The pilfering of American taxpayers?

http://www.nytimes.com/2008/09/20/business/20nocera.html

"That crisis, however, was very different from this one. Most of the assets in the S.& L. crisis were real estate — which are always going to have value. And the government didn’t have to acquire them; it simply took them over and, over time, sold them. This time, the assets are complex derivatives of uncertain value that the big firms will actually be selling to the government.

But how is the government going to assess these securities — and what price will it pay for them? In many cases, these securities aren’t being sold because they are still overvalued on a firms’ books. That is, their mark-to-market price is unrealistically high. Will the government buy it at the too-high price? If it does, the firms won’t have to take additional write-downs — but it will constitute a huge, unjustified bailout of Wall Street. (More moral hazard.)"

 

It will only work if the close the insolvent banks (to stop endless wrangling over valuations) and auction off the assest to the highest lowball bider to get clearing.

 

http://www.bloomberg.com/apps/news?pid=20601087&sid=a1hr1v2FUeAg&refer=home

"Paulson would have authority to buy home loans, mortgage-backed securities, commercial mortgage-related assets and, after consultation with the Federal Reserve chairman, ``other assets, as deemed necessary to effectively stabilize financial markets,'' the Treasury said in a statement.

The Treasury would also have discretion, after discussions with the Fed, to make non-U.S. financial institutions eligible under the program."

 

But how is the government going to assess these securities — and what price will it pay for them?

It'll take about 30 seconds to asses the securities. Regarding what price it pay? Non starter, they only need to figure out to who and how to sell them. Imo, it is not like worthless paper was just created, bought and sold in the last month. Have some faith in Paulson.

 

I agree let them go BK and then sell off the remaining assets aka like Lehman's.

That's what was happening until Paulson got the call from Goldman's asking for help. Then he changed his tune to we must save them.......

In my view the financial co's should pay for this bailout mess with higher taxation e.g. user pays.

 

Try and just see this for what it is.

Firstly count back from November 4 and then break this back into weeks and weekends.

weekends.......
I say this because weekends give people two clear days to come up with a plan that might, just might survive three days and then of course after two days of debate it is the weekend again.

weeks.....
this represent the number of occasions that this group people must provide fresh information to drag the punters away from the real root cause of the problem.
Last week I felt was a roaring success because this week the 700B ball is firmly in the dem lead congress court and this cow can be milked for several days or more.

Don't under-estimate this game, just see it for what it is.

When someone banders 62T around the conversation table, 700B suddenly becomes a very small number and the recent tax rebates look like pennies on the floor.

But they all buy time .... your valuable time that is, if you are a US voting taxpayer.

regards
f9

 

What is important is that we keep loans, housing, grants available for lazy ass Americans who want the American dream but would prefer not to sacrifice for it. I know I can't wait to work a little harder and longer to help those who don't understand that taking a loan for $250,000 when you make $30,000 a year is a bad idea. I'm sure if we forgive all of their debt they won't do it again.

And for the morons who only blame Pres Bush, this is a problem both parties saw coming and did nothing about. Bush was asleep at the wheel as usual but take a look at which party was over-seeing the Fannie and Freddie collapse.

 

In all fairness ...

It was the supreme court that put George W. Bush into office - not the voters...

 

I think most acknowledge that president Bush wouldn't know even how to input text into a cell in Excel, or find his way around any technical manual...

 

http://www.nytimes.com/2008/09/22/opinion/22krugman.html

Paul Krugman:
"... the financial system needs more capital. And if the government is going to provide capital to financial firms, it should get what people who provide capital are entitled to — a share in ownership, so that all the gains if the rescue plan works don’t go to the people who made the mess in the first place."