The Housing Chronicles Blog: White House already overhauling rescue plan

Saturday, October 11, 2008

White House already overhauling rescue plan

First we'll buy up distressed mortgages, and, wait, maybe we should just inject some capital into the weaker banks. After all it's only $700 billion plus change. Still, some economists had originally suggested that injecting federal funds into the banking sector -- in effect partly nationalizing the financial system -- was the better way to go. From the New York Times:

Two weeks after persuading Congress to let it spend $700 billion to buy distressed mortgage-backed securities, the Bush administration has put that idea on the back burner in favor of a new approach, which would have the government inject capital directly into the nation’s banks — in effect, partially nationalizing the industry...

No comments: