Bait and Switch...Paulson really wants to bail out Bad Consumer Debt... [View All]

[Junkdrawer]

All weekend, they jawboned how the US Treasury will MAKE money buying Mortgage Backed Securities at 20% discounts, removing the 10% bad, and then reselling for a profit.

Now, we find the REAL target is the Consumer Debt Bubble:

U.S. broadens bad-debt bailout plan

WASHINGTON – The federal government’s pledges to pour $700 billion into buying up downgraded mortgage assets and $400 billion into stabilizing money-market funds may backfire, some analysts say. In the long run, “the downdraft on the dollar from the hit to the balance sheet of the U.S. government will dwarf the short-term gains from solving the banking crisis,” David Woo, London-based global head of foreign-exchange strategy at Barclays, told Bloomberg News. “As we get to the other side of this, the dollar will get crushed,” agreed John Taylor, chairman of New York-based International Foreign Exchange Concepts Inc.

The Bush administration yesterday broadened its bad-debt bailout plan beyond mortgage-backed securities, as U.S. Treasury Secretary Henry M. Paulson Jr. announced plans to allow the possible purchase of other “troubled debt,” including consumer automobile loans or credit-card debt.

“The Treasury’s thinking is to make it as big and wide as possible, so they have the flexibility to act if need be,” Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors, told Bloomberg News. “There have been losses on a whole range of U.S. debts, and as the economy deteriorates in response to the housing slump, those losses could escalate.”

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http://www.pbn.com/stories/35311.html

Still think this will turn a profit? :shrug: