So, Hank Paulson wants the US taxpayers to make a loan to Wall Street. It seems that the big financial firms are underwater on the investments they made.
They don't want to provide actual balance sheets, just self-reported assets which may or may not exist. They want borrow the full value with no collateral down. Oh, and none of that pesky insurance against their defaults. They don't have any proof of income, and their employers can't really be reached. In fact, it's not clear they have any employment at the moment.
We're talking major league NINJA loans here. Oh, and it appears to be a 0% interest loan, too.
In short, the Wall Street banks are asking to be excused from the kind of underwriting of their credit-worthiness and ability to repay that typifies the toxic loans (subprime, ALt-A, prime, whatever) that got us into this mess in the first place. And Paulson wants to give them exactly that.
Hmm, would this be refinancing or a HELOC?
Update: And Chuck Schumer and Chris Dodd, the dynamic duo that helped bring us GLBA in the first place, are pushing hard to prevent any kind of oversight, restructions or even a faint promise of ROI for this massive transfer of wealth: Bipartisan Support for Wall St. Rescue Plan Emerges
And check out this chart for shits and giggles. More for this bailout than for Social Security. Nice.