"In the dark of night over the weekend when most people were snoozing, the Treasury dramatically expanded its bailout plan to include buying student loans, car loans, credit card debt and any other "troubled" assets held by banks...Treasury Secretary Henry M. Paulson Jr. stressed that the additions were needed to ensure that student loans and credit cards - which have become indispensable to the spending habits and career plans of many Americans - do not become victims of the widening credit crunch.
Student loans, which Wall Street firms packaged and sold to investors just like mortgages, already were hit hard in the widening credit crisis earlier this year, with much of the private loan market disappearing. That forced the government to step in and beef up its direct loan programs for college students.
Many financial analysts feared that the credit card market would be the next domino to fall. Credit card debt also is packaged and sold to investors in complicated "derivative" securities that have become difficult or impossible to sell in recent months...
Richard Berner, chief economist at Morgan Stanley, one of the investment banks that stands to benefit from the loan buyback plan, said the program will help ease frozen loan markets and ensure consumers continue to have access to credit..."
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