[quote=CA renter] Since we, the taxpayers, get to pay the banks’ wishing prices, the govt will probably “discover” after-the-fact that they really weren’t worth that much after all.
So…the banks get rid of their bad paper at their wishing price, the govt (that’s us) overpays for them, then they will be resold back into the private market at their true market price (much less than what we paid for them).[/quote]
I wouldn’t blame anyone for thinking this, but watching Paulson last night, I got the impression some Senators where asking the right questions, about how to establish the correct price in the so-called reverse auction.
Paulson doesn’t inspire confidence, but that may be just a personal prejudice, and Bernanke seems to play his cards close to his chest. The question that we are all dying to hear the answer to is; what is the consequence of no bail-out? Presumably, the reason we are being denied this, is because of the “run” it will have on those institutions as they are named. What is just as troubling is the push to rush this through, when really something like this needs to be very thoroughly debated.
The tax payer does of course have one recourse, and that is don’t pay your tax. Or maybe we should just dump all these toxic loans into Boston Harbor.
