Tim Geithner, having already bailed out the American banks with public money is now trying to convince the Europeans to do the same (Geithner to float idea of leveraging euro rescue). Why write off the losses and move forward when you can get taxpayer guarantees and ensure a Japanese solution for everyone? By the way, remember the toxic assets that the TARP was going to buy from the American banks in order to clean up their balance sheets? They are still there. Banks don't sell anything at a discount unless they have to.
The problem, in our opinion, is that these alchemists are under the illusion that every problem has a financial engineering solution. Which is why we are wary of days when the markets seem to validate (how ever briefly) their approach. Does anyone really think the European problem is about not having dollars?
Leveraging the EFSF!!! talk about a credible long term solution...
ReplyDeleteNow the solution to the problem is the same as what caused the problem in the first place...GENIUS!