Geithner's plan has been tried all over the world many times and it has NEVER worked. So what's the difference now? Like you said we'll have to wait and see. But I won't be holding my breath that it will.

Cindy..Ga.

I would think a long time before I invested in something termed a "toxic asset". Just the name is off-putting.

This is absolutely insane--the only ones who will benefit are the stakeholders of the toxic assets-–when you purchase garbage--it garbage-–and to think that you can change garbage into gold--you can--but only when you disposed of it.

Simple... no one knows.

Excellent analysis as usual. I really enjoy reading and listening to David he has superior insight.

Here we go again. Another "Plan" to make a select few wealthy.

Now let's help the little guy and say no more than 9.9% interest on credit cards. They need to do something for the people paying for their mess and raising interest rates is always their quick fix

I agree with krugman that we should move to nationalize the banks, but too many Republicans and others fear this, l ike they use to (and some still do) fear a National Health insurance program. So Dumb! On the other hand since the buyers stand to make possible of piles of money, I think Gertniers Plan will suceed due to the proven Greed of so many Americans. I just wish everyone would get out of Obama's way and stop blocking and critisizing him and let him work the Magic that we know he can do, which is why we elected him in the first place. I can walk and chew gum at the same time too!

I would offer a third question: If the majority perceive this a yet another government-supported mechanism that will end up lining the pockets of the already uber-wealthy private investors at tax-payers expense (and liability), how is this not just an Obama-sanctioned give-away to people who are presumably his wealthy supporters, and that's if it actually works? The appearance of this as being a back-room deal with little transparency and a select few who make out is not doing Obama any good, not now and not in the next election.

Re:Geithner plan.
Brilliant! Only one problem.Congress is more interested in posturing
and blame than anything else.Scoring (in their OWN "minds") political
points so that they can get re-elected Yes, the people ARE pissed,but
Congress is only making matters worse,not better.

Yes, we all do have a stake in the outcome of this plan. It is not helpful however for the naysayers to continue with their rant. Krugman and others should park their egos at the door. Obama was elected, not Krugman. The media should be ashamed of themselves. They focus on the most pointless things. Obama got beat up for laughing on 60 minutes. Well he is right. People want to save the banks, they just don't want to spend the money. I am so turned off cable news that I don't know if I can stand one more day. AIG – bonus dollars – who gives a darn. No one complained about those bonus dollars when the market was soaring. Now it is Obama's budget will bankrupt the country. No one talks about the fact that Bush did not include the wars in his budget, but Obama does. The voters will decide if the Obama plan will work. They will do that on election day. It seems reasonable that the man be given a chance to succeed or fail.

I'm an Engineer – not an Economist.... But every commentary that I have ever heard from Paul Krugman has always seemed right on – I think that he's probably right this time as well. I wish the President would bring him aboard his team.

For the ill-informed, can someone please tell me the difference between a "toxic Asset" and a junk bond?

NO – Obama's & his mob team trying to pull another visit to the kool-aids stand.
Wake up folks before its to late.America is gone- welcome China.
This group of crooks is scary.

This is not the change that I voted for. This plan is only attempting to prop up a system that is dying. We can't put a band aid on this, and the band aid that they put forward in this plan is a bad one anyway. Look, people can recreate the red scare if they want to, but what we need is a government takeover of the banks. The financial health of this nation should not be put in private, irresponsible hands. I never voted for AIG or their bonuses.

Alas, I too have more confidence in Krugman than Geithner. But Obama will never bring him on, since Krugman is very anti-biofuels.

After bashing people for borrowing 30 to 1, I wonder if Jon Stewart will attack this plan too, the Obama fan that he is.

Panic breeds stupidity and desperate measures.

David,
I enjoy politics and there are very few pundits out there that I truly respect. Throughout the campaign you exhibited such thoughtfull and profound insights not to mention your comforting calmness that allows people to trust you. You should run for president! no joke!

Hi respect David so much, but his analysis lately are somewhat misleading instead of lending a helping hand and giving constructive criticism

So what is the alternative? Has anyone come to the plate with Plan B?

All indications from the market today that many think this will in fact work.

So history repeats itself, tried and tried again this time just larger scale...............didn't work in the past and will not work this time. Who's the bigger fool the ones selling the plan or the ones believing it.

Now what makes you think that Obama wants to do what's right for the nation?

Nationlizing the banks is without a doubt, 100% the right thing to do.. it doesn't take very long to figure this out.

but no one in washington will say this–they will simply put on a smile, lie about their motives, and continue to come up with these no good policies that benefit those who f'ed us in the first place.

12.4 trillion Taxpayer dollars spent since 2007 in bailouts. This is certainly good for the wealthy, but this will certainly be the shackles of the people’s enslavement.

At last leadership in the White House. Thank God.

If the asset truely have a value that would make it an exceptable investment. Then why should the current owner not reap the benifits-meaning the banks.

It may not really matter whether it works. If it doesn't, Obama has failed to resolve the crisis. If it does, the reports of outsized gains by hedge funds will piss off the public. If it doesn't work and the hedge fund guys still make alot of money, Obama is toast. Unfortunately, I'm betting on the last possibility.

Other than providing potential seed money to buy the toxic assets from the banks, there is still the question of who will decide the purchase price of those assets? And if the government/taxpayer is to receive their fare share of the potential profits of this transaction, then what actually removes the "toxic" from these toxic assets?

In my amateur opinion, the only way to wrtie off the toxic amount to free up the banking system is for the government to offer to buy $100B of the assets at face value and re-sell them to the market at $95B. The government/taxpayers essentially writes down 5% of the bad CDO's and just takes that loss in the name of re-starting our economy. Any bank needing to clear bad assets has the onetime option to do so at that 5% rate (prevent multiple writedowns of the same asset).

All of the political posturing by Congress and the new Administration is just wasting time and hurting the economy.

Thank god or should I say Obama for forging ahead.
We will come out of this sooner.
The Republicans would still be sitting on their hands.

Obama's is in control of our money,and i love it. Krugman is just another power player that has played out. He needs to Team up with Bush.

I agree with setting limits on credit card and bank interest rates. When they became our modern day loan sharks we started falling into more financial trouble as a country. We ought to go back to simple interest, taken on the total amount borrowed...not compounded daily which then skyrockets loans to more than three times the original loan.

As long as shareholders keep demanding huge profits this will not change...unless we legislate interest rates remaining simple, ie. 5% of the amount you borrow, repaid over time...and that's it. Borrow $ 100.00, repay $ 105.00.

