Utdrag:
The news of today is the Geithner plan. I think this plan might work very well in terms of repairing bank balance sheets.
Of course the whole notion of repairing bank balance sheet is a lie and misdirection. The balance sheets we should want to see repaired are household balance sheets. Banks have failed us profoundly. We want them reorganized, not repaired. A world in which the banks are all fixed but households are still broken is worse than what we have right now. Too-big-to-fail banks restored to health are too-big-to-fail banks restored to power. The idea that fixing legacy banks is prerequisite to fixing the broad economy is a lie perpetrated by legacy bankers.
I think that critics of the Geithner plan are missing some of its tactical brilliance. My guess is that behind the scenes, Geithner has arranged a kind of J.P. Morgan moment. You know the story. During the Panic of 1907, J.P. Morgan locked a bunch of bankers in a room and insisted they lend to stave a panic.
Gaius Marius kommenterer (blant annet) samme artikkel i PPIP bids and the geithner put, men er, som alltid, litt mer skeptisk... han påpeker at det ikke er nødvendig å postulere noen konspirasjon:
but the reality is that you don't need to get anywhere near such conspiratorial fraudulence to posit inflated bids because the embedded put option of non-recourse finance will support unrealistic bids. nemo at self-evident illustrates how, over a series of deals of varying value, overbidding on price is a reasonable outcome that realizes a high probability of investor return and guaranteed losses for the provider of leverage, ie the FDIC. [...]" The bank unloaded assets worth $5000 for $8400. So the private investor gained $100, the Treasury gained $100, and the bank gained $3400. Somebody must therefore have lost $3600…
…and that would be the FDIC, who was so foolish as to offer 6:1 leverage to purchase assets with a 50% chance of being worthless. But no worries. As long as the FDIC has more expertise in evaluating the risk of toxic assets than the entire private equity and banking worlds combined, there is no way they could be taken to the cleaners like this. What could possibly go wrong?"
En kommentar hos Ritholz siterer et intervju med Stiglitz:
The US government plan to rid banks of toxic assets will rob American taxpayers by exposing them to too much risk and is unlikely to work as long as the economy remains weak, according to Nobel Prize-winning economist Joseph Stiglitz.
“The Geithner plan is very badly flawed,” Stiglitz said [...] “Quite frankly, this amounts to robbery of the American people. I don’t think it’s going to work because I think there’ll be a lot of anger about putting the losses so much on the shoulder of the American taxpayer.”
Vi tar den en gang til: "Quite frankly, this amounts to robbery of the American people".
Hørte jeg noen si "bankster"?
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