Detox Plan: Taxpayers Fund 93%

Geithner announced the Detox plan.  Stocks went up for a great deal.  Investors probably are hungry for any positive headlines and don’t really want to read the content.  AP writes that the taxpayers will actually fund 93% of the purchase.  Krugman of course slams it like the first time he read it when it actually is the same plan half a year ago.  In a way, why does Krugman write as if it were a surprise to him? 

Gergen writes much more succinctly than what I did yesterday (and Eurasia Group): “there is a second question lurking that really only the President and Congress can answer: that is, whether private investors can have confidence that if they do invest, the lynch mob mentality we saw last week in Washington won’t come and plague them in the future. As the managing director of a major hedge fund told me recently, if this plan is good enough, our firm stands to make money. But then why should we invest if Washington is then going to get mad, take 90% of our profits from us retroactively and if I may be hauled up before Congress and vilified?”