Posted on 09/30/2008 6:02:00 PM PDT by baltoga
Until last week, we had applauded all the actions of U.S. Treasury Secretary Henry Paulson, Jr. His handling of the financial crisis had been flawless.
However, Secretary Paulson and Federal Reserve Chairman Ben Bernanke made a serious misstep last week when they presented their proposal to Congress. They called their plan a “bailout” and emphasized the need for $700 billion in funds.
This proved to be a public relations disaster and has been largely responsible for the delay in getting the proposal approved by Congress.
In fact, the proposal is neither a bailout nor $700 billion. Yet these are the words used by policymakers and the media when referring to the proposal. It is because of these words that so many Americans have opposed the plan, in the mistaken belief that it benefits only the Wall Street bigwigs who created the problem.
...
Here’s what this means. Wall Street has issued a variety of exotic products in recent years — auction-rate securities, structured investment vehicles, collateralized debt obligations and more — and nobody knows what these securities are worth. As a result, investors are unwilling to buy them — and this has created a lack of liquidity for the banks and other institutions who hold them.
So, the Paulson rescue plan will allow the government to buy these assets, and it will do so for pennies on the dollar. Later, when the markets stabilize and investors regain confidence that these assets are continuing to perform, the government will sell them back into the marketplace — and it could earn a potentially huge windfall in the process. In fact, it is reasonable to project that the government — and hence, American taxpayers — could earn $100 billion or more as a result of the rescue plan.
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(Excerpt) Read more at ricedelman.com ...
Coments welcome.
No, its a ransom plan. The bankers are ransoming the taxpayers, pay us more than market value for these toxic assets so taht we have confident enough to start lending money
It’s not even a rescue plan. It’s a scam to bailout the dumbass DemocRATS who caused it.
>> Coments [sic] welcome.
Okay, here’s my “coment”.
The stylin’ term “LIPSTICK ON A PIG” comes to mind.
As in calling it a “rescue” is... well you get the idea.
Propaganda and BS.
Next.
Animal Farm .... and were the Sheep
First, even the congresscritters who voted for it are calling it a bailout. Second the legislation says $700B, so it is $700B.
It’s socialism and it’s an unconstitutional power grab!!
Let capitalism and free markets work!!
The more articles I read that say all sorts of thing about how bad things are and could get, and things aren't as bad as portrayed, the more I'm convinced this is just a scam, a power grab, and I'm not interested.
If they are determined to do something, they better take their time and get it right because we're gonna have to live with it for ever.
Ya think ol’ gasbag Ric might have to answer in a Court of Law for the fact that some of his clients are in inappropriate investments and losing their shirts. Naaah. Couldn’t be.
If whatever the politicians want to spend this money on (Is that clear to anyone?) were a good investment then the private sector would be buying. Think about who is behind this: Barney Frank, Chris Dodd, Nancy Pelosi, etc.
Yesterday someone gave me this "It will be profitable line," and told me that the Savings and Loan bailout was ultimately profitable. Yeah, right!
ML/NJ
I listened to him last night and the only reason he said it needed to be passed was that “wall street was a three year old who threw a temper tantrum because they didn’t get their lollipop.”
If its a rescue plan we’re rescuing Europe!
That’s where the $630 billion went today.
Tomorrow, who knows, another $700 billion for China and Asia?
“Ransom Plan” Well said!
It’s grand theft on a scale the world has never seen before.
This bailout or rescue plan, is a draconian bureaucratic monstrosity and should never see the light of day again.
Personally I don’t think there are any investors in the private sector that can make this happen. The USA GDP is over $14 trillion per year so backing up $700 billion in assets over 5 years is a drop in the bucket for an economy that will easily generate over $60 trillion.
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