Bailout plan 2.5

http://www.nytimes.com/2009/02/10/business/economy/10bailout.html?pagewanted=1&_r=1

Mr. Geithner largely prevailed in opposing tougher conditions on financial institutions

Cause who needs tough conditions for tax payer money.

He resisted those who wanted to dictate how banks would spend their rescue money. And he prevailed over top administration aides who wanted to replace bank executives and wipe out shareholders at institutions receiving aid.

Cause the people in charge have done so well so far.

The Fed will use its balance sheet to provide the financing, and the Federal Deposit Insurance Corporation might provide guarantees to investors who participate in the program

So we are going to leverage (Borrow more then we have) the Fed and let the FDIC write insurance.

A separate $50 billion initiative to enable millions of homeowners facing imminent foreclosure to renegotiate the terms of their mortgages is to be announced next week.

Let's try more of the same that has not worked.

The White House is hoping that its rescue plan will be perceived as a more coherent rescue effort than the Bush administration’s,

Cause more of the same is coherent right?

Abandoning any pretense about limiting the moral hazards at companies that made foolhardy investments, the plan also will not require shareholders of companies receiving significant assistance to lose most or all of their investment. Some officials had suggested that the next bailout phase not protect existing shareholders.

Cause we trust these guys right?

Finally, while the administration will urge banks to increase their lending, and possibly provide some incentives, it will not dictate to the banks how they should spend the billions of dollars in new government money.

Cause the listen to us right?

And for all of its boldness, the plan largely repeats the Bush administration’s approach of deferring to many of the same companies and executives who had peddled risky loans and investments at the heart of the crisis and failed to foresee many of the problems plaguing the markets.

So we are going to continue what Bush did?!!?!? WTF?

There is no market value for most of those troubled assets because they are not trading. Investors want to buy them at the lowest price possible, but banks want to avoid selling them at rock-bottom prices and realizing huge losses.

And this plan does what for that? Oh right nothing.

So in the end we are getting more of the same. I am speechless. Obama basiclly picked a bush economy guy and is letting him run the show. I am sure this will work out fine.....


http://www.nakedcapitalism.com/2009/02/geithner-bank-bailout-plan-fiasco.html

A second opinion from naked capitalism