The Fed ought to wade in open market operations style and buy up all that stuff. It'd make a killing and stop this. The weak tea crap they are doing instead isn't going to cut it.
For those in Rio Linda, there are two critical issues right now. One, the European banks are falling apart. Two, bankers have now read the red tape Dems added to the Paulson bill, and specifically see how unworkable (even, financially illiterate) the warrant and pay cap provisions are. And are concluding that no one still solvant is going to get a dime from it, unless tiny, and that it will not buy all the bad mortgage debt and remove it from the system --- because as written, anyone who takes the Treasury's dollar is signing away the bank. The treasury secretary can practically say "and oh, we own you", if they touch a penny.
Until the treasury explains how it is going to finesse those idiotic requirements, nobody believes they will see a dime.
“And are concluding that no one still solvant is going to get a dime from it, unless tiny, and that it will not buy all the bad mortgage debt and remove it from the system -— because as written, anyone who takes the Treasury’s dollar is signing away the bank. The treasury secretary can practically say “and oh, we own you”, if they touch a penny. “
So - what you are saying is that we are in the same spot we were prior to the bailout? Only our deficit has now skyrocketed.
sigh.
So - this is why Europe is in a panic? Or would they be in this state regardless?
No wonder the dems were smiling and acting so giddy when this turkey passed.
I agree that the warrants requirement is stupid. A lot of people were calling for it, but that’s the most “socialist” part of the whole plan, which I didn’t feel was otherwise. The whole thing is starting to look like a disaster; I still have mixed feelings about the bailout/buyout, but the execution so far is non-existent. By the time they do anything, it will either be too late or the markets will prove that it wouldn’t have mattered anyway.