That is, down the drain! In yesterday’s Financial Times an article discussed the delay (at best) of the US government asset purchase program. If the plan turns out to be outright scrapped, I will be even happier! I have always thought (and still do) that direct capital injection in the struggling firms/banks would be better than ad hoc purchase of distressed (mortgage?) assets (as long as there is an ultimate reprivatization of course.....).
As I wrote in an earlier entry (“700 miljarder dollar frågan: kommer bail-out planen att rädda oss?”, 29/9 2008) I see many problems with the bail-out plan (pricing issues, substantial non-mortgage debt problems, unfairness etc.). My rather spontaneous feeling is instead that a substantial equity position in these banks is the best option for the tax payer, considering the situation we have ended up in.
In fact, I was early on (see “I am soo disappointed”, 11/12 2007) skeptical to the Super SIV suggested by Mr Paulson as well and suggested them to scrap the whole idea. They listened to me that time (magari, I wish that was the reason....) and scrapped the plan. Now, let’s hope for the same luck with the TARP, scrap it!!!
