PEU Slices and Dices What the Geithner Plan is Really All About

Forget the soaring stock market today, given how much money Bernanke has pumped into the system, it would have gone up if DJ put across its wire today that Geithner tied his shoes all by himself. That's what up markets do, they react to the upside on any kind of news.

The most important indicator to me was not the latest move by Geithner to shovel more money to insiders, but the Simon Property Group debt raise last week.

That was real money put up by people who don't have printing presses, and they put it in the REIT sector!

As for the latest Geithner scam, I like the way PEU put it:

The U.S. government must be one ugly date. Treasury Secretary Tim Geithner will offer up to 97% taxpayer financing for public private partnerships (PPP). Private investors only need pony up 3% to have a shot a big profits from toxic bank assets. Up to 85% of funds come from cheap nonrecourse loans. If the products implode, the PPP can hand back the junk and walk away from the taxpayer subsidized loan.

However, those terms aren't attractive enough. What do the private equity underwriters (PEU's), hedge funds and sovereign wealth funds want? The NYT reported:

1. Non or limited disclosure
2. No compensation limits or special tax increases
3. Clear, unchanging governance rules

The Obama team has given the big money boys reason to participate. Another $1 trillion round of corporafornication is in order. Belly up to the bar!

Keep this in mind when you read all those stories about how the Treasury has to twist private investors to get in on this deal.