[quote] The Paulson plan doesn’t seem to be designed to benefit the tax payer. It looks like Paulson plans to purchase MBS’s at ABOVE their theoretical values. That doesn’t make any sense. How can you attract other bidders to the market if you’re going to enforce artificially high prices? So even though a bailout plan COULD work, it doesn’t look like the Paulson plan will.[/quote]
I think Paulson wants to balance between moving the toxic MBS out of portfolios of these companies to clear the clog for the short term while not overpay too much for these MBS so that tax payer still have a chance of breaking even for the long term.
But the goal won’t principally be for tax payer’s recoup of money, rather in the short term to overpay these MBS enough in order to support the survival of problem wallstreet firms.
