Wednesday, January 28, 2009
Several trillion more may be needed for bailout, to mop up toxic assets: the "schizoid economy"
On the day that the House passed the first stimulus package – with no Republican votes, Geithner is hinting that soaking up the “oil spill” of toxic assets could cost 3 or 4 trillion, sums that we would have no way of managing without eventual inflation or calls from foreign investors.
The New York Times story is by Stephen LaBaton and Edmund L. Andrews, “Geither Says Plan for Banks is in the Works” (Jan. 28) here but Yahoo! reproduced an AP story by Daniel Wagner warning that hundreds of billions more will be needed.
There will always be a temptation to look for pockets to pick, as I wrote on my main blog Sunday. We face the "Schizoid Economy."