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To: James Hutton who wrote (148439)	9/20/2008 5:54:40 PM
From: patron_anejo_por_favor	Respond to of 306849

Krugman wrote a good blog on RTC2 today. The 2nd sentence nails it: krugman.blogs.nytimes.com September 20, 2008, 4:46 pm No deal I hate to say this, but looking at the plan as leaked, I have to say no deal. Not unless Treasury explains, very clearly, why this is supposed to work, other than through having taxpayers pay premium prices for lousy assets. As I posted earlier today, it seems all too likely that a “fair price” for mortgage-related assets will still leave much of the financial sector in trouble. And there’s nothing at all in the draft that says what happens next; although I do notice that there’s nothing in the plan requiring Treasury to pay a fair market price. So is the plan to pay premium prices to the most troubled institutions? Or is the hope that restoring liquidity will magically make the problem go away? Here’s the thing: historically, financial system rescues have involved seizing the troubled institutions and guaranteeing their debts; only after that did the government try to repackage and sell their assets. The feds took over S&Ls first, protecting their depositors, then transferred their bad assets to the RTC. The Swedes took over troubled banks, again protecting their depositors, before transferring their assets to their equivalent institutions. The Treasury plan, by contrast, looks like an attempt to restore confidence in the financial system — that is, convince creditors of troubled institutions that everything’s OK — simply by buying assets off these institutions. This will only work if the prices Treasury pays are much higher than current market prices; that, in turn, can only be true either if this is mainly a liquidity problem — which seems doubtful — or if Treasury is going to be paying a huge premium, in effect throwing taxpayers’ money at the financial world. And there’s no quid pro quo here — nothing that gives taxpayers a stake in the upside, nothing that ensures that the money is used to stabilize the system rather than reward the undeserving. I hope I’m wrong about this. But let me say it again: Treasury needs to explain why this is supposed to work — not try to panic Congress into giving it a blank check. Otherwise, no deal.

To: James Hutton who wrote (148439)	9/20/2008 5:55:42 PM
From: Think4Yourself	Respond to of 306849

I still like the congressman from about 10 years ago. They were holding a televised hearing about energy and he asked the CEO of an oil company: "Why don't you just drill more diesel wells?" The look on the officials face was priceless! It was like he was wondering how the Congressman had managed to survive to adulthood. My congressmen (and woman) are idiots. Suspect most everyone else's are idiots as well. Apparently no one with a brain wants that job.

To: James Hutton who wrote (148439)	9/20/2008 7:46:35 PM
From: bentway	Read Replies (3) \| Respond to of 306849

It probably really IS best to let the assholes that got us into this (Paulson, Bernanke) get us out of it. They really are probably the only ones that understand most of the ramifications and downside. Once they get us out of it, we should hang them, along with all the other perpetrators. Second thought - Screw that! Let's get the guys that were RIGHT. Fleckenstein, Roubini, Krugman - this thread could provide the list, and let THEM solve the clusterfuck.