I will return to this subject later, when I have more time, but the issue of overpaying on bank assets under the Geithner plan is much more complex than meets the eye ... ah, so many wrinkles! I'm now wavering on how much overpayment we may see -- it may be considerable after all. See this blog entry (very wonky) for a scenario that's actually real world (unlike the misleading simple models that were floating around, like Krugman's), though it contains assumptions that may turn out not to be true. Also I think there's a "cost of money" element that could cause bids to come in higher that no one is modelling yet (everyone's looking at the risk angle).
So are banks still secretly terrified of the Geithner plan (preceding entry)? I still think probably yes, but I'm going to return to that subject sometime later. First I want to do a blog entry on the private investor advantage of "free money" and how that may skew the offered prices.