Thursday, October 02, 2008

Total Disbelief

For anyone out there who thinks the taxpayer isn't going to be financially disembowelled by the current Mother of All Bailouts (until the next, bigger one comes along), I'd suggest you take a gander at this: Inside a Toxic MBS Pool

I contend that Paulson & Pals will be forced to pay NOT fire-sale prices for mortgage-backed securities like the disastrous one shown above, but rather, they'll be paying premium prices in order to recapitalize the banks (both domestic and foreign).

I will be shocked and awed if the American taxpayer, over time, does not lose hundreds of billions of dollars in this venture.

(Yeah, I'm an admitted cynic.)


— Posted by Michael @ 8:02 AM


In terms of the actual price of the security paid, that is the least of my worries and I talk about that here.
What I'm worried about is the fact that the government balance sheet is going to balloon out of control with this which bodes ill for our economic future.



I think you'd have to look hard to find anything in this bailout that's NOT worth worrying about.

You gotta love the U.S., though. On the day where our national debt tops the $10 trillion mark, we're voting on a bill that will add $700 billion worth of debt to that total ... plus a pile of costly earmarks ... and that same bill ushers in (wait for it!) tax breaks.

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