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Bove: The Fed is Bailing Out Countrywide

September 4, 2007

Tags The FedCapital and Interest Theory

Punk, Ziegel analyst Richard X. Bove argues here that recent Fed policies and pronouncement amount to a bailout of Countrywide Financial. If so, then Bernanke's Fed is similar to Greenspan's in that the latter also directed Fed policy to help Long Term Capital Management.

Bove: The Fed protected "moneyed interests and bad business policies'' and "may have certified rather than prevented a recession. By allowing bad investment to remain in force, the Fed prevents the freeing up of money for good investments.''

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