http://www.nytimes.com/2009/02/10/business/economy/10bailout.html?_r=1&ref=business Geithner Said to Have Prevailed on Bailout NY Times February 9, 2009 By STEPHEN LABATON and EDMUND L. ANDREWS
"It intends to call for the creation of a joint Treasury and Federal Reserve program, at an initial cost of $250 billion to $500 billion, to encourage investors to acquire soured mortgage-related assets from banks... "...Nor will the government announce any plans to replace the management of virtually any of the troubled institutions, despite arguments by some to oust current management at the most troubled banks." "Finally, while the administration will urge banks to increase their lending, and possibly provide some incentives, it will not dictate to the banks how they should spend the billions of dollars in new government money."
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Incredible. They're making the same mistake Japan made in 1991, by creating a zombie bank which will take over the bad assets. It won't work and will devour trillions of taxpayer dollars. The only solution is to take over the banks, fire the managers and erase the bad debts.
-- DRR