Tuesday, October 21

Bailout Package Summary, A goodnight Kiss

Is it going to fail?

Well, it might. The basic idea is that we can buy up all the bad mortgage debt and banks will lend again. It's the equivelant of killing the boogey-man that keeps rich Americans from sending money to Bank of America: boogey man might take away all of our money!

Then add in $200 billion directly to the banks by buying stocks, which creates $2 trillion in new lending because banks lend out more than they have, and you have yourself a cool anti-recession prescription.

But it all depends on how big we think boogeyman is. All the mortgage-related stuff might be tens of trillions of dollars in size. A $700 billion goodnight kiss from Mommy Pelosi might not be enough.