I agree with Prof. Krugman. However, I 'hope' this plan works. If not, we're digging ourselves a deeper hole! Hmm...I'm wondering if the current hole has any limit.

The success of the new Geithner bank rescue plan is heavily dependent on establishing credible market value asset pricing of the millions of at risk mortgages and foreclosed properties. Here’s my question. Would it be possible and practical to set the value of the portfolio homes and properties at a modestly discounted prerecession/housing crash level – let’s say 90-percent of the June 1, 2007 property value?

As President Obama has been emphasizing, all negotiating parties need to be willing to either take a haircut or pair their investment expectation. Rational compromise seems to me to be the necessary first step in restoring confidence and ending valuation uncertainty.

Cindy,
This plan has been "tried all over the world and it has NEVER worked"? When specifically? What countries, specifically? Do you have a better idea? Please tell...

I think Mr.Geithner’s plan will work but I don't this they should rely on the bank to determine the price of the toxic assets. or better yet allow the bank to value them and then buy them at a certain percent but not at 100% since the bank (some of them) are already sitting on huge stock piles of bail out money. If the goverment and the fed does this and the bank start lending the massive amounts of money they have already gotten from the bail out then inflation will be a major problem. And let's remember banks generally don't lend when time are tough.

Scully, the US Airways pilot who landed the plane in the Hudson, said that he and his crew were able to remain calm through a pretty big problem by having a plan every step of the way. Yes, we will have to wait to see if the administration’s plan in assisting banks in unloading some of their toxic assets works. But at least it’s a plan and that just might help some of us sleep better.

What's the latest on the appointment for deputy Treasury secretary? I haven't heard much on this of late. Geithner must be putting in some hefty hours at the office these days and would imagine he'd appreciate some help.

Cathie...spot on! We need to give Obama's plans a chance...he is trying to clean up possibly the largest mess left by an outgoing president. A very large undertaking indeed, one that needs time.

The plan will be successful if there is a mark to market reassessment of these mortgages. To me, and a large number of other middle class Americans, it makes more sense not to have to sell these assests for fire sale at noon prices, but have the flexibility to wait until the market prices rise and the taxpayers (granted some of the hedge fund cruds will make a pile too) can recoup the money spent. over a protracted period. Let's give the plan a chance because what was done before certainly failed. I would be interested to see if and how the private individual will be allowed to participate.

Cathie Holden March 23rd, 2009 1:34 pm ET
Your point is one I've been making over the last week. The media frenzy that is occuring is horrible! EVERYTHING is negative. They bring on the biggest naysayers they can (I'm talking to YOU, CNN)... maybe only the most "conservative" (I call them irrational) Republicans are available for comment right now since centrists and Democrats are rolling up their sleeves trying to make this work. Krugman and others should help or shut up.

Obama won the election. CNN needs to get that fact through their thick skulls! QUIT making him campaign day after day in rebuttal to the idiots that got us in this mess. How about a little support and intelligent reflection for a change?

If I hear the words "Some are suggesting..." as your source one more time, I'm dropping CNN as my news source!

The essence of this plan is to create liquidity that does not currently exist becuase under normal circumstances, hedge investors and or opportunity funds would have purchased these assets and therefore, creatied a movement of bad assets off the books of the institutions that held them. This market efficiency does not currently exist and the only entity willing and to some extent able to be the investor is the government and by extension us. The government does not want to nationalize and is providing the debt to private investors to leverage up and buy these assets. I like this becuase the private investors will make sure they are buying the assets at risk adjusrted returns and also understand the mechanics of buying and selling them and re-pooling. In the end, the goals are to strengthen and stabilize the financial market/companies, create more good borrowing and protect the taxpayers by getting a reasonable retrun on their investment.

Hey Celeste, Europe already has socialism and so does Venezuela!!! WINX

why don't they tell us what they are going to do with the loans once they buy them. my guess is wait a while, then write them off as a loss and forgive the lier's that took out the loans debt and the crooks that looked the other way and made millions knowing the loans would fall apart. and we tax payer's will have to pay for the house next door and there new car, boat, vacation, education, etc. oh but wait, your house will stop losing value so you make out. (forget about the fact you are now paying for the lier's home too. just wait in a few years the $40k income family will be paying upward of 40% taxes and watching the neighbors head off the the lake with there ski boat in tow and putting it all on there credit card the tax payer are picking up the loss on. ha ha ha funny isn't it.

To Celeste Hammond – before you think we should have a National Health Insurance program – talk to people from countries that have this option. A lot of the people in Canada will come to the US to have their health needs taken care of. With a National Health Insurance program the doctors don't have the time to treat your illness, the waiting rooms are filled to the brim and by the time most illness' are dealt with it is too late. I am not just making this up I have heard from people who live in Canada, Germany and England. People have lost their lives waiting to be treated for their illness or disease. The only people who have good doctors are the people who have the money to pay for these doctors themselves. Check it out.

Let me get this straight! We are going to buy the toxic assets from the banks and then lend the investors the money to buy them from the government?? Wow, where is all this money coming from?
If these toxic assests had any real long term value, why the heck is all of this happening in the first place. Are we talking mainly about all the foreclosed, abandoned and sometimes wrecked houses? If they did not sell before, why would they sell at some much higher price now? And who would the buyers be – the same poor slobs who got into their "American dream" this last time? Unfortunately, I think the so-called lynch mob mentality will again prevail, from the American people who are fed up with this type of deal. And, If the investment goes bad, apparently the investor is only on the hook for the small portion that the government did not lend them? Sounds like a shell game to me, but if there is quick money to be made, the usual greed factor will prevail as it always does.

I believe the 497 (closing estimates) rally we saw in the DJI was investors being too happy without giving much thought to whether they would love to be any of these 'junk investors'. There are markets for other junk products besides financial junk but this will surely take some guts to take on because it is leverage on top of badly leveraged assets. Mr. Krugman's assessments are thus fair in light of this.

However, nationalizing the banks will also require a clean up of some sorts and that will be difficult to achieve except the government is essentially wiling to absorb trillions of dollars in losses. That would eventually amount to a free pass for greed-led corporate failure. Geithner could under this plan effectively force banks to sell these assets at a favourable price to willing investors simply by using his bailout funds as leverage.

True, private investors need assurances that they won't be stung by retroactive legislation, though The New York Times did mention that Administration officials at least acknowledge that fact. I'm disgusted by the AIG mess, too, but it seems the media is serving as agitator here. Whether we can stay ticked off and move on at the same time is moot. At the very least, we know we need to move on. The stock market shows there's a little confidence hiding out there. Let's not scare those spirits from rising out the vasty deep.

