Incoming! The sky is Falling
"Things are not always what they seem;
the first appearance deceives many;
the intelligence of a few perceives what has been carefully hidden."
The Treasury has just established the concept of G-BAY. With Meg Whitman as a staff advisor the McCain for President Campaign? If you have ever bought or sold on E-BAY, it is very similar in process. The more thought I give it, the more I think it may work.
Today on Capitol Hill, Secretary Treasury Hank Paulson, SEC Chairman Christopher Cox, and Federal Reserve Chairman Ben Bernanke spoke before the Senate Banking Committee on the Bailout Plan. The focus from most Senators through the hearing seemed to be on guarantee without precedent as well as issues of skeptical accountability.
The key element is to determine price discovery for current distressed assets. That X factor sets a floor upon the NPA. The ceiling number is the mark on the books. For obvious reasons that number is meaningless. Secretary Paulson and Chairman Bernanke explained repeatedly the measures of the $700 Billion were to act as a tourniquet in measured truants. When asked what Plan B is, the alternative is the fallout of continued Recession, higher unemployment and increased home foreclosures.
Chairman Bernanke referred to his plan or market mechanism as a Sotheby’s theory of valuating assets. The Government essential is buying NPA’s from financial institutions to stabilize the Housing Market and the Banking system and ultimately the Economic Foundation of the Nation.
The Non Performing Assets, the marks on the book, are presently worth nothing which not the same being as being worthless. The lack of oversight with the present conditions did not account for a perfect storm scenario model. Post Hoc Ergo Proctor Hoc: After of therefore because of.
Paulson expressed his views accountability by saying there is plenty of blame to go around. Part of the problem that got us here are excess complexities. It seems as though accountability should fall directly upon the Securities and Exchange Commission Chairman C Cox. Interestingly the Chairman did not have much airtime.
The number of foreclosures is approaching 10,000 per day. President discussed this topic on Letterman last night saying, “Each foreclosure takes $225,000 in terms of GDP.”
That is the enormity of the problem. That is the source of the bleeding. He went on to say Hillary has been trying to place a moratorium on foreclosures for the past year.
The $700 Billion would go to liquefying the market keeping the money flow going forward. The Auction price would be above the Fire sale price to buy and ultimately sell bad mortgage investments.
Troubled Americans have been doing this through liquidation their of 401k accounts to buy time in hope to stabilize personal debt.
Hence, the outline of the G-BAY Bailout Plan. Smart people had to count on the Internet to have a handle on solving this problem. gjf
No comments yet.