This is fun stuff. Paul Krugman writes on his blog about the newest reason for the suggested bailout: Price Discovery:
A sneaking suspicion
So now the whole rationale for the plan is "price discovery": we're going to throw lots of taxpayer funds into the pot because that will let us find the true values of troubled assets, which are higher than the fire sale prices out there, and so balance sheet will improve, confidence will return, etc, etc..
So I just did a Nexis search trying to find out when Paulson and Bernanke started talking about price discovery, which we're now told are at the core of the plan's logic. And the answer is …
Yesterday.
I can't find any use of the term, or even a hint of the argument, until yesterday's Senate hearings.
One possible explanation. It wasn't until yesterday that they realized that it would actually be necessary to explain themselves.
High finances are not my field of expertise, so I may be very wrong about all this, but I thought the markets are all about values as set by the markets, not by some horrible government bureaucrat. So it looks like the plan was to pay more for the assets than they are currently worth. We'd be the ones paying that "more."
Do read the rest of Krugman's post. Heh.