Paulson shifts course, won't buy troubled assets (The Bait and Switch Swindle Continues)

PMSNBC ^ | 11/12/2008 | Unattributed

[mojito]

In a stunning turnabout, the Bush administration Wednesday abandoned the original centerpiece of its $700 billion effort to rescue the financial system and said it will not use the money to purchase troubled bank assets.

“Our assessment at this time is that this (the purchase of toxic assets) is not the most effective way to use funds,” Treasury Secretary Henry Paulson told a news conference.

Paulson said the administration will continue to use $250 billion of the program to purchase stock in banks as a way to bolster their balance sheets and encourage them to resume more normal lending.

[snip]

Stocks slid broadly, partly because Paulson's comments at a news briefing underscored the extent of the problems in the financial system. Investors also were concerned that the Treasury will be investing more taxpayer dollars into the banking sector, which will dilute the value of existing shareholders, said Rudy Narvas, senior analyst at 4Cast Ltd. in New York.

[mojito]

The clowns are not just running the circus, they just set fire to the tent.

[Star Traveler]

Ummm..., that means they’ve seen *bigger trouble* down the road and they’re cutting loose of a prior commitment to take care of a worst disaster coming up. That’s the way I read it...

The Great Depression starts taking hold in 2009!

[seoul62]

Can someone direct me to the National Office of Pie-Outs. I want my pie now!!!!! I will go to the front of the line proclaiming: the white part of me is oppressing me and I request my reparations or pie-out, now!!!!!!/Just Asking - seoul62.....

[pissant]

In other words, “when we were selling the bailout with scare tactics of impending doom, we were really just blowing smoke out of our a**holes”

[autumnraine]

Ok then. So that means the financial CRISIS that we all heard about a MONTH ago, where the world had to stop and had to be voted on IMMEDIATELY or we were all DOOMED, hasn’t even been dispersed yet.

This is the largest scam ever made on a nation.

I feel so out of control between the zombies and the government... my life is not in my hands anymore it seems.

Still thankful I don’t live in a muslim nation, but still.

[DannyTN]

I think they should buy the troubled assets but not as face value. That does several things.

• It takes the troubled assets off the market eliminating them as a concern and restoring confidence in the ability of the banks to repay.
• The banks won't want to sell at a discount unless they really need to sell to raise cash. Therefore only the banks that really need a bailout will be taking the U.S. up on one.
• It clears the deck and limits Government involvement. Once the troubled loans have been bought up. Either the problem goes away, or the troubled loans weren't really the problem.

[The_Victor]

The clowns are not just running the circus, they just set fire to the tent.

What a fabulous visual.

[Thane_Banquo]

I want my pie now!!!!!

I recommend the french apple ala mode.

[evad]

The clowns are not just running the circus, they just set fire to the tent.

LOL..pretty good...and accurate too.

[Sir_Ed]

But, hey...look at it from their viewpoint, they shot down McCain’s chances of being elected!

Dear Leader’s first intervention, and he’s not even in office yet!

Ed

[Kackikat]

No, they’ve seen the democrats at work, and Frank would love to own millions of homes in America to make communism work. In Soviet Union they put 6 or 7 people in same apartment and if they wanted a car they had to get on a list and take what government gave them...buying houses would just expedite communism. Thank God Paulson and Bush aren’t going there. At least Preferred Stock would be able to be sold down the road if and when the market recovers.

Otherwise those homes would end up with occupants as reparations by this administration.

[jimbo123]

[El Sordo]

They appear to also has stampeded the elephants.

[Williams]

I don’t think it’s an exaggeration to say he doesn’t know what he’s talking about.

[Cedric]

Our assessment at this time is that this...is not the most effective way to use funds

Translation: Bankers said, "Go to hell, we don't want your money with all those strings attached."

[seoul62]

Good Choice and I want it top with a cheque signed by King Paulson!!!!!!./Just Asking - seoul62.....

[what's up]

that means they’ve seen *bigger trouble* down the road

Yes, the original plan was for a McCain Presidency.

Now that we have a Marxist one they are having to to tweak it for a worse downturn.

[floriduh voter]

Why can't Paulsen be fired? I know. He pushed the alarm bells to get Obama elected and now he's doing the bait and switch?

Paulsen's a crook and so's his wizard, Kaskari who worked on the Hubbell telescope which ISN'T WORKING very well at the moment.

[seoul62]

Yummy, simply delish./Just Asking - seoul62......

[ConservativeMind]

Actually, this is a better use of the money, and is what the other governments across Europe did, instead.

It keeps the companies accountable for their bad losses, but pumps in money to them while providing a potential for an upside on stocks sales later.

Purchasing bad loans without a clue as to what was in them nor how much they were worth was a terrible idea. This is better, but I'm still much more in favor of letting the stupid companies go under. Their CDS would all be null and void, then, for whatever their value was.

Also, by going under, these companies would be off the hook for their union contracts, where they had them. That's a win-win.