I supported the bailout bill because I believed buying the illiquid CDOs would fix the credit crisis. Henry Paulson recently announced that TARP funds will no longer used for buying troubled assets. I was shocked by the change. After all, doesn't TARP stand for Troubled Asset Relief Program? In spite of the existence of massive troubled assets and the problems they have caused, the Treasury plans to divert the funds to address the looming credit card crisis.
To me, the Bush administration has pulled what I consider a bait and switch - gaining support for a specific purpose and then using the funds in a completely different way. I am disappointed in Mr. Paulson's change of course. I would not have supported the bailout bill for the way the funds are currently being used.
For more on Reflections and Musings, check back every Saturday for a new segment.
This is not financial or political advice. Please consult a professional advisor.
Copyright © 2008 Achievement Catalyst, LLC
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1 comment:
I agree with you 100%. Even setting aside the bait and switch, it sends the message that the administration really has no idea what it's doing. I think that is the overwhelming message the market has heard and responded by declining even further. It seems like we have no adult supervision and I think that fact is what's really spooking the markets.
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