Timothy Swift

Steve Waldman at Interfluidity thinks private investors in Treasury's PPIF ("let's call them PIMROCK") could be "convinced" by Geithner et al to buy toxic assets at way above market price - thereby bailing out the banks and saving their bondholders (um... PIMROCK). Scary theory.

at 6:1 with favorable financing why wouldn't they raise their bid, if one existed, to something closer to what the banks are offering? This is a massive distortion of the market...

What I haven't figured out is if there is $2 trillion in bad assets. Wouldn't there be $2 trillion in bad assets after this trade? The risk profile only improves at the right price...

Political meddling is never the answer and AIG et al should be let to fail.