Now that the Senate has passed this huge payout of taxpayer money, how does the loot get divvied up ?
Obviously, since this is US taxpayer money, it should go only to US banks. Foreign banks should not be bailed out, so they can be let out of this equation.
Obviously, market gurus like Goldman, that had absolutely no CDO exposure cannot suddenly come up with "troubled" assets to sell. So they are out. Paulson would not bail out his former Bank - that would look so very suspicious!
So that leaves just Citigroup and Bank o fAmerica, maybe some other smaller players. These guys have already written down billions, so they might actually start reporting profits on the sale of these positions.
The curious part of this drama is how did they come up with the 700 Billion number. Did anybody ask for the calculations behind this number ?
Also, the point of the entire crisis was that nobody could put a good price on these assets. How is the Treasury planning to come up wih a price ? Conversely, if the Treasury knew the price of these assets, it could just tell the market these magical prices. Why do they need 700 billion to backup the prices ?
The correct way to do this was to de-securitize these assets and ban securitization. This package is going to simply get us out of this crisis and defer the crisis for another decade.
Securitization is the same as printing money. This flood will cause inflation and a further dollar collapse. It needs to be curtailed right away.
