Because the banks are insolvent, Obama's TARP will also fail
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No it is not in any way reasonable that the Obama presidency has already failed.
The announced plan isn't much of a plan, it's more of plan for a plan.
The end result could succeed or fail, we don't know yet.
The plan that's being speculated on, will most likely not work, because as stated there's just not enough willing and available capital to save the banks.
But the administration's eventual plan might work.
It feels to me like they are stalling for time.
Who knows their plan A might work, and if it doesn't there's still plan B, a.k.a. what Sweden did.
No one should be surprised that the president isn't whipping out the Swedish solution within weeks of taking office.
Surprise socialism, does not make for a good start of a presidency, not in America.
But bank nationalization might very well still happen.
I think having home prices drop and credit dry up is probably really good for the economy and suspect stimulus money spent on useful infrastructure is a much better use of taxpayers money, but I don't know.
PS: The banking sector was over valued in 2005, assuming it needs to go back to those prices before it's healthy is a mistake.