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Care to explain this Geithner put in less financial-gibberish terms (than those websites listing it) instead of calling people names?


I didn't call names, but I'd be happy to elucidate. Krugman's article (the first hit) seems to explain it pretty clearly, but I'll do what I can.

A Geithner Put essentially means the banks could take enormous risk because they, simply put, bought a put option the government (with Geithner as analogical proxy) wrote on their bets going south. That is to say, the downside of taking a huge risk was covered by taxpayers with the bailout (= exercise price of a put), and the upside (that compelled the banks to take such risks) was even more appealing with limited losses the put option ensured.

It's kind of a tongue-in-cheek way of saying that the banks were insured against collapse via TARP.


Thanks for the clarification. No offense taken. I hadn't heard that term before.




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