mom person
03-24-2009, 08:57 AM
http://www.atimes.com/atimes/Japan/KC25Dh01.html
Mar 25, 2009
Page 1 of 2
Down the dark path
By Julian Delasantellis
snip~
That's a little bit like the situation with the newly revealed, final US Treasury Secretary Timothy Geithner toxic asset recovery bank program. It may work. It may not. Whatever happens with its effectiveness, one thing is certain. US taxpayers are definitely going to be getting the chop, maybe you could even say they're getting it in the chops, as a result of its implementation and administration.
It has now been over a year since I advocated that the subprime and other mortgage-related debt securities that were depreciating away, as a result of falling real estate prices, in major banks' portfolios be somehow removed. (See And the band played on, Asia Times Online, March 6, 2008.)
This idea, also advocated by other economists, was ignored during the comparatively (compared with now, anyway) balmy skies of last spring and summer, but once the storm finally broke with the bankruptcy of Lehman Brothers on September 15, followed by tremendous world stock market losses as the planet's debt markets simply dissolved, it was obvious that, at last, government must address the problem.
In came then-Treasury secretary Henry Paulson, bringing to the table of whole half of a donkey in the form of his US$700 billion Treasury Assets Relief Plan (TARP). In the bitter political struggle to pass the initiative through the US Congress, the plan's supporters always claimed that it was only through the purchase of the banks' bad, frequently called "toxic" assets (now sometimes more euphemistically called "legacy" assets, as if these boneheaded loans were a treasured heirloom desk or bureau) would the boundless, pickup-driven, plasma-TV shining, bountiful future that God promised America at Sinai (the Hebrews got the second prize in terms of the Ten Commandments) be restored.
TARP was almost analogized as a sort of life preserver to be thrown to the banks, preventing them from going over the roaring Niagara of insolvency right in front of them. OK, but what if the banks would rather face the rapids than the government's rescue?
TARP called for the banks to sell the loans to the government. That implied a sales price to be agreed on to "clear" the market, a price to which both buyer (the government) and seller (the banks ) could, and would agree.
more at link
Mar 25, 2009
Page 1 of 2
Down the dark path
By Julian Delasantellis
snip~
That's a little bit like the situation with the newly revealed, final US Treasury Secretary Timothy Geithner toxic asset recovery bank program. It may work. It may not. Whatever happens with its effectiveness, one thing is certain. US taxpayers are definitely going to be getting the chop, maybe you could even say they're getting it in the chops, as a result of its implementation and administration.
It has now been over a year since I advocated that the subprime and other mortgage-related debt securities that were depreciating away, as a result of falling real estate prices, in major banks' portfolios be somehow removed. (See And the band played on, Asia Times Online, March 6, 2008.)
This idea, also advocated by other economists, was ignored during the comparatively (compared with now, anyway) balmy skies of last spring and summer, but once the storm finally broke with the bankruptcy of Lehman Brothers on September 15, followed by tremendous world stock market losses as the planet's debt markets simply dissolved, it was obvious that, at last, government must address the problem.
In came then-Treasury secretary Henry Paulson, bringing to the table of whole half of a donkey in the form of his US$700 billion Treasury Assets Relief Plan (TARP). In the bitter political struggle to pass the initiative through the US Congress, the plan's supporters always claimed that it was only through the purchase of the banks' bad, frequently called "toxic" assets (now sometimes more euphemistically called "legacy" assets, as if these boneheaded loans were a treasured heirloom desk or bureau) would the boundless, pickup-driven, plasma-TV shining, bountiful future that God promised America at Sinai (the Hebrews got the second prize in terms of the Ten Commandments) be restored.
TARP was almost analogized as a sort of life preserver to be thrown to the banks, preventing them from going over the roaring Niagara of insolvency right in front of them. OK, but what if the banks would rather face the rapids than the government's rescue?
TARP called for the banks to sell the loans to the government. That implied a sales price to be agreed on to "clear" the market, a price to which both buyer (the government) and seller (the banks ) could, and would agree.
more at link