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FORECASTING THE BAILOUT….I’m looking forward to seeing responses to this op-ed from Bill Gross of PIMCO fame:

I estimate the average price of distressed mortgages that pass from “troubled financial institutions” to the Treasury at auction will be 65 cents on the dollar, representing a loss of one-third of the original purchase price to the seller, and a prospective yield of 10 to 15 percent to the Treasury. Financed at 3 to 4 percent via the sale of Treasury bonds, the Treasury will therefore be in a position to earn a positive carry or yield spread of at least 7 to 8 percent.

….Democratic Party earmarks mandating forbearance on home mortgage foreclosures will be critical as well. If this program is successful, however, it is obvious that the free market and Wild West capitalism of recent decades will be forever changed. Future economic textbooks are likely to teach that while capitalism is the most dynamic and productive system ever conceived, it is most efficient over the long term when there is another delicate balance — between private incentive and government oversight.

Gross provides no clue about why he thinks the Treasury auction is likely to buy assets at 65 cents on the dollar, or why he thinks these assets will eventually sell for 75 or 80 cents on the dollar. And since the bailout plan would obviously help PIMCO, he has a pretty obvious personal interest in painting an optimistic picture of how well it will work.

Still, it’s a number, and you can’t fight something with nothing. We may now be entering a phase in which the price of entrance into the bailout punditry arena is a dueling estimate of just how well or how badly you think the bailout will turn out. Gentlemen, start your engines.

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is the first thing despots go after. An unwavering commitment to it is probably what draws you to Mother Jones' journalism. And as we're seeing in the US and the world around, authoritarians seek to poison the discourse and the way we relate to each other because they can't stand people coming together around a shared sense of the truth—it's a huge threat to them.

Which is also a pretty great way to describe Mother Jones' mission: People coming together around the truth to hold power accountable.

And right now, we need to raise about $400,000 from our online readers over the next two months to hit our annual goal and make good on that mission. Read more about the information war we find ourselves in and how people-powered, independent reporting can and must rise to the challenge—and please support our team's truth-telling journalism with a donation if you can right now.

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