Now that the details of Geithner's toxic asset buy-up plan are known, the sharp pencils and spreadsheets are doing the math. Since math is non-ideological, we get to see the naked truth unvarnished by ought-tos and shoulds. Many people are presenting the accounting details, so I'll just start the link list here and give you the takeaway up front.
Bottom line: the Geithner put provides an immediate, direct transfer from the FDIC to bank shareholders. The Treasury and the private investors risk only 7.15% of the bid price on toxic assets apiece, and the balance of the bid over the expected performance of the asset is funded by the FDIC through non-recourse loans.
This means the shareholders profit immediately, every dollar of asset performance is split between the Treasury and the private investors, and every dollar of non-performance comes directly from the taxpayers.
The “Geithner Put” Part I
The “Geithner Put” Part II
Geithner Plan Arithmetic
Will Geithner and Summers Succeed in Raiding the FDIC and Fed?
Open Letter to the FDIC
Modeling an FDIC Robbery