Interesting news day as Treasury goes round with Congressional leadership as to the nuts and bolts of “the plan”.  Sounds like the equity stake issue is still out for debate as of now (1425 MDT), among other things. 

We’ve had a fair number of emails and calls today asking our opinion of the plan overall – we posted over the weekend before details were available that we were in favor of an RTC like entity, thinking back to the function of the RTC back in the ‘80s.  The current structure of the plan is in our opinion unacceptable for a number of reasons, particularly the lack of oversight, the displacement of bad mortgages from the hands of irresponsible lenders onto the backs of innocent taxpayers, the punishment of prudent taxpayers and homeowners, the destruction of the sanctity of contracts, and the fact that the funds involved really could be construed to have no limits – to name a few things.  The addition of $1 trillion to the national debt with the stroke of a pen ($700 billion rescue and $400 billion money market guarantees) very well might sink the dollar – world market and oil futures behavior today support that possibility. 

On a another track - a couple of our historically savvy board members have suggested that the most obvious genesis point of the current credit debacle was Clinton’s repeal of the Glass Steagall Act in November of 1999.  We’re digging up some information just for historical perspective, and while there are a plethora of issues and events that are contributory, the repeal of this act may be one of the keys. 

Finally, on a far other track - there’s a post up on The Big Picture that takes one of the more funny stabs at the Paulson Plan we’ve seen so far – here’s the link to the website they’ve discovered, but be warned, those who are offended by scatological slang and humor will be offended at this. 

More on Glass Steagall to come. 

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