Trying to get a handle on Treasury Secretary Tim Geithner’s TARP 2 is like trying to hold on to a wisp of wind. There’s not a lot of shape to it.
That’s one reason the financial markets have been tanking…they want definition, and there’s not much there.
On the other hand, the little definition we do see scares the hell out of folks that have taken the time to look.
For example, Geithner wants to use a Federal Reserve facility called TALF [Term Asset-Backed Securities Loan Facility] to loan banks $100 billion to try to kick-start $1 trillion in new spending and lending. The first problem with this is that he’s planning to prime a Fed facility using taxpayers money from Treasury. Several senators grilled Geithner the other day about whether the Fed and the Treasury are getting too close, commingling too much money, which puts all of us at much greater risk. This plan is the epitome of this.
Now, guess what collateral the TALF will take for the $100 billion loan? Hold on for this: mortgage backed securities.
That’s right, the very same financial instruments that got us into this mess……the Geithner Plan will offer-up again as collateral for our hard-earned tax dollars.
Oh, but there’s no reason to worry, says Geithner, because these MBSs are nothing but the best…AAA mortgage-backed securities. Who do they think they’re kidding? After riding bankers for selling lousy paper, our Treasury Secretary is now trying to sell some of the same lousy paper with some of the same lousy ratings to us taxpayers.
At least the bankers were selling this junk to willing buyers. We’re getting it shoved down our throat. Any other questions about why the market tanked as soon as we got details of Geithner’s TARP 2 plan?
Yes we were promised change and a “new” kind of politics! Be careful what you ask for Obots – all fluff and no stuff isn’t going to repair the economy, restore peace or prosperity, its not going to create jobs and its not going to get rid of the ‘hubris’ of the past 8 years!