Even Krugman thinks it's nuts!

Despair over financial policy - Paul Krugman Blog - NYTimes.com:

Treasury will be creating — deliberately! — the functional equivalent of Texas S&Ls in the 1980s: financial operations with very little capital but lots of government-guaranteed liabilities. For the private investors, this is an open invitation to play heads I win, tails the taxpayers lose. So sure, these investors will be ready to pay high prices for toxic waste. After all, the stuff might be worth something; and if it isn’t, that’s someone else’s problem.

I think they (Geithner et.al.) know these assets are "toxic" but what choice do they have? (Obviously they should have let all those bozos declare bankruptcy - I mean to say - what choice do they have, based on their erroneous world view?)

The only choice is to create the bad bank. And to avoid too much screaming, they are doing it via a trick: by guaranteeing the bad assets rather than just buying them outright; that keeps a huge amount of debt off the books. (Sounds like Enron, doesn't it?)

Elliot Spitzer has been questioning, in is writing at Slate.com, whether the alleged crisis was real, or bullshit.

I think there's hope for America. In the old days - even 10 or 20 years ago - there wasn't enough realtime communication for enough people to call bullshit on this kind of crap. But now ... there's hope.
Read Nano-Plasm - you know you want to.

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