Links for 2008-09-24

  • Getting real and letting the cat out of the bag | Paul Krugman – “So the plan only helps the financial situation if Treasury pays prices well above market — that is, if it is in effect injecting capital into financial firms, at taxpayers’ expense.
    What possible justification can there be for doing this without acquiring an equity stake?”
  • EconLog | Hold-to-Maturity Pricing, Arnold Kling – “It’s hard to know how home prices will behave, but right now if I were pricing the risk (something I used to do for a living, unlike the key decision-makers in this bailout), I would include a lot of paths where prices go down. That would make the “hold-to-maturity” prices of the mortgage securities, properly calculated, pretty low in many cases.”