This is just another attempt to "leverage up" the government money being put in to arrest the crisis. The problem is, why should it take leverage to buy these assets and recover them? Should the government be leveraging up hedge funds and private equity? Further, I bet a lot of hedge funds would rather just let the asset values fall further, so they can buy outright, and not owe the Treasury or Fed anything and compete with a larger number of marginal funds at higher asset values.

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