ONLY IN THE USA

CHANGE THEY CAN CASH IN:
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Part of the comment below is critical of the Geithner plan, and of Summers. It was censored by the New York Times. The next day, unsullied by this sort of nastiness, the market rallied 7%. I am happy that the market rallied, but the fact remains that the plan is both incredibly unfair, and, even worse, cannot work, in the long run: one pail of water will not this fire extinguish.
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Bush was financially bad. Bush poured gasoline on the financial crisis. For example he allowed (in 2004) banks to go to a leverage of 40. In July 2007, Bush removed the no selling short on a down tick rule (after that the hedge funds were free to bear raid the entire market).

But Bush did not start the fire. The guy who started the fire is the guy who refused to regulate the Credit Default Swaps in 1998, screaming after the lady heading the U.S. Commodity Futures Trading Commission to prevent her to regulate, as she wanted. This is exactly why AIG had no provisions to cover its extravagant betting with the Credit Default Swaps. In 1999 that same incompetent character abrogated the Banking Act of 1933 (that maintained a distinction between banks and investing on Wall Street, among other things). That guy who started the fire was Summers, his assistant was Geithner.

Summers and Geithner should not be giving orders to society and advice to the president. They should be prosecuted under RICO. They are the origin of the fire, and Obama should learn to distinguish between arsonists and firemen.

Instead, the administration finally came up with its plan to restart the banking system. It consists into lending one trillion dollars of taxpayer money to the class of people who caused the problem to start with.
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Patrice Ayme
http://patriceayme.wordpress.com/
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Addendum (Not sent to NYT): In exchange for a trillion dollars of public money, the private investors are supposed to contribute thirty billion dollars of private money to the party. Thus the government of the USA will create, with public money, the largest hedge fund ever, with a leverage of 33. That privately managed hedge fund will entice the banks to surrender their “toxic assets”. Between friends, many tender things may happen. "Toxic assets" could be massively overvalued, for example, since they are paid with public money, using tremendous leverage.

After, and if, the private investors have grabbed the “toxic assets”, they will enjoy the income stream coming from them (since many of these “toxic assets” are made of mortgages glued up and all mixed together they bring the cash flow of these mortgages). If they unload and walk away after enjoying that income flow, it’s no problem, no problem for them, because the trillion dollars loan is “non recourse”, which means that the borrower can call it quits whenever so desired, without any consequences whatsoever.

Will one trillion do the trick? No. The bank holding companies' losses are at least 5trillions (say Goldman and PIMCO), and maybe as much as twenty trillions (say others). So what is the solution? Nationalizations (there are many ways to do them). Hedge funds do not like those. But they like trillions of public money to call their own. Is there trick to try before nationalizations? Yes, I have one, and it goes through the G20.