Some reaction around the web on the proposed bailout plan. Yves Smith:

This is a financial coup d'etat, with the only limitation the $700 billion balance sheet figure. The measure already gives the Treasury the authority not simply to buy dud mortgage paper but other assets as it deems fit. There is no accountability beyond a report (contents undefined) to Congress three months into the program and semiannually thereafter. The Treasury could via incompetence or venality grossly overpay for assets and advisory services, and fail to exclude consultants with conflicts of interest, and there would be no recourse. Given the truly appalling track record of this Administration in its outsourcing, this is not an idle worry.

Paul Krugman:

... there’s no quid pro quo here nothing that gives taxpayers a stake in the upside, nothing that ensures that the money is used to stabilize the system rather than reward the undeserving. I hope I’m wrong about this. But let me say it again: Treasury needs to explain why this is supposed to work not try to panic Congress into giving it a blank check. Otherwise, no deal.

Henry Blodget:

... the key question is what price the government will pay for those assets. This will determine how much (if any) capital the banks need to raise to offset the losses and, thus, what their stocks are currently worth.

Felix Salmon:

American taxpayers will have new obligations: in order to buy those bonds, the government is going to have to borrow hundreds of billions of dollars. That's new debt, and government debt. But there's no government guarantee on anything. And if you own a CDO or some other mortgage obligation, the government is definitively not going to step in and make sure you get paid in full.

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