Will the Paulson plan make money? Don't forget where we're getting the cash!

We are Americans; let's lean on each other as this time will pass. We
must hold each other down in a time of need, as the Government find a
solution to light.

A plan come from a wil and the know how.

A strew up comes from greed.

Action moves us forward thinking takes us backward.

I love this part of the bailout:
Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

Sure you can have 700 bil Hank and Ben, and we trust you so much we also aren't going need to know how you use it, and we won't even be able to hold you accountable. Maybe, just Maybe time to question the revolving door between the private sector and government.

Buffet, Soros, et al cannot print their own money, and cannot borrow large amounts of money at 1-3% interest like Treasury can.

The government is probably going to be buying mortgages with 6-9% coupons at 50-60 cents on the dollar, in which case they'd be making up to 18% per annum on our money. Even allowing for considerable defaults, this is likely to be profitable.

Buffet endorsed the Paulson plan, saying it's what he would do if he ran Treasury.

I believe the bailout will result in gains for the taxpayer. If you remember in the early nineties congress created the RTC, through this body the banks were able to obtain liquidity and the RTC disposed of the commercial properties at a profit.
We move in cycles, this time the crest of the residential real estate market climbed too high, not only in the number of sales but also in the increase in the price of the homes that were sold. What we created was a bubble not value, similar to what was happening with oil prices. Similar to a chain letter that collapses after few rounds because the number of people diminishes, home buying reached a point that it became unattainable by most people, regardless of the availability of financing. The trend could not be sustained beyond a certain point, similar to the price of a stock (including Berkshire) when it reach a certain point its ability to generate more buyers shrinks, not necessarily because its future is limited , but because its price is less affordable.
Homes climbed in price, due to speculation to an unrealistic level that most people would not take the chance to buy, even if financing was available. The notion that sub prime markets created this situation is near sighted. All mortgages became risky, because the value was not there, and more and more people realized that a fall in price was imminent, and therefore the clever act will be to sell while the optimism is still alive. If we add all the factors that brought the big boom to the housing industry, we'll find that the very same factor contributed to the bust of the bubble. This down trend is not a short lived trend. Prices will have to come down to reach the real market value before a change in the trend will occured, my prediction is that the trend will continue for at least three more years. Greenspan and others who ran the cycle put the emphasis on the housing market to carry the booming economy of the Internet boom, when this boom collapsed, What Greenspan did not realized was that loosening the money supply will generate an enormous trend of speculation that will also push the home prices upward, and by doing so will create a value that is unsupported by real substance, similar to oil prices, that were driven by speculators to $145.00 a barrel, when drilling cost and shiping did not change. The government bailout is a good step, it will drop the number of foreclosures. It will give the banks more liquidity to loan money to businesses, and it will enable the government to sell homes at reasnable prices, stablizing the market values. Lower prices will generate more qualified buyers to enter the market.