While watching the hearing this morning and listening to Paulson’s terms, I couldn’t help but think the Paulson will be back in the private sector next year…probably with an entity that will be buying all these “illiquid” assets from the government.
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, and will have to turn them around and sell them at “market price” which Bernanke is currently calling a “fire sale” price.
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). The private financial sector wins on both ends, and the taxpayers lose in the middle.
If this passes, it will be the single-most obvious display of where our representatives’ loyalties lie…and it ain’t with us, folks.
