Why not double down?

"Mr. Geithner, who was closely involved with the AIG bailout, offers no change ... His latest scheme is called the Public-Private Partnership Investment Program. But there is actually very little private skin in this game: It gives a handful of wealthy financiers huge nonrecourse loans to enable them to purchase toxic assets that the market supposedly won't buy at a "fair" price. As the housing crisis has shown, providing subsidized nonrecourse loans creates asset bubbles, not true price discovery. And bribing buyers to ramp up prices smacks of market manipulation." Amar Bhide

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The new program offers non-recourse debt financing at ~20x leverage to the hedge fund crowd. It is a free option of unprecedented macro scale: a massive call option on the taxpayer wallet at a 5% premium.   'Heads they win, tails the taxpayer losses again'.

So, form a hedge fund, buy the maximum you can. If it works, you're rich. If it doesn't, just walk away. You only have 5% down.  It's your best shot.

"a little song, a little dance, a little seltzer in the pants..." - Chuckles the Clown

If the hedge fund isn't working for you, consider buying TIPS & selling long dated treasuries.

Comments

[wtf]

http://www.zerohedge.com/article/matt-taibbi-asks-why-fed-gave-220-million-bailout-money-wives-two-morgan-stanley-bigwigs