PULSON BACK TALKS INSTEAD OF BACK STOPPING!!

http://mrmortgage.ml-implode.com/2008/10/31/tarp-troubled-asset-relief-program-are-banks-the-troubled-asset/


TARP - ‘Troubled ASSET RELIEF Program’? Are Banks the ‘Troubled Asset’?

Posted on October 31st, 2008 in Daily Mortgage/Housing News - The Real Story, Mr Mortgage's Personal Opinions/Research

More TARP anger and confusion is surfacing every day. The blow back with respect to it looking nothing like what originally was sold to American tax payers is getting heavy. Even the name TARP (Troubled Asset Relief Program) makes no sense any longer, unless the banks themselves are the troubled assets to which the acronym refers.

The TARP bailout went from a 2 1/2 page $700 billion blank check for Paulson to a 400+ page porked-up money grab like none other in history - it’s still a blank check but now for the banks as well. I was told one bank is putting the funds to use buying energy-related Bonds. Many, including myself, knew that while spending vast amounts of money strategically was needed, this was a rushed deal with so few specifics it can’t be trusted.

Within two weeks, the program has become vastly different from what the politicians begged American’s every day on TV to support and what Paulson and Bernanke stood up under oath and testified to. That is, ‘our financial system is melting down and there is a very strong chance we will go into a depression unless we can buy troubled assets from financial institutions balance sheets, hold them for longer than the institutions can and magically make money in the future.

If we give this money to the Treasury, the banks will begin to lend to businesses and consumers once again and the system will be saved’.

During vote week, the media did all they could to get this bill passed.

2008-11-12 — bloomberg.com
Residential and commercial-mortgage backed bonds tumbled after Treasury Secretary Henry Paulson said the government no longer plans to buy devalued mortgage assets, credit-default swap indexes suggest.
...
``No one in the market knows what to believe any more,'' David Castillo, a senior trader of structured-finance bonds at Further Lane Securities in San Francisco, said in an e-mail today. ``Things change on a daily basis.''
You can say that again, David. The government hasn't "bailed out" the private markets with its litany of ad hoc interventions this past year. It has destroyed them.