World Bank launches distressed assets programme - Risk.net

World Bank launches distressed assets programme - Risk.net: "World Bank launches distressed assets programme"

This program looks more like the Treasury PPIP/TARP and has copied the features of those, notably the "Public/Private" partnership dimension. Their is no discussion of the Equity/Debt distribution or source of the funds.

It is regrettable no one has thought about being a market maker on the distressed assets traded at refined levels of granularity as we proposed.

Geithner Plan: The False Dichotomy of Alternate Choices

Based on Meet the Press and This week interviews of Mr. Geithner, nobody at the the treasury seems to have seriously raised to the Secretary's attention, the possibility of a less costly, surgical, and more effective alternative through market making as I have advocated.

The False Dichotomy of Alternate Choices. False dilemma.

I cry a river over this.

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TALF Is Reworked After Investors Balk - WSJ.com

TALF Is Reworked After Investors Balk - WSJ.com

This subsidized lending program just looks like major league subsidy to the securities industry with layers of transaction costs that incentivize people to trade in potentially irrational way with cheap money and are likely to contribute to TARP assets price inflation . Why not just do market making as I have repeatedly suggested?

The key mistake here is that policy makers seem to confuse
- incentivizing trade on securities with high economic impact which should be the mission of the government here and would lead to a more rational underwriting industry practices going forward
vs
- encouraging the potential reckless issuance of new securities which may in fact perpetuate the practices that led to this mess.

Op-Ed Columnist - The Big Dither - NYTimes.com

Op-Ed Columnist - The Big Dither - NYTimes.com
This article shows how even the "best and the brightest" seem not to see that the best approach to address this issue is as I describe in my article with the government becoming a market maker on TARP's illiquid asset. Nationalization in my view is not the answer, nor is some of the establishment of some of the private/ public funds. This structures merely add transactions cost and may only tangentially address the core issue

Steve Forbes Says Barack Obama's Economic Policy Repeats George W. Bush's Mistakes - WSJ.com

Steve Forbes Says Barack Obama's Economic Policy Repeats George W. Bush's Mistakes - WSJ.com
I strongly disagree with this argument against mark to market. As for dealing with market illiquidity, as I explain in my article on how to price illiquid TARP assets, when trading of assets economically vital is disrupted, government should set in to play a market maker's role, one of the additional positive results of such an approach being to enable effective market to market.

It is unfortunate that many it is shaping as republican vs. democrat thing.

Introduction to BICs Exchange Systems

In this post, I just added a presentation that hopefully more clearly stresses the relevance and applicability of BICs as a sorely needed risk management tool

Fair Value Pricing, Government Market Making and TARP

I have just posted this on knol:

How to Value Illiquid Toxic Assets clogging up the banking system (Work in Progress)

This article argues that the administration would get a fairer deal in buying troubled assets by becoming a market maker on those assets bought at a most refined level of granularity using a proposed relatively straightforward market-making method. This approach further has the benefit of being minimally surgically invasive while most speedily addressing the problem.