Glib
Kevin Drum calls criticisms of the Geithner plan "glib." Which takes some real chutzpah when Drum glibly declares:
Obviously, then, there's tremendous uncertainty about future default rates. But the market appears to be valuing most mortgage-backed securities these days at something like 30 cents on the dollar. That's crazy. . . . 30 cents on the dollar simply doesn't represent a reasonable long-term value for most of this stuff.
Let's assume Drum's glib assertions are true. Why in heaven's name then does the government need private sector "skin" at all? Why not just buy these 'obviously' undervalued assets? Why does the government have to give non-recourse loans to private players to get them in? I'll tell you why - because the Geithner plan is about saving Wall Street, not saving the economy. More . . .
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