So, in the end, it turns out that the FDIC trust fund will not be raided in order to bail out banks by buying overpriced legacy loans. The FDIC retained control, and has no inclination to blow its trust fund, that is, it refused to make no recourse loans to make it possible to buy pools of mortgages at prices banks are willing to accept (that is at the make believe value that the mortgages currently have on the banks books).
I threatened to type this, and give myself no choice.
Many very smart* people assumed that the 85% financing by no recourse loans meant the FDIC had to write and give away a hugely valuable Geithner put. I thought so too until sammy snarked me into actually reading the plan as announced.
* Please excuse Dr Black’s extensive use of technical jargon such as “shit” and “shitpile.”