SO FAR SO GOOD!

(On January 25th I suggested:

There is a level of hopefulness in the prognostication that I'm about to put forth. My suspicion and expectation is that Obama is a pragmatic liberal intellectual.

The part of the bailout exercise that folks are drawing a blank on is how do you value the 'toxic assets'. I've stated that a private-public partnership that balances investors' interest with taxpayers' interest is the way to go.

How do you get there? The answer is simple ... time and price.

Set up a 'data swat team' to analyze the 'reports' coming back on January 31st.

Set up a bad bank, issue FDIC bonds out the back end to finance purchases and then ... just wait.

State that the government would be willing to entertain offers from folks that want to sell assets, each offer will be reviewed by the 'data swat team' to review whether the terms are satisfactory and then ... just wait.

And then pick the weakest sister that the Federales are pulling the strings on, say Citigroup, and purchase (Citigroup presents assets to the Federales at the price they choose) a batch of assets on a dollar-matched basis with pirate equity. You don't have to buy much ... set a price and let the markets take it from there.)

SO FAR, SO GOOD!

GEITHER:"I understand the desire for details, and I understand the disappointment about the lack of details today.But part of the disappointment is because people were hoping that we do things that, in my judgment, would have been too generous and not responsible for the taxpayers' money.I do not want to compound the mistakes of the last 12 months, when things were rushed out before they were ready, and strategy had to be adapted because of that. If that means that there is going to be disappointment with the level of details until we get it right, I will live with that disappointment because it is better than the alternative."

OBAMA: Well, you know, Wall Street I think is hoping for an easy out on this thing and there is no easy out. Essentially what you've got are a set a banks that have not been as transparent as we need to be in terms of what their books look like. And we're gonna have to hold out the Band-aid a little bit and go ahead and just be clear about some of the losses that have been made because until we do that, we're not going to be able to attract private capital into the marketplace. And so, you know, I think that you have two choices in this situation: you can prolong the agony and shareholders will be happy until they're not happy, and that could be a year from now or two years from now, or in the case of Japan, eight years later. Or you can just go ahead and acknowledge that yeah, there's, there's a lot of work that has to be done to put these banks back on a firmer footing.