several years leading to credit losses of at least 1 Trillion and maybe up to 2 Trillion dollars. Hundreds of small banks with massive exposure to real estate investments will collapse as well.

At this point the perfect financial storm of the century cannot be contained. The only light at the end of the tunnel is the one of the coming financial train wreck that is to come.

The good news is with the business that we are in there will be plenty of people out there that need are help and expertise. Now is the time to market yourself and your business to those that are looking for an opportunity. I am getting plenty new people on my team weekly and you can too!

Dan Chapman is and ex-mortgage professional and successful internet marketer who's team trains and mentors people around the world on how to become successful internet marketers. To learn more about Dan Chapman and his team of Marketing Mentors Click Here.