Much discussion around the Geithner plan has occurred here and in the rest of the blogosphere. Many have criticized the plan as Paulson plan redux and are certain that it wont do what is intended. I am partial to that view, but I'm willing to consider that it might work as PART of a new deal.
Some have said that the problem with all these plans are based on the leaderships view that the banks are technically OK but their assets are suffering from a lack of confidence in them and this is leading to unrealistically low values of these MBSs, CDOs etc etc. Now its easy to say that in a market economy the auction price of an "asset" IS the price and being certain that it is worth more is fruitless because the bidders determine the value but two years ago, many believed they were worth more. What changed?
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