Ever Changing TARP
A couple of hours ago, before my breakfast, some of you may have seen the press conference Hank Paulson held to bring me up to speed with what’s going on at Treasury. Throughout his presentation he felt I was silly to have ever believed his whopping "3 page TARP demand" along with the urgent plea that it was an EMERGENCY which needed to correct the collasped Housing and Residential Mortgage industry. There was no doubt buying up those TOXIC troubled mortgage assets to free up the credit markets was essential to fix the teetering situation in the American economy! (on that point I happen to agree Hank).
As you all know by now, Hank was actually teasing us, when he said over and over that housing and mortgage lending was at the core of our troubles, and he would save us all by fixing them – he’s done ZIP, NADA, NOTHING as far as buying up ANY of those troubles mortgage assets … not even one!
This morning he kept telling me, that I was naive to believe that story BUT now he’s got the answer! Their new plan is to buy up TOXIC securitized assets (ABS’s: car loans, credit card receivable, small business loans, student loans), and by golly THAT will release the credit markets and save us!
Sure thing Hank, if you think "I" am that naive to believe you’ll actualy do that, and that it is some sort of a solution – you’re way off base. The ABS market of which you speak, is about 1% the size of the one you initially planned to fix, so now you think planning to address this tiny area will be meaningful? YOU GOTTA STOP SMOKING THAT STUFF HANK!