The media needs to do this country a service. True, they must report the news, but spend some time giving credit to an administration that is trying to pull us out of this mess! The comments of the pundits and "strategists", whatever that means, carry weight by repetition. Enough!

Let's give Obama and his administration some time to execute their plans. If the plans don't work, we have options. We can go back, put Republicans in place, clear brush in Crawford and pray for divine guidance. As for me, I favor intellect over blind faith and unrelenting criticism of people that are trying like the devil to make things better.

Oh and STEVE, Paul Krugman is a socialist knave. Why don't you limit your commentary to engineering matters in the future and spare yourself any further humiliation.

This pretty much seems to amount to what can be seen as an economic "crap shoot". Its got Las Vegas types of risk. The good things about Las Vegas is when you win – you really win. I just question whether this country is ready to make large "bets" on its future.

The nationalization of banks would be the safest way to go – and perhaps assure people that we are less likely to falter in the future. Under the Geithner plan – we are all hoping that Congress gives President Obama the blank check that he needs. It might be nice to get a better idea of this before we go knee deep into toxic assets at a time when people (especially in the financial industry) are becoming increasingly leery of the governments involvement (think AIG and associated nonsense).

I guess this is all more reason for President Obama to back off his multi-trillion dollar proposals for our everyday budget. It seems as if he thinks the financial crisis is an inconvenience that he needs to get us through before he embarks on his preferred agenda. Its not. I think to simply start to pull us out of this financial mess is enough for any single presidential term. If this plan doesn't work, we are going to need trillions more to pick up the pieces. At that point, I think we had better have it ready and not be spending it on so-called social reform.

I am not an expert – just a novice. But I see that we are really taking lots of risks in many different directions when we need to be focused and conservative with whatever precious financial resources we have left.

We run the risk of totally bankrupting ourselves while trying to make our economic mess less painful. All of this makes me very very nervous.

This plan is nothing more than further fraud perpetrated against the american taxpayer. We are now on the hook for not only the cost of the purchase of the toxic paper which the treasury will over pay for then we are also on the hook for subsidizing 95% of the investor purchase. What is the sense of that. What schmuck in Congress and the Administration think that we do not understand what is going on. They all should be arrested for fraud.

Here is a better idea to stabilize the economy.

Force the "to big to fail" companies to write off all their bad paper and take the loss.

If they are bankrupt let them be broken up and sold off into a more manageable sized operation.

No bonuses for anyone. Period. Why should they be rewarded for destroying a company.

Reinstate all the Glass/Steingall rules that were stripped out in the 90's with a one year period to restructure.

There are about 60 million people in the US 55 years and older.

Pay everyone of them $1.5 M with the following stipulations:

The money is tax free and the only amount taxed after that is on the interest or income earned on the money.

If they are employed they must retire.

If they own a home they must pay off their mortgage. If they do not own a home they must purchase it with cash.

They must purchase one new American made car within the first year.

That should take care of unemployment, housing and the auto industry with a price tag of less than $100 M.

Of course this makes to much sense for them to even consider it.

I, too, see more common sense in Krugman's view. Far too much capital is being placed outside of oversight and control already. I agree Geithner's view of the potential value of the assets is far to rosy, considering recent events. What is needed is immediate action, which the plan fails to address. Banks may balk at complete takeover, and it would be a hard sell to the public because, right now, the public distrusts the government as much as large corporations and banks. Perhaps something in between, like emergency regulation and review. The government and the public get the information they need and the banks get the stability they need. It could be immediate and short term, very fluid and very transparent. It could restore the confidence needed from the private sector and from the international community as well. It could give us TIME we need to stop these knee jerk reactions to crisis potential.

It is interesting that we seem to find ourselves poised between the two options of bank nationalization versus a Gov funded program to underwrite the movement of bank assets, thereby saving banks. Extremes to say the least and the later option designed to help banks generate more profit coming from a newly elected Democratic administration. Go figure.

Despite this Geithner’s plan remains an uncanny example of the fact that this seems to be amateur hour on Pennsylvania Ave. None of the players in our little (not actually little) drama seem be have a handle on what result might actually take place if one plan or another would be put in place. It would have seemed to me prudent for Geithner to have pre-negotiated at least one asset transfer, so that as soon as it was announced someone would have jumped up and said “I’m in”. But nope, nail biting as a planning tool is now in vogue.

Oh and poor Barack, blocked and criticized at every turn. In case you’ve missed it, he has been working his magic; the only magic he knows, campaigning unceasingly for plans that have nothing to do with the real time ills of our country. In past there was another Gov leader that was popular with his people and who spent lots of money on projects he thought would have a huge impact on its development. Trouble was he really didn’t know what he was doing either. He did enjoy partying a lot, so running the Gov was only a part-time activity. Kind of like campaigning without end. Perhaps you’ve heard of him. His name was Claudius Caesar Augustus Germanicus, but everyone knows him by his nick-name; Nero.

Cathie Holden: You said about exactly what I would have. SICK & TIRED of everyone coming out of everywhere and beating up on Obama and the Administration. They inherited one HUGE mess, and are TRYING to clean it up. This Administration has worked harder to help our country in the past 2 months than the past one did for eight years! Give me a break! Give the plan a chance! Rome wasn't built in a day!

Everyone should do their part in investing. This could save all of us and at the very same time probably make some very good money. Do not over invest out of Greed as this was the very reason why we all got into this mess.

lets really give it our best shot.

Krugman wants to nationalize banks. I think it is clear that nationalization has been considered, but think about the reality that to some extent we already have partially nationalized the system, and will continue to infuse the system If need be.

David is so right, Geitner and team need to make it clear that investors that stand to profit should know they will not be punished by profiting. Treasury did make a statement to this, this AM. We NEED TO HEAR MORE.

This plan needs time to work. Krugman is an opportunist and most of you posters that are negative just don't get how serious our problems are. The Fed is the ONLY source that can be the bank here and frankly we need a balance between social engineering and much better regulation.

Cathie Holden is so right, and I will go a step farther.

Stand behind your President and his team. If you do not you are somewhat a traitor to this country, and that goes for those in both Houses that are partisans. Your day to get voted out of office is coming. Your poloitics are dead.

Obama has been in office about 64 days and I think he deserves thumbs up so far, and deserves our support. G.W. Bush left him with the biggest mess since 1929.

Stop pointing so many fingers, we are all suffering and it just does not help. Be a better student and be a patriotic American.

Look at it this way, you could be living in Darfur.

How would your days and nights look there.???

Financial engineering cannot turn a toad into a prince. The underlying assets are illiquid and potentially not only worthless but also could drive negative worth as expenses providing no economic value are generation in an attempt to collect the debts. The housing stock now just under 10 months supply needs real buyers as does any inventory to clear. Moving a bevy of financial instruments guaranteed by the gov't into a bad asset bucket not does not create real consumer demand for housing. In fact it just mortgages the future in terms of having to cough up the losses. Nice try Treasury, but it won't work until jobs recover and income grows to allow real consumer and housing demand to grow. The lipstick on this pig will smear off quickly.

All of this speculation, but no one truly has the answer to the economic mess we are in,. but they are sure quick to judge. Shame on us as Americans. People around the world must be saying if that is what a Democracy is we do not want it. Look at the countries around the world that are loyal to their country and we throw our leaders under the bus at the drop of hat. Sad....... Just 2months and we all have the answer that our President has failed. At least Ex-President Bush had the decency to not commit on the sitting President.

When was it never thus?

"Now is the winter of our discontent
made glorious summer by this son of Pork."

John

With the possibility of making so much with so little risk the spirits will come from the vasty deep. In addition the secrecy the vasty deep loves so much will be more than tempting. Just look at the Dow Jones the spirit is positively stirring.

Let's hear no more from conservative Republicans and Limbaughs, who pray for failure. Losers. Thanks for your efforts to save capitalism, Mr. Obama..

I would never want to invest in anything the government is involved with. They want people to invest their own money in extremely high risk investments while the government is using taxmoney aka our money . Still sounds like the government is full of it

Perhaps AIG and companies like them should be eliminated to prevent economic pollution. They are like the parasites that killed your favorite pet and like those parasites they are a cancer to the country that will only result in death and destruction, war. Fight for power, fight for your life!

Obama and Geithner made the same announcement today that they've made the last month. There are absolutely no new details that came out today if you follow the markets closely. A lot of these details were already either announced or assumed. The same with the federal reserve buying of 30 year treasury bonds last Wednesday. They signaled for months that they were going to do this. Nothing has changed. Absolutely nothing. This is just another bear market rally that will uproot the publics desire to ever own a stock again. You should be selling on this, its silly. Yet we will probably go up another 10-20% before people get over the euphoria. Its maddening.

just another example of obama's failed policies at work...

geithner the tax cheat has no credibility...

i am dumbfounded at all the obama liberal left wing supporters sitting around clapping themselves on the back as their idiotic policies are literally going to bankrupt the country.

my kids and YOUR kids will be paying for this Obama debacle

wake up you left wing whackos...you won't be able to blame this on Bush...although you will try...

everyone knows that this is your baby now...god help us all

It would seem to me that a plan designed to allow investors the opportunity for vast sums of profits with little 'skin in the game' is the same reason we got into this mess in the first place. Over-leveraging got the banks into trouble in the first place so now the US government is going to try the same failed tactic. If the "toxic assets" were worth anything investors the world over would be jumping over themselves to purchase them without Treasury Secretary Tim Geithner's input.

My question that I've posed for months now is: where are we getting the $1 Trillion + that may be necessary to achieve this plan? We do not have it. The Chinese do but they are smart enough not to purchase "toxic assets" when they can purchase relatively safe US Government treasuries. So, again, the US taxpayer is on the hook for more money than most can fathom while the people who will benefit from this plan earn amazing profits (if the plan works) or lose very little (if it doesnt, which, unfortunately it probably will not). I want to see our economy rebound as much as the next guy, but lets stop gambling with TRILLIONS of yours and mine and my children's children's money. Why? Because the last few TRILLION has got us nowhere but further into debt.

The tax payers that have obeyed the laws, paid the taxes and fought the wars and built this Nation are getting screwed by Corrupt/Stupid/Worthless Politicians and Greedy crooks at every level!

This is the same old scam, reward the Rich Bankers with billions in tax payers money and the invading horde of illegals Aliens with Jobs, Free medical, Free education, Welfare, Prison cells and make American Citizens pay for every Crook, Criminal, Peon, Welfare Leech and Marxist or Racist organization like ACORN or La Raza in the world!

For all you Obama/Geihtner cynic/crybaby/haters...don't look now, but the recovery has begun. The DOW went up 500 points, home sales up 5.15%, consumer spending is up, and the major banks are posting profits this quarter. Because we, the taxpayers, now own a hefty percentages of a lot of these financial institutions, the tax payers will end up reeping a healthy profit off of all this when it is all said and done, that is if we don't cut our noses off inspite of our face. Why should we be surprised? Summers and Geihtner have done it before, they rescued the Latin American financial system from collapse in the 90's. Results talk b.s. walks. Maybe now we can have a few days of peace and quiet from the knee jerk chattering class because they have a mouthfull of crow to eat. In yo' face!

OBAMA...YOU ARE DA MAN!

Geithner's plan makes sense.

These assets are worthless, they are illiquid. Getting these assets off of banks books will allow them to lend mopre and will stimulate the economy.

The deal he offers is a great one for hedge fund managers. What doesn't get mentioned is that the assest will be sold at auction. This auction will allow the market to properly value not only the "toxic assets" but also the government sweeteners. In other words the hedge fund managers won't be the biggest beneficiaries of the government guarantees, the banks will benefit the most by getting top dollar for the "toxic assets."

The U.S. tax payer is the biggest shareholder of the banks. Getting these bad assets off their books at a good price will cause a windfall on our bank stock holdings.

If the assets are undervalued the hedge funds will make their money and everyone wins. If the assets lose a small amount the hedge fund managers lose. If the assets are worth far less than their discounted price the hedge funds eat their investment and the taxpayers pick up the rest of the tab. This tab will be hugely offset by the gains already banked from the sale of the assets.

As a Nobel Prize winner and a respected economist, Mr. Krugman's absence from some place within President Obama's financial advisory team appears to create a question begging for an answer - why?

I would like to see Anderson Cooper 360 or one of the CNN news segments have Mr. Geithner and Mr. Krugman on the air, and conduct a major discussion between them regarding their different perspectives - the pros and cons. I think it might facilitate increased public interest, and better public understanding, than is currently possible with the "he says" and "he writes" format. A dialogue between the two gentlemen, with clarifying questions interjected by the newsperson/moderator, I believe, would be a good, public service.

Yes, the plan will work just fine...

What's a BILLION DOLLARS?

A billion dollars is about $3.40 for every single person in the U.S
a man and wife with 2 kids would be about $13.60 for every billion dollars.

