Thursday, February 5, 2009

Reduced Stimulus Package to Be Announced Monday

CNBC reports that the Obama administration will release full details of Tarp V3 on Monday which is set to consists of less than expected total assistance, the bulk of which will be based on ring fencing, or bad asset guarantees, with the bad bank idea virtually scrapped. Also it is murky whether mark-to-market will be eliminated as some rumors earlier today have suggested and seems to be the reason for market euphoria in the past 3 hours (also, buying stocks on the premise that asset mismarking will lead to higher valuations goes so much against any concept of efficiency that we are disgusted to even comment on this travesty).

CNBC estimates the current plan will be paid out of the remaining money on the original Tarp V2, roughly $350 billion, whose original incarnation has already lost 30% (see prior post).

Btw, today is one of those days that make otherwise intelligent people really confused: S&P, gold, treasuries and oil are all higher. Brilliant. Sphere: Related Content
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