There's no question that if they had left it (MTM) alone SKF would have gone up 15% today, imho. So, let me get this straight, Geithner's plan is to draw investors into the banks in order to buy up the their lousy assets? Yet, the new rule (today) says the banks can value the lousy assets higher, so why would they want to sell them? I may not be the sharpest tool in the drawer, but it don't make sense to me.
i think i figured out the 1-2 punch of how these two things work together...
they can value them at inflated prices based on computer models...
then private buyers buy them knowing they are overpaying because the government covers the losses.
so the taxpayer once again absorbs the loss..
The banks will now be able to inflate the value of these assets, placing them on the market for well above market value.
They will form another entity and use geithners new plan to buy the assets back at a huge discount, with the Fed and taxpayer taking on the risk.
Very good explanation here:
Actually it is very simple.
1. By pressuring FASB thru congress the BANKS have raised the value of their garbage.
2. Mutual funds are being formed to sell these to public-private partnership
3. Eventually the public you and me who get caught in the marketing blitz that is going to happen will buy these higher priced compost
4. The main purpose is to get the BANKS lots of money when they sell these
There may be assets that cannot be sold under PPIP. These assets may fall under FASB rule. So, the overall effet of PPIP and FASB reinforce each other in protecting the financial sector.
It's just confusing, Geithner says I will provide a plan that lets private investors buy the banks toxic assets and guess what, the public will back your investment. Then today they say the banks can price their toxic assets HIGHER. The banks will imho hold onto those assets now.
Think of it as an ant farm in a panic. One group over there frantically doing one thing (trying to rescue the banks from their toxic assets, ala PPIP), another group over there under a different General trying something else (tyring to rescue the banks by allowing them to fib on their health), another group over there quietly ferrying all of the anthill's treasure out the back door, a big ant in the middle preening in front of a mirror.
Assuming that government responses are well thought out and coordinated would make much of what you see confusing.