But Barron's analysis of the plan indicates that taxpayers and their proxy, the Treasury Department, will fare well in the bailout and should actually turn a profit over the years ahead. For one thing, the mortgages and mortgage securities that the government will be buying back from commercial and investment banks, credit unions, insurance companies and others aren't as toxic or wide-spread as commonly assumed. Treasury's purchases should not only help free up credit markets but boost the prices of securities that are backed by home loans. That, in turn, is likely to arrest the relentless loop of falling home prices spawning further mortgage defaults and foreclosures that, in turn, result in further declines in residential real-estate prices.
"Essentially this secondary effect would do much to lift housing out of its funk and actually improve the performance of the securities that Treasury ends up buying," says Jeffrey Gundlach, chief investment officer at major mortgage fund manager TCW. "Thus, I think that there's a good chance that the bailout plan will be a win-win for both the taxpayer and the financial system."
My comments: Here is article the moron who was arguing with Schiff referenced. Even it this argument and analysis is true, do you think taxpayers will actually see a check?
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