This is Treasury Secretary Paulson saying that, indeed, the administration wants Congressional oversite of this crazy plan:
And yet in the three page summary that they sent Congress on Thursday it says this:
Section 8. Review: Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
Is this the final looting of the U.S. Treasury before the Bush Reign of Error comes to an end?
Whoa -- it seems that Ben Bernanke ditched his prepared testimony and, instead, let the cat at least partly out of the bag."I believe that under the Treasury program, auctions and other mechanisms could be devised that will give the market good information on what the hold-to-maturity price is for a large class of mortgage-related assets. If the Treasury bids for and then buys assets at a price close to the hold-to-maturity price, there will be substantial benefits.
First, banks will have a basis for valuing those assets and will not have to use fire sale prices. Their capital will not be unreasonably marked down..."
As I wrote earlier this morning, the whole "take these assets off the balance sheets" line is fundamentally disingenuous; the key question is what price Treasury pays for the assets. And here we have Bernanke effectively saying that it's going to pay above-market prices -- prices that allegedly reflect "hold-to-maturity" value, but still more than private investors are willing to pay.
What is going on here?
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Tags: Hank Paulson, U.S. Treasury, Wall Street Bailout
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