Thursday, August 20, 2009

Yet More Math On This Blog

I'm not the greatest at algebra but I do know enough about math that this is a rotten deal.

Note that the PPIP program:

Has the Treasury matches whatever a private investor puts up, then credits 6X as much capital. So if the Chinese are buying $2 billion, the US puts up $2 billion, and then the PPIP allows the purchase of $24 billion of distressed assets in the open market.

All for $2 billion dollars. Oh, and the FDIC would guarantee the debt being issued by the PPIP.

Thanks to Muffy.

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