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Again, I'm hardly a person to have any idea what to do on this matter. I think this is a situation where "getting us out of this mess in a way that provides the greatest good to the greatest number" needs to trump "make the outcome fair," but people are questioning whether the plan will do either, or whether the people creating it know what they're doing, whether it really is a plan.
Markets Soar, but New Rules Upset Traders
Some traders said they were no longer betting on the intrinsic health of companies, but rather on what the government might do next. Others simply withdrew from the market.
Joe Nocera: Hoping a Hail Mary Pass Connects
as the day progressed it became increasingly clear that the Treasury Department didn't yet know how this mechanism was going to work. It is an idea of a plan more than an actual plan. In football, they would call it a Hail Mary pass. Sometimes, of course, a Hail Mary pass is completed for a touchdown. But most of the time they fail.
Paul Krugman: Uneasy feelings and No Deal
It seems all too likely that a "fair price" for mortgage-related assets will still leave much of the financial sector in trouble. And there's nothing at all in the draft that says what happens next; although I do notice that there's nothing in the plan requiring Treasury to pay a fair market price. So is the plan to pay premium prices to the most troubled institutions? Or is the hope that restoring liquidity will magically make the problem go away?
...
There's no quid pro quo here — nothing that gives taxpayers a stake in the upside, nothing that ensures that the money is used to stabilize the system rather than reward the undeserving.
Markets Soar, but New Rules Upset Traders
Some traders said they were no longer betting on the intrinsic health of companies, but rather on what the government might do next. Others simply withdrew from the market.
Joe Nocera: Hoping a Hail Mary Pass Connects
as the day progressed it became increasingly clear that the Treasury Department didn't yet know how this mechanism was going to work. It is an idea of a plan more than an actual plan. In football, they would call it a Hail Mary pass. Sometimes, of course, a Hail Mary pass is completed for a touchdown. But most of the time they fail.
Paul Krugman: Uneasy feelings and No Deal
It seems all too likely that a "fair price" for mortgage-related assets will still leave much of the financial sector in trouble. And there's nothing at all in the draft that says what happens next; although I do notice that there's nothing in the plan requiring Treasury to pay a fair market price. So is the plan to pay premium prices to the most troubled institutions? Or is the hope that restoring liquidity will magically make the problem go away?
...
There's no quid pro quo here — nothing that gives taxpayers a stake in the upside, nothing that ensures that the money is used to stabilize the system rather than reward the undeserving.