The Bonuses of $165,000,000 = 55 cents for every person in the U.S

The $165 billion is $561.00 for every person in the U.S

a Trillion is $3400.00 for every person in the U.S.

something to think about

I don't care who's pockets it lines, as long as someone begins to buy these assets. You guys who are complaining about who is going to get richer from this plan still don't get it. It's not about who gets rich off the plan, but to get the flow of capital moving again. Stop being so myopic and narcissistic. And for the record, I'm 26 and work for an ad agency making $30k a yr.

I am an RN, I am held responsible for always providing safe care to patients. I (we RNs) am held to the highest standards when providing patient care. To do this I am required to continually update my skills and knowlege. Keeping up to date in ones practice helps to continually provide safe care to patients. There is not any crystal ball available in medicine.
I agree that no one can predict the future of our economy, however, I believe those making decisions and "caring" for it need to step up to the plate and follow "best practice" during decision making. Nothing less is acceptable.

David, I can't get by the notion that no matter how good the Obama/Geitner plans turn out to be in the short term (and there's plenty of doubt as to their goodness), the deficit we are accumulating as a result will be a disaster for us in the long term.

With a 5% equity stake, a buyer of these assets will make 500% on his investment if the toxic asset rises 25% in value. $1 million invested to buy $20,000,000 of toxi asset pays the buyer $5 million upon the sale. The taxpayers get the same $19,000,000 they put in, plus the "low interest" that the loan earned. Maybe 1%, or a total of $1,190,000. Wow. the people make 1%; the buyer makes 500%.

However, if the $20,000,000 of toxic asset goes totally bust, the buyer is out $1 milliion and we're out $19,000,000.

But wait, if the $20,000,000 in toxic assets is going to be worth $25,000,000, the bank that is selling has little incentive to sell.

So the likely order of events is that banks sell very little of what's on their books to "see what happens." When the first buyer pockets $5million on a $1million investment and the taxpayers get $190,000 for their trouble, Congress will have a fit. And the rest of the toxic assets will remain on the banks' balance sheets and lending will not increase.

This is a government bail out of the bankers with a fig leaf of "private equity".

Since the Obama-ites are taking credit for the 497 point Dow gain, they now "own" the stock market. No more blaming Bush if it goes down again.

This plan has been widely panned by Krugman, Huffinton and others on the left who seem more interested in promoting their own economic theory. This leaves me to wonder if they actually want it to fail much as Limbaugh and others on the right, who have outwardly called for the Obama administration to fail. Call it a betrayal on the left or a collusion with the right but whatever it is, it has the effect of instilling fear instead of hope.

Maybe, just maybe, Geithner's experience and intelligence is being greatly undervalued because he is a poor messenger who lacks Obama's natural charisma. Maybe the market reponded with a huge surge because investors realize that just as the market was ridiculously overvalued at 14,000, it may be significantly undervalued at 7,500. But whatever the reason, can we please all take a deep breath and at least give it a chance. It may just work. Imagine that.

I can't believe this is the plan the world's been holding its breath for...it reads to me like Paulson's previous plan dusted off...I agree with Krugman on the point that these toxic or bad assets are just that...bad. How much more time and $$ is the U.S. going to throw at these banks before we realize they are busted/broke and the path to recovery is through the BR courts, not the halls of Congress. The 3-ring circus we witnessed last week over the AIG bonuses should give us all pause as to the govt's ability to oversee any of these bannking/investment activities with any professionalism or competence.

Krugman is willing to let the stock market absolutely crash in order to build a better system. To me that sounds inhumane. This country has suffered enough and it doesn't need anymore radical ideas that put us further at risk. I understand that his plan may work in the long run, but how many American lives would be ruined in the market chaos that follows a government takeover of the banks.
Geithner is walking accross a tight rope with a fiery hell below him. On one side is the wrath of the markets, and on the other is this newly resurected populist rage. What is interesting about all this is how quiet Geithner has been. He's waited so long to get his plan out. Now with the market responding like it has, I wonder if his lack of leadership was actually a good strategy. It makes me think that he is very confident in this plan. Which makes me confident.

Krugman is spot on, as usual.

The FDIC (and RTC) have been successfully closing, reopening, and rehablitating banks and savings and loans for many years (Continental Illinois, Penn Square, etc.), including right now. They take the bad loans and loser assets off the bank's hands and books, cover the depositors, let the shareholders take the hit, sell the bad assets the over time to the to the risk takers, and sell the cleaned up banks to new owners who hopefully will run them responsibly.

We know what to do, it's just on a much larger scale this time. Yes, the devil is in the details, but the basic approach works and we should stop accomodating the Wall Streeters who created this mess in the first place. Greed, arrogance, and incompetence should not be rewarded. "As you sow, shall you reap," not rape.

By the way David, you are the most intelligent, informed, and gentlemanly person on television. I am a passionate moderate.

Obama apologist aside as a democrat if some things don't change quickly we will be looking at another one term Jimmy Carter like President. Printing more money and spending money we don't have at shot in the dark programs that benefit only the shysters who caused the problems is a sure way to cause a change we can believe in. Not only is the dollar going to be worth nothing in four years but worse we are on the same path as Japan in the 90s when they had a lost decade of no growth. Its better to take our lumps in the short term and reset instead of assuring a long bleak future of no growth for ourselves and our children.

The taxpayer is once again providing welfare to the rich. This is a travesty. Alchemists tried to turn base metal to gold. You can't do it. Nor can you make these toxic assets worth anything. We're going to lose our shirts.

Qouting Jefferson; " I've never failed once. It just happened to be a 2,000 step process." What happened to our optimism? I agree , just another scheme to make the few wealthy even wealthier , but what's the altnerative? I hear many complaints but no alternatives.... Just a thought.

Seems like folks have lost sight of the fact that the AIG outrage is because the bonus bunnies lost an incredible amount of money, and got rewarded for that. If someone makes an investment that does well, Americans will be happy to see that rewarded.

There'll be thunder on the Left and Right over this plan. It would have been better to propose it before the AIG bonus mess. It's true that the upside for the investors is great. If the assets detoxify and appreciate then many people will get rich. But keep in mind that the downside for the govt is correspondingly low. And if the assets do take off then it should help the economy. Also, the Trotskyite-Lite posters should remember that at least the people who profit on this will have those profits taxed at a higher rate than under Bush.

Celeste, since when has it been the role of citizens to "just get out of a president's way" and stop criticizing him? And how do you know Obama can work magic? He's never managed anything in his life. All any of us know at this point is that he is charismatic and gives a great set speech. If that's all the "magic' he has we're in deep trouble.

