One thing that RedState has been concerned about is the valuation of the MBS that the federal government would be buying in the $700 billion bailout. As Blackhedd says,
Get the valuation too low, and a lot of banks and Wall St. firms will bust because of the capital losses. Get it too high, and it’s a big transfer of wealth from the taxpayers to Wall St...
[On Sept 23] in open Congressional testimony, Bernanke finally spilled it: the purchases are to take place at “a price close to the hold-to-maturity price.”
I’ll say it straight out: that would be far higher than the current market for these securities. The Troubled Asset Relief Plan is a bailout of Wall Street, at taxpayer expense. Pure and simple.
This puts everyone in a very difficult position, for two reasons: First, it’s morally wrong and politically a disaster.
Blackhedd then goes into the "root causes" of the problem.
The House of Representatives, yesterday, voted down the bailout bill that went from 4 pages in length to over 110 pages long (with a lot of pork attached). A ton of Democrats voted "No" (94, or 40% of the Dems) along with the 134 Republicans (67% of the Repubs). Twelve (yes, 12) of the Dems committee members votes "No" despite Nancy Pelosi pointing fingers at those across the aisle. Now why would that be? Karl Rove explains here: