Getting Our Money Back. . .
I don’t care what anyone says about them. Purely from the perspective of a Market participant, these guys are thinking with their helicopter-caps on, and fully engaged.
What do I mean..?? Simply this: President Obama and the ‘brain trust’ in his cabinet have outlined plans for what I believe to be a simply brilliant, Market-driven solution linking Wall Street, to Main Street that may guarantee that taxpayers recoup their investment of nearly $2 Trillion in the federal bailout of Wall Street. The New York Times outlined some details of the plan today, saying:
‘The funds, the thinking goes, would buy troubled mortgage securities from banks, enabling the lenders to make the loans that are needed to rekindle the economy. Many of the loans that back these securities were made during the subprime era. If all goes well, the funds will eventually sell the investments at a profit. But, as with any investment, there are risks. If, as some analysts suspect, the banks’ assets are worth even less than believed, the funds’ investors could suffer significant losses. Nonetheless, the administration and executives in the financial industry are pushing to establish the investment funds, in part to counter swelling hostility against the financial industry.’
Whatever the eventual outcome as the details get worked out; and based on a back-of-the-envelope polling of some in my industry network, a plan like this will likely be well-received on Wall Street, and it may induce other Global Market actors to generate similar plans. The aggregate affect of this, if such a plan does go into full effect, can act as an added boost for fiscal stimulus around the globe, perhaps shortening the impact of the Global economic crisis. Expect to hear more details about this plan emerge after the Easter and Passover holidays, or twitter / e-mail me for more details and I will add you to my distribution list for the most up-to-the-minute research and details of the plan.