Heck, at this point we have probably given the banks enough money that they could have paid off every one's credit card debt. The result would be money available to the banks to lend and money in our pockets (remember us - the ones ultimately footing the bill) that we could afford our toxic mortgages.

At this point, I want to know when the feds are going to write ME a check to balance my books.

Thank you Cathie, for the stating one of the recoveries biggest problems – "The media should be ashamed of themselves. They focus on the most pointless things."

Please stop emphasizing the negative, stop trying to be being cute and interrupting anyone who has a constructive comment and help move the country forward with the power you have by also reporting the possible and the positive.

There is so much private money sitting on the sidelines. Trillions. They want to invest it but won't until there is clarity in what they are getting.

There is also less and less will to spend taxpayer money. Forget about another 700 billion from us!.

And yet banks still need a trillion or more to fix their damaged balance sheets. Unless you nationalize and let them default on their obligations to OUR pension plans, insurance companies, companies in our 401K, etc.

So why not use 100 billion of taxpayer money to guarantee 900 billion of private investment, for a total of 1 trillion? Now that's leverage we can believe in.

I think it's a brilliant solution considering what we have to work with.

Who will buy this assets, who wants to be subject to the stupidity of the congress and the WH, Will they question later how much you make and you should give it to the state, will they tax you more; will they publish your name so you could be investigated by liberals and to look to destroy your life "Joe the plummer" see how much the investigate him. Obama unleash on him everything he could FBI, Secret Service,liberal press, etc. who in his right mine will deal with the government will future federal contracts will have clauses so you will need to report everything you make and how you make it. Who is John Galt.

Thank you Cathie, for stating one of the recoveries biggest problems – "The media should be ashamed of themselves. They focus on the most pointless things."

Please stop emphasizing the negative, stop trying to be being cute and interrupting anyone who has a constructive comment and help move the country forward with the power you have by also reporting the possible and the positive.

Krugman is relentless in his attacks. For someone who's opinion is wide reaching and highly touted, he telegraphs his message with all the suave and sophistication of a drunken boxer. Krugman probably has good points to make, but it is difficult imagining that he is anything other than angry.

Geithner's plan isn't a miracle cure-all. It is basically a continuation of generations of practice that has made our economy so 'resilient'. We have collectively decided that we are willing to trade in boom and bust cycles created by the most unregulated market on earth. To accomodate these fluctuations, which I perceive to imitate feast and famine cycles observed in nature, we socialize losses during times of famine, and we individualize gains in times of gluttony.

Flawed from the start. As pointed out in the article, no private money is going to take the risk of buying the assets and then Dodd and Frank have an epiphany and haul them before Congress and pass narrow, targeted taxes on a few. So much for liberty and the Constitution. The libs love to whine about how GWB trampled on the Constitution. Does 1600 Pennsylvania even know about the Constitution at this point? Don't even start talking about how property rights and privacy are being trampled...apparently decades of case law mean nothing so long as you want to cram a liberal agenda thru...

Others in this thread have said "we're paying for the greed of others" (paraphrased a bit). Anyone with credit card debt, house debt, school debt, auto debt and it exceeds your gross income by some factor (2x maybe 3x?), guess what? You are the problem too. Why are we in this mess? Certainly poor business practices, faulty regulation have their shares at the table of blame. Consumers do too. As consumers, we've sacrificed the future for today's consumption (i.e. used cc and home equity lines to live WAY above our means). See the Asian financial crisis for how this ends...

The press and libs whine about AIG bonuses, yet Raines (of Fannie Mae fame) walked away last summer with something like $20mm and Fannie/Freddie paid bonuses this year??? But, then again, Raines is one of Obamanations advisors so, just like all of the wealthy cabinet people who cheat on their taxes, that's ok...do what I say, not what I do...

Nationalizing the banks? Are you out of your mind? Look at how well the public school system and Medicare/Medicaid are run. That's enough track record for me to know that our gov't is completely inept at running a business. Then again, with so many "professional" bureaucrats and politicians who've never had to make payroll, compete for business, etc., we shouldn't be surprised. I love how libs love to point at socialized medicine as their poster child. Really? Read some actual academic research on the matter, not blogs from stoopid websites...I would hope that you'd see the fallacy in your beliefs...

Wake up, people. Your liberty is leaving you...Once it's gone, it's tough to get back...

The stock market rallied today because once again, the taxpayer will take the brunt of the downside risk, and the Wall Street executives that got us into this mess are off the hook...AND they get to keep their jobs! The Treasury is overly optimistic on the potential value of these assets. If there were any real perceived value, there would be an active market to buy and sell them on a global basis...maybe even on Craigslist!!!

The executives of these financial firms complain about the potential cap on their salaries, and the risk of losing talented employees, but they don't appear to be smart enough to resolve the situation they created. It appears to be one of the few occupations were your performance can have a devastating impact on the global economy, completely destroy shareholder value, require taxpayer bailouts to stay in business, and yet receive a stellar evaluation in terms of compensation. It might just be possible that real talent from other industries might do a better job of running these businesses.

Naysayers? It is called balanced approach. Absolute power corrupts. Why do you think Republicans fear nationalization? Gov't cannot do as efficient as a job as private industry. WE learned this a long time ago. Also, to Celeste, did you just say that everyone would just get out of Obama's way so that he can work....his magic??? Do you really think he is a financial master? What planet are you from??? Typical mindset of a liberal though.....usually know nothing of politics or business and place your false hopes in a person. People are not magic idiot.

What in the world ever gave these geniuses the idea that smart investors would ever buy worthless (toxic, to use their word) assets? And if investors agree to do this, doesn't this mean we taxpayers have allowed our representatives to give away our store while telling us this is good for us?

I watch AC/360 every night and look forward to what David's analysis will be of each day's events. His opinions are down to earth commom sense – what everyone needs more of.

What happens if after the banks are able to shed these "toxic assets from their books, they wise up and decide buying said assets is not a very smart business decision and they stop participating in this new shadow market? It sounds like a big old game of Mortgage Backed Hot Potato and the question I have is, what happens when the potato winds up in the taxpayers lap?

Voodoo economics create zombie banks. A trillion dollar Band-Aid is very expensive health care for the Fat Cat Syndicate. Wall street likes the plan and that seems to be all that matters to Washington. When will they realize that "free market capitalism" has failed and a new "blended" economy needs to be designed by all those smart folks running the Fed?

Gosh, couldn't Geithner come up with a plan in which the people with the money would just do it for love of country and not for the money? Isn't that what capitalism is all about?

