Free market economic system, my ass. This week, the government announced another round of bailouts for the banking industry:
Two weeks after closing its purchase of Merrill Lynch at the urging of federal regulators, the government cemented a deal at midnight Thursday to supply Bank of America with a fresh $20 billion capital injection and absorb as much as $98.2 billion in losses on toxic assets..
The second lifeline brings the government’s total stake in Bank of America to $45 billion and makes it the bank’s largest shareholder, with a stake of about 6 percent.
By the way, the graph above shows Bank of America's stock price over the past year (down nearly 80%).
The government also announced that Chrysler Financial would be getting a $1.5 billon loan. And there are rumors that Wells Fargo might also need more capital. Unfortunately, there are more casualties:
The Federal Deposit Insurance Corp said National Bank of Commerce of Berkeley, Illinois and Bank of Clark County of Vancouver, Washington were closing with other banks taking over their insured deposits. In 2008, 25 banks were seized by officials, up from just 3 in 2007.
And:
Circuit City became the largest retailer to fall victim to the expanding financial crisis Friday, announcing it will shut down its remaining 567 U.S. stores at the cost of 34,000 more jobs after failing to sell the business.
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