Great Days in Securities Fraud

by: Greg Newton

Mark-to-market. Mark-to-mystery. Now, Mark-to-Madoff.

The Obama administration is close to deciding on a plan to purchase bad — or non-performing and illiquid — assets from banks, according to industy (sic) sources. The plan could be announced early next week.

The so-called “bad bank” plan, would address the key problem of how to price the assets by using a model-pricing mechanism. The model would take account of the government's ability to hold onto assets, even to maturity, and pay for the (sic) them with cheap funding.


Result: the government might end up paying more
than current market prices for the securities.

Another triumph for The Price Discovery Suppression Society. And, no matter what, the crookes will be paid. Again.

by Steve Liesman
CNBC Jan. 27 2009

by Robert Schmidt and Alison Vekshin
Bloomberg Jan. 27 2009