Paul Krugman has forgotten some of his civics lesson. He seems to think that Obama can just nationalize the banks regardless of whether Congress will go along. A person can get that way when he spends too much time at college, or at the typewriter.

I think the plans proposed above by those who think the Geithner plan is not good should be tried. Oh, I'm sorry, no one of them proposed an alternative.

Is Obama right that the gov can’t go after the bank execs cause they didn’t break any laws?

What about making shady risky investments that investors couldn’t afford to risk their life savings on?

Is Madoff the only one going to jail?

Everyone is making comments on how little the percentage of bonus money was compared overall to the entire stimulus package. Where was that talk when the auto companies asked for the bailout (loan).

Eric Cantor prefers to dump the administration's plan and dust off a plan recommended by the Republicans last fall. If not we're going to take our toys and go home, he says. In the national election last November the Republicans lost ground in the Senate, they lost ground in the House, and they lost the Presidency by a margin W only dreamed of. Duh, will someone please tell Mr. Cantor about this startling turn of events!

You people has been complaining for lack of a plan from the Obama administration to solve the credit problems with the banks. Now, they
came up with a plan to try to solve the problem. Instead of given them chance to work, you people have already started shooting it down. Please give Obama and his administration a break

Geithner's plan is the best thing to do. It minimizes taxpayer risk overall because only the original TARP is at stake and guaranteed loans. 90% of people are paying back the mortgages that back these assets. That's why the banks have not written them off because they know some day they will get much of their value back. This plan is only trying to transfer risky investments that hedge fund managers are comfortable with and banks are not. These funds know how to manage and profit off risk and the government will profit and be paid back. Like you say the only thing that can hurt this program is if investors are frightened off by populist outrage.

The markets have voted on the plan. The House Republicans have also voted. The latter's vote is predictable. They have decided to oppose every Obama administration initiative and to obstruct in anyway they can. Let America remember these days! I am quite happy at the House Republican position aka I hope Obama fails. Obama and Americas optimists will succeed and the Republicans will be confined to minority status for the next generation.

David quoting anything regarding this plan from The New York times is fundamentally wrogn since its been relealed that the NY Times articles were all written before thye actually got the plan and subsequently their critizm was unfounded.

The real voters was Wall Street and they voted 498 yes and 0 no. That works for me.

David, you should also read Summers responce on Krugman which states how wrong Krugman is in his assessment.

Yes! I believe the plan will work. The purpose was to stabilize the economy. Besides, nobody else has brought forth a plan to fix it. Tim has done exactly what most folks including McCain has said. Now that he's done it; its consider a fluke, a ponzi scheme.

Therefore, I ask if not this plan what plan?

Whats toxic here is Obama,

There are no exact parallels to the economic problems this administration is facing. Even the much-touted Swedish solution does not accurately mirror situations that prevail in present-day America.

While no one doubts the integrity and brilliance of Paul Krugman, no one can say that he has all the answers. Dr. Krugman may be a very highly regarded academic but he isn't known for his political smarts.

This is a problem too complex to be dissected in a classroom or in a dissertation. There were inputs from voluminous sources, many of which would be inaccessible to scholars like Krugman.

It is clear that America is willing to give the so-called "Geithner" plan a chance. While Geithner is taking center stage on this blueprint to rescue banks from their toxic assets, there have been inputs from minds as brilliant as Krugman. These would include eminent economic advisers such as Christie Romer, Paul Volcker and Larry Summers.

As always, David Gergen is spot on. The events of last week (AIG rage and mob reactive punitive legislation) may very well indeed cause potential investors to stay away from buying these "toxic assets". Yes, the taxpayers have every right to be outraged by executive bonuses and the fact that Congress allowed a loophole to be slipped into the stimulus package, but rather than having members of Congress and the Administration jumping on the rage ship, they should be doing everything they can to calm the situation down instead of inflaming it. Especially since we the taxpayers do very much indeed need private investors to make the Administration's policies regarding the economic recovery work.

I think that what a lot of people don't understand is that "toxic assets" is bad debt. Real money has been spent that cannot be repaid. Someone is going to lose money. The banks cannot afford to sit on these assets until there value goes back up. If they have to wait to get their money back, they have no money to lend to other customers and get the credit flowing again. If we the taxpayers sit on these assets, we stand to profit if and only if the value does indeed eventually rise again and we then sell them. However, as another poster noted, this strategy has been tried by other countries and has never worked short term. So it would be in everyone's best interest to get the private investors on board and into this deal so the taxpayers aren't left holding the bag all by ourselves.

And how this plan different from the Nick Leeson's the took down Barrings? Now, if we are lucky and it works, everyone may be happy (unless Frank, Dodd, Pelosi, Reid, Shumer go bananas and tax investors out of their mind retroactively). and what if it does not? Would Geitner go to jail? Frank? Pelosi?

Just imagine that cell .... for all this money could public at least have live streaming?

That's the only condition under which I agree to this Monopoly game.

The government, as The New York Times reported this morning, would lend "private investors" (quotes are mine) nearly 95 percent of the money for an investment.

I am so very middle class.
I have ten grand to invest. I bet other people do.
David,
Should we as citizens become a part of those "private investors"?
Do we leave it to somebody else to "invest" or do we put up?...
Are there enough of us to invest that ten grand... and make the difference?
We all screwed up. We weren't minding the store.
You break it, you buy it. We broke it. Either actively or passively.
Now we pony up to fix it.

Celeste:
- I'm confused, if Obama is for the Geithner plan, and you're for Obama, then how can you also be for Krugman's nationalization plan? Believe they're mutually exclusive.

- so if the Geithner plan will work because of greedy Americans, and Obama is behind the plan, does that make him in favor of greed? And if not, will he give his latest book deal money ( $500,000) to charity even though he's not gonna get a tax deduction for doing so?

- So why are those of us against national health dumb?Have you ever considered that you might be wrong ( and thus the dumb one)?

- What Obama " magic" should we not criticize- free condoms? mag/lev trains from Disneyland to Vegas? how about the largest deficit in the history of the world for the next TEN years? Also, maybe you could list his qualifications and accomplishments that tuened you on in the first place.

- As to criticizing BO, did you not criticize Bush? Bet you did. I remind you that only 53% elected him. The rest of us will continue to exercise our right to free speech until it gets taken away- our apologies.

Obama is always thinking a few steps ahead. THis plan is simply being put out there to justify a takeover of the banks in a few weeks (which is the correct thing to do). He is doing this so that he can play the 'we tried everything else' card.

