Business Week reports that hedge funds and investment banks are scouring the proposed PPIP for ways to "exploit" the partnership and auctions. One expert tells the magazine the system is highly "gameable." The basic problem is that "everyone gets to play. Banks selling dubious assets can finance their sale to the partnerships, investors can buy debt from banks in which they own shares, and on and on. Strictly speaking, there's nothing wrong with much of this. But many of the strategies to exploit the partnerships increase the chance that the feds will overpay for the debt, sticking taxpayers with the bill." 

Some have voiced nervousness about TARP banks buying up debt from each other, with public assistance. Some banks intend to finance the sale of their own securities. If they help set up and invest in the partnership to buy the debt, well, you see the issue. 

For more:
- here's the Business Week article

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