“It won’t cost any money!”

US Bails out major Credit Unions – Fox News

We’re somewhat used to “FDIC Friday” now – as the FDIC with its empty pockets (the fund is now $20 billion in the red) pretends to bail out a handful of the 800+ failing banks each Friday (except government or banking holiday weekends).

This Friday, the FDIC was joined in this charade by the NCUA – the agency that oversees Credit Unions. (the insurance fund is called the NCUSIF)

The NCUSIF is broke. Credit Unions were working in a similar way to banks – contrary to the ads you probably heard, your “local” Credit Union shipped their money to wholesale credit unions that did things like invested in groups of subprime mortgages in some other part of the country. Three major wholesalers for the credit unions were seized on Friday.

The NCUA is going to issue somewhere around $50 billion in bonds, backed by the “Full Faith and Credit of the U.S. Treasury” – but don’t worry – it won’t cost anyone anding. The retail credit unions will be assessed to repay the bonds, but don’t worry – nobody is actually paying that charge. With interest rates near zero percent, they’ll have no trouble absorbing a fee of 1-2% per year on the deposits.

Once the real estate market rebounds, all those worthless mortgages based on phony paperwork will suddenly be worth big bucks and the Treasury will get all its money back. And if they don’t, It’s George W Bush’s fault anyhow!