I don't think Timmy can pull this off. Like it was posted here already .. they call these TOXIC assets. And they are not referred to as that for no reason. Not many buyers will step up and more time will be wasted. I agree with Krugman. Nationalize the Banks. Let those with Toxic Assets go broke. The Bozos on Wall Street were sickening once again to-day in their exuberance. And more innocent suckers were sucked back into the market. I don't see this Rally going much farther. It's just a game for those irresponsible clowns.

David,you should try not to be such a brown noser to the Obama addministration.Do you really think its a good idea to spend trillions and trillions of dollars that we dont have.Obama will spend more money in two months, then Bush spent in eight years.

I have read this column by David while sitting in Shanghai, China. I have just written an essay about what is happening in both China and the U.S. and much to my consternation how China is getting ir right and we are getting it wrong. From afar, one of my concerns has been the lynch mob mentality of going after AIG. I fear that we are going to do more long term harm to our country for the precise reason that David mentioned. Like them or not, be jealous of them or not, but we cannot scare away the major players in our capital market by threatening them with retroactive tax penalties for obtaining benefits that are legally theirs. This lynch mob mentality will scare people away from our capital markets and cause some of our best and the brightest in the future to think twice about careers in our capital sector.

This problem is so complex that No One Group can device a coorect plan. We need the intellegetual giants like Gietner and O'Bama as as peopel and poeples at the all levels of corporate amercia. We need the titans andme lower level experience and with businesss knowledge to lead us through the CRISIS!!!!

The Plan will go through many startss and starts!

For the unfailing Obama supporters I say this: he knows absolutely NOTHING about economics and has to rely on his old Prof Geithner to think for him. This isn't about getting out of Obama's way, it is about the absurdity of following the lead of someone like Geithner who was part of the original problem in the first place when he was at the Fed. If the gov't (us) is going to take 95% of the risk why not take it all as well as 100% of any profitability? What IS the point of taking the lion's share of the risk and the lamb's share of the profit unless you are wanting to line someone's pockets?

Additionally it is INSANITY to be contemplating this huge deficit so that OBAMA can carry out his three-pronged approach to re-engineering our way of life. Wait UNTIL the economy recovers before you spend even more money we don't have.

Ok...let me get this straight. What got us to this point was the way things worked before: Banks held homes and let private investors come in and put a small percentage down on the house in the hopes that the value would rise and both could make a profit. Housing prices then get overblown and housing market comes tumbling down allowing the world to enter a long-lasting global recession. Hurray??

The Obama-Geithner plan: GOVERNMENT (meaning our tax dollars) hold homes and let private investors come in and put a small percentage down on the house in the hopes that the value would rise and both could make a profit. Sounds familiar right? Can you guess what's going to happen next???

(Just so you know all I did was copy and paste what the banks and private investors were doing before the collapse of the market and replaced only one word......Bank for Government (us!))

Try to remember it's the worst economic crisis since the depression. It's not like there's any great options. While Republicans and Democrats enjoy plentiful ammo hit each other with, remember this; it's either let the banks fail (which would cause all sorts of terrible problems people haven't even thought about) or create huge debt by putting the economy on life support and hoping it revives itself.

The best solution likely lies somewhere in between.

Isn't there one other thing to consider? The O Administration recently floated the idea that judges will be able to make decisions about how much certain home owners will have to pay back – in other words, some people may get the principle lowered on their mortgages.

My questions is: Who would be interested in investing in these toxic funds if some judge may come up in the future and lower people's mortgage principles – thereby lowering the value of any investment?

Am I understanding this correctly?

Yes I'll take some of that, provided those that did already have not choked on it, otherwise count me out. Its like a mine field, the private can walk 200 meters ahead of me, where he steps and did not get blown away, I will follow.

Geihtner, Summers, Dodd and Obama are all owned by the by the financial services industry. The taxpayers are going to pony up 95% of the cash for the trash and the "private investors "(i.e the same people who created this mess) will put up 5%. So once again the ordinary Americans will be forced to assume most of the costs and the risks of fixing the mess that the over class has created. This is the change we are supposed to believe in?

Sounds a lot like gambling to me, but if I make a bad bet, nobody has a bailout for me.

I agree with Jennifer H. completely.

I'd add that even well-regarded economists like Simon Johnson know that Obama needs to break the power of the oligarchs NOW. That's not what he is doing. Instead, he is helping them gain even more power. Very bad move.

Oh David, would it be that this is so simple as you say!
It is not! the problem is not a socialist style bank nationalisation or selling toxic assets to the government or a combination of government or private investors. The problem is the same whatever you do except that when the government pumps money in that allows the banks to lend to stimulate good parts of the Economy.
The problem is a whole bunch of people like it or not are going to suffer because of a property market asset bubble, huge speculation in currencies, commodities, stocks and bonds that had no economic fundamentals behind those transactions and the property bubble and speculation elsewhere exacerbated by Leveraged borrowing by hedge funds which is almost now a bad debt to the banks created a geometric effect on Insurance companys who failed to see the real level of risk.
The reality if 10,000 was an index in 2007 end somewhere in future 7,000 is the best that can be hoped for i.e a 30% loss to banks hedge funds and main street. whether that is real cash or debt exposure depends on each indivu=idual but we will all apparently be 30% worse off unlees we create the same problem over again = put appropriate regulations in place!!
Regards,
Hodgson.

Thank you, David. Professionalism at its best.

Infamous principle of leverage – Indeed, ironic.

Why the recent uproar over the AIG bonus scam when their enethical and deceptive practices have been know for quite some time?

-looking forward to a sunny forcast in the financial sector as it's been raining for far too long.

The problem here is that it is a "heads, investor wins, tails, taxpayer loses."

If nationalization is needed, then do it. We take the risk, WE get the reward.

Otherwise, it is just another give away of our tax dollars to others who didn't earn it.

Why are Obama and Pelosi SO opposed to slashing taxes across the board?

More money in OUR pockets, we pay BILLS, we pay down DEBT, we save and we SPEND. Our "own" stimulus in our own areas.

Our LOCAL TAX COFFERS benefit. More money in banks via deposits mean they are MORE LIQUID.

More money in our hands gives banks more confidence in ABILITY TO PAY.

It's so simple. All it takes is the democrats giving us OUR money back that WE ALREADY EARNED.

But Pelosi won't even forgo the Congress' automatic 4900 raise of OUR money that THEY took.

Aren't they like Aig? Rewarding themselves for failure?

Slight correction to my earlier comment: "As for me, I favor intellect over blind faith and not the unrelenting criticism of people that are trying like the devil to make things better."

Whew!