The bailout debate

JA says this reminds him of a spoiled child, a girl who would get what she wants and will scream if she doesn’t get it and to an extent the markets are doing that now. they’re screaming and threatening, they’re holding a gun to their own head. (So where do we stand now then?) What’s happening is an intense argument over the price. The banks have a lot of assets on the books and no one is sure what they’re worth, which causes a loss in confidence. So it’s necessary to create a price so the markets and banks can function. The problem is that you plainly can’t overpay for those assets if you’re paying with taxpayer money. Therefore Congress doesn’t want to pay too much, but there’s a risk that you won’t solve the problem if you don’t pay enough.