Oct 22 2007
The Super SIV & the Role of the Treasury
“At least one bank representative suggested that Treasury step in with some money to help bail out the firms, the people who attended say. Mr. Steel told the group that wasn’t an option: Treasury would only back a private-sector, market-based solution. “We bought the sandwiches, and that’s it,” Mr. Steel told those assembled.”
I’ve seen the “bought the sandwiches only” sentence quoted all over, but this is the only time I’ve come across the sentence prior to it. That makes me feel really confident the taxpayer won’t be backing any of this in some form or another. Of course, stabilizing the credit markets and all the inflated asset values (artificial pricing vs. natural pricing mechanism in the economy) it supports doesn’t fall under the Treasury’s Plunge Protection Team’s authority, right?
We are joking, of course. When the Wall Street Journal is also publishing articles like this one [Super-SIV Could Be Super Flop For Market It Is Meant to Help] we encourage readers to keep their eyes open.
