Paying speculators to lose money

Calculated Risk links to this piece, demonstrating how the Treasury Department plan allows private speculators to make money while the Treasury loses money on worthless subprime assets under the Geithner Plan.

self-evident » The “Geithner Put”, part 1
The bank unloaded assets worth $5000 for $8400.  So the private investor gained $100, the Treasury gained $100, and the bank gained $3400.  Somebody must therefore have lost $3600…

…and that would be the FDIC, who was so foolish as to offer 6:1 leverage to purchase assets with a 50% chance of being worthless.   But no worries.  As long as the FDIC has more expertise in evaluating the risk of toxic assets than the entire private equity and banking worlds combined, there is no way they could be taken to the cleaners like this.  What could possibly go wrong?

As I said before, we should levy a 90% marginal tax on speculators who make money off this plan — especially if the Treasury loses money, too!