What will it take for Treasury Secretary Timothy Geithners bank bailout plan to work?
It’s an opportunity to get some of those toxic assets off their books, but I’m not sure it matters how much of that stuff they get off their books. The banks increasingly know what these assets are. Over the last six months, they’ve put a whole lot of effort into understanding that. Now there’s a pretty good inventory of what those bad assets are. That’s not the same thing as valuing them, and the private firms in this partnership will mainly be the ones that value those assets. I really wonder how many firms will want to get into a public-private experiment if Congress is setting a midmanagement pay scale. You have to ask, do you trust the government to keep its hands off your business? How will we tell if it’s working? I want to see buyers willing to jump in. I’m not as concerned about sellers. The overall economy matters, too. If this program works, then the global economy will improve. If the global economy improves, then those assets will become more valuable. It becomes circular.