Wanna Buy $700 Billion Worth of Liabilities?

What does it mean that the US taxpayers are buying $700 billion of liabilities?

They're not buying assets, you know.

If these mortgages were assets the financial institutions carrying them would not have collapsed.

These mortgages are liabilities.

So the Fed wants to borrow about three quarters of a trillion dollars from China, India, the EU and ,for all we know Canada, in order to finance the purchase of increasingly worthless paper.

This is genius.

Now I understand that it is no one's interest that the US economy collapse.

But if you're being asked to bankroll an enormous amount of money to someone, aren't you at least the teensiest bit curious about exactly what they plan to do with it and precisely what they plan to put up as collateral?

If they tell you they're going to buy a bunch of stuff that's really only worth a fraction of it's former worth and being further discounted almost by the hour, aren't you going to be nervous? Aren't you going to ask for a lot of collateral? Real value collateral? Like bullion? Or oil leases?

Or the keys to Capitol Hill?

Or all the above.

You're being asked to finance a vast liability by people who haven't succeeded at anything they've put their hand to in eight years.

I wouldn't do it.