This morning, I woke up from a dream about piloting a spaceship full of French-speaking cephalopods speeding uncontrollably toward for the center of caffeine molecule's brain. So, I turned on my laptop and started reading the news about Timothy Geithner's new "Plan for Bad Bank Assets," and suddenly nothing makes any fucking sense at all.
NPR's Planet Money blog did the best job of almost explaining what's what dumbish enough for me to get…
The news this morning is of course dominated by the Treasury Department's new plan to buy troubled assets or as the government is now calling them "legacy assets." The plan calls for using $75 to $100 billion in TARP capital along with funds from private investors to purchase as much as $500 billion to $1 trillion worth of these loans and securities. The price for the assets will be set by private investors "competing with one another." The New York Times reports:
"Simply hoping for banks to work legacy assets off over time risks prolonging a financial crisis, as in the case of the Japanese experience," the department said. "But if the government acts alone in directly purchasing legacy assets, taxpayers will take on all the risk of such purchases — along with the additional risk that taxpayers will overpay if government employees are setting the price for those assets."
Whoa! This is just too confusing for me.
I think I'd better just go and huff some rubber cement and try to get my head together.
Tags: Economy, Obama Administration, Timothy Geithner