February 11, 2009

Two takes on Geithner's TARP, Part 2

Krugman and then David Kotok.

Of course, additional details are going to come out related to mechanisms for price discovery (using discounted cashflows, probably) for illiquid assets and the stress test designed for the banks. It's the latter that's going to be most interesting to me (the increase in the Fed's balance sheet was going to happen regardless... and, frankly, should be happening in this environment. That's WHY we have the Fed) especially because, at it's core, it's going to depend on asset valuations which leads us straight back into (oh, you had to see it coming) price discovery.

You could also call it short circuiting FASB.

Posted by mcblogger at February 11, 2009 04:34 PM

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