So the Dow went up 500 points today? You don’t say? Well, if someone cut me a check for a trillion dollars, I’d pop a coil too. This plan seems a little complicated, but let’s see if I can comprehend.
Geither is going to take borrowed money, probably from China (which means it used to be our money), and buy up toxic, near worthless assets from banks so they can get those pieces of crap off their books. That’s great for the banks, but…who repays the original borrowed money? Guess who suckers? Oh, and the party doesn’t stop there. Timmy the tax cheat wants to enter into a partnership with you. Yes, he wants you share in the plan and have some of these toxic mortgages for yourself. Don’t worry, the government will leverage you out of your mind. After all it was your money to start with anyway.
Apparently, Timmy seems to think that these toxic assets may actually increase in value, and we all will make money and live happily ever after. Not everyone feels that way though. If this toxic garbage can’t be unloaded on some saps, or sap institution, then the government is stuck with it. They won’t just walk away. Those assets are coming off the books one way or another. That means we’re all stuck with it, and the banks who engaged in this buffoonish derivatives game walk away scot free, with absolutely no consequences for their actions. Anybody for round 2?
It’s complicated, and it just came out today. I haven’t perused the details, but judging from past actions, I’m not encouraged. It’s enough to make you punch drunk.