Watching my senior Senator Chuck Schumer hold hearings on the Paulson plan:
He is extraordinarily self-serving and smarmy and has no qualms about using this opportunity to score political points.
700 billion dollars is a lot of money. But giving the SecTreas 150 billion and asking him to come back for more if he needs it is like sending a soldier out into battle with one clip in his M16 and asking him to come back for more if he needs it.
The Paulson plan is predicated on two items.
1. Taking deeply marked down mortgage assets off the books of banks probably at some premium to current marks or market. It will mean getting out of these investments at a reasonable price and possibly at a mark-to-market profit.
2. The confidence that now there is a buyer of last resort.
Schumer's idea blows 2. out of the water.
STUPID. STUPID. STUPID.
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