Posted on 09/26/2008 5:51:19 AM PDT by TigerLikesRooster
Are we buying a $700 billion 'maybe'?
Just by seeking aid through the government's bailout, financial companies could be putting themselves at risk. And we wouldn't know for months whether the plan was working.
By Jim Jubak
What if they gave a $700 billion bailout and nobody came? It's a real possibility. And it would doom the plan to rescue Wall Street with $700 billion in taxpayer money.
All the hearings and late-night meetings have focused on how to improve the plan proposed by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke. The modifications being considered would indeed do a better job of protecting taxpayers, ensuring someone was watching while the Treasury forked out the moola and giving taxpayers some stake in the companies they'd be bailing out. (See my column "Let's not rush to blow $700 billion.")
The proposals being discussed now, like the original plan, pretty much assume it'd work for the government to buy the busted assets that now choke the financial markets -- and that all that's left to question are details like how much the government would pay and who would manage the portfolio.
Throwing $700 billion at Wall Street, everyone seems to believe, would restore confidence in the financial markets, repair the balance sheets of U.S. banks and other financial institutions, and get the great national borrowing-and-lending machine back up and running so the economy would start creating jobs again.
But the odds are no better than 50-50 that even an improved plan could accomplish that near-term fix -- to say nothing of reforming the financial markets to avoid a recurrence of this crisis or a similar one.
(Excerpt) Read more at articles.moneycentral.msn.com ...
Ping!
There are no guarantees that this or any other plan will work.
So how much reduction in risk would we be buying for the $700B? Are there cheaper remedies available? Or must we rush and sign at the dotted line, and not worry our little heads about it?
WaMu common stock being reported this morning at one tenth of a cent per share.
Guess there’s a reason they call them dudes “brokers”!!!
Seems to me this is kind of like you have a child who plays with matches and sets a small fire in your garage.
You reward him by buying him a Bic lighter and a propane torch.
* OPINION
* SEPTEMBER 26, 2008
The Public Deserves a Better Deal
By JOHN PAULSON
Under the Treasury plan the taxpayer pays the price. Under a Preferred plan, the shareholders of the firms who created the problems bear the first loss. Who do you think should pay?
Before committing $700 billion of our money, we should encourage Congress to take a few extra days to get this legislation right.
Excerpt
http://online.wsj.com/article/SB122238667352477103.html
However, this guy is also "chairman of a NY based investment firm" so I would like to know where his bets have been made before automatically signing on.
If these securities are marked to market how much would they be worth _____________ ? About 20 cents on the dollar is about right. At this time. In a year, maybe 15 cents or 10 cents on the dollar would reflect reality. All those toxic mortgages. Massive fraud. Sold to the whole world.
Shame, shame, shame . . .
Congress is being asked to pay sky high values only because Paulson set the values that way. He also expects that regardless of what happens the companies involved will never face legal consequences. Very curious situation. He wants lifetime 'get out of jail free cards' issued to all his cronies. And himself.
I say, 'No way, no how, go to jail . . .'
It’s worse Wall street is trying to shove a $700 billion dollar time bob down our throats.
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