Is this the mother of all bailouts
With all the talk about taxpayer bailouts lately, is today's announcement by Hank Paulson the mother of all bailouts.
I don't think so. I think there is so much money involved that it is now divorced from reality. And I think that the government will play hardball when spending money to buy troubled assets. After all, take a closer look at the controversial AIG deal where they spent only $85 Billion to take over 80% of a Trillion dollar company so that the assets could be disposed of in a more orderly fashion rather than allowing a fire sale that could have resulted in much more dire consequences for the world economy. While Zillions of dollars might be involved, I think those in charge will be offering to buy distressed assets for pennies on the dollar and those who are selling are probably going to be anxious to rid their balance sheets of the toxic waste that no one can properly value and consequently is close to worthless.
The program must be big enough to have "maximum impact," while protecting taxpayers, said Mr. Paulson. "The ultimate taxpayer protection will be the stability this troubled asset relief program provides to our financial system, even as it will involve a significant investment of taxpayer dollars," he said.
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