Chronicles Of Depression 2.0: #392: TARPless
It’s official now. Treasury Secretary Hank Paulson has no fucking idea what he is doing.
NEW YORK(CNNMoney.com) — Treasury Secretary Henry Paulson said Wednesday the government would broaden the reach of the $700 billion bailout plan to support non-bank financial institutions that provide consumer credit, such as credit cards and auto loans.
In this second stage of the bailout, officials also hope to attract private capital, possibly through matching investments, to give the government’s injections more heft.
Paulson also said the government is no longer planning to buy troubled mortgage assets, the original goal of the plan. And officials are continuing to examine ways to help homeowners and slow the tide of foreclosures.
Emphasis added by me.
Wait a minute. He was given $700B for one stated goal. Why is he allowed to change it at whim without another round of Congressional hearings to find out just what the fuck he intends to do and why this change is necessary?
NEW YORK – An already disheartened Wall Street turned sharply lower Wednesday after Treasury Secretary Henry Paulson said the government won’t buy banks’ soured mortgage assets after all, disappointing investors who hoped to see the bad debt wiped off companies’ books. The Dow Jones industrials fell more than 270 points, and all the major indexes dropped more than 3 percent as the market retreated for a third straight session.
Paulson said the government’s $700 billion financial rescue package won’t purchase troubled assets from banks as originally planned. He said that plan would have taken too much time, and that the Treasury instead will rely on buying stakes in banks and encouraging them to resume more normal lending.
While the market had been pleased by the government’s decision weeks ago to buy banks’ stock, investors still hoped to see the financial industry relieved of the burden of the mortgage assets whose decline in value helped set off the nation’s financial crisis.
Emphasis added by me.
Wait. Lending to … who?
With all the layoffs going on, are companies still going to need expansion capital?
Is this money going to go down the drain of GM, Chrysler, and Ford?
Would any of these banks loan money to American Express? No? Then why should we?
In Chronicles Of Depression 2.0: #325: O’Neill, former Treasury Secretary O’Neill — in a YouTube video — says this is what we should have been doing all along.
But I still think something really, really stinks here.
And there will probably be Obama-mandated Congressional hearings in 2009 to find out what stinks.