Question for smarter people than I about the bail out.

[rateyes]

If we're going to spend 700 billion dollars for this bad paper, and then resell it later on...what the hell is going to make the bad paper good enough that someone will buy it from us?

:shrug:

[Mist]

1. Neither Paulson nor Bernanke answered that question yesterday--in a nutshell:

the market will work it's magic--with this big boost, markets keep working and keep going and that increases the value of everything. Their other answer was:this is complex! this is complicated! booga booga booga! Complex! Complicated! Just trust us!

[Kutjara]

2. Short answer: nothing.

Slightly longer answer: We're buying worthless assets, so that the banks can go on making profits while we pour our tax money down the drain. Many of those assets are mortgages, loans, and unsecured debt that are very close to default. Only a tiny fraction will return to performant status. The rest is worthless.

The bailout is the equivalent of taking $700 billion in cash, putting it in a big pile, dousing it in gasoline, and setting it alight.

[rateyes]

3. That's what I'm figuring. nt

[boomerbust]

4. It seems strange

The only bank stock that is notably up right now is Goldmann Sachs