Skip to comments.The Devil's Details
Posted on 03/23/2009 5:35:06 PM PDT by Kaslin
Economic Recovery: The ink on the latest bank bailout plan hadn't even dried before it was being panned on both the left and right. But if it's so bad, why did stocks rally so impressively after it was announced?
And, collectively, markets seem relieved at the Treasury plan.
After Treasury Secretary Tim Geithner released the first outline of his plan last month to derisive hoots and hollers all around, people feared the worst. But the plan that Geithner formally unveiled on Monday wasn't the worst. It might even help.
True, it could eventually expand to as much as $1 trillion in size. But it will for now limit the amounts coming directly from the government that is, you the taxpayer to about $75 billion to $100 billion. And that's from money already approved by Congress under the Troubled Asset Relief Program. That means the program can start right away without congressional action, a big plus in this case.
The rest of the cash will come from private investors, with some of the financing provided by collateralized loans from the Federal Deposit Insurance Corp. Private investors could make hefty profits from becoming the government's partners, but it's no slam dunk.
(Excerpt) Read more at ibdeditorials.com ...
Or they could lose their shirt.
Like they did with Fannie Mae and Freddie Mac?
I guess I’m not “sophisticated” enough to understand this.
Can someone more knowledgeable than me (some would say that is all other FReepers :) explain why a private investor would want to buy a bunch of toxic assets. If they are toxic, who would want them?
IBD writes great editorials most of the time but this is not one of them. No private investors are going to pay $ 900 billions out of one trillion dollars as IBD is saying. It is lunacy to believe so. All this money is coming from us the tax payers and from printing more money.
It is a bad joke and only fools will believe it.
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