Details to be discussed later.
Yeah, they just sent me a bill for $700B. This is not going to work.
uh, so what? [scratches side and head]
The alternative is better? A multiple year depression of 10-30% unemployment?
Taxpayers aren’t throwing away 700B down the drain; they even have an opportunity to yield 7% - 8% according to Bill Gross. On the side note, I don't think we need more on the demand side of the equation (by buying more of the distressed debt) but the solution should be coming from capitalizing institutions that are suffering from CDOs/CDSs exposures (supply side). Read George Soros’s recent FT article: http://www.ft.com/cms/s/0/9973c5b0-8a6d-11dd-a76a-0000779fd18c.html
shodz Wrote: ------------------------------------------------------- > The alternative is better? A multiple year > depression of 10-30% unemployment? Get a grip man and think about it a little. Are you learning your finance from Sarah Palin or something?
“The alternative is better? A multiple year depression of 10-30% unemployment?” It’s going to happen either way.
Joey I’m going to have to respectfully disagree with you on this one. I know you are very intelligent but I think you’re just plain wrong on this one. Hopefully this will help put a floor on prices and at least we’ll get the money back, hopefully at a profit. If we don’t do this liquidity is going to dry up, say good bye to credit cards, car loans, home loans, business loans, etc…we will have a Depression. I would much rather strive for a recession than to give up and accept a Depression.
I’m just curious what happens with all this profit the US is supposedly going to make on this deal? Maybe we’ll all get stimulus checks. They certainly wont use it to pay down the national debt.
What are they going to base their purchase price on? marked-to-market price is acceptable deal for taxpayers … but hold-to-maturity is absolute rip off. If the decease was paralyzing, the cure is fatal.
They will pay most likely MTM prices/market prices which should set a floor and possibly increase the prices as more are purchased.
MTM prices are going to bankrupt thousands of financial institutions. With or without the bailout it is fait accompli.
bigwilly Wrote: ------------------------------------------------------- > They will pay ***most likely*** MTM prices/market prices > which should set a floor and possibly increase the > prices as more are purchased. Isn’t this the very first thing they should decide before debating on anything else?? If I were a taxpayer, instead of putting a cap on executive compensation, I would like to enforce a cap on the price they pay above MTM.
Gremlin is right, paying MTM prices would be as bad as doing nothing basically dont know what the answer is, but dont think thats it
Contrary to what Bernake said yesterday, I’d say the settle somewhere between MTM and HTM prices.
The idea is that buying these will drive up the prices. Not sure if this will work or not – Paulson said it “had to” which isn’t really reassuring.
McCain just lost my vote… Everyone who voted for this bailout I will work till the last one is voted out of office.
Ptrainer did he ever have your vote? He still has my vote. I beleive Obama voted too so let me guess you’re now going for Ron Paul?
As gremlin pointed out, the plan doesn’t work you pay market prices because this will render may institutions insolvent. There’s plenty of private money sitting on the sidelines waiting to buy this stuff at $.15, but no one will sell. So the plan only works if they pay .40, .50 or more, which is why the plan is a terrible idea.
IMO, they should start below MTM and then go above MTM. But they must stop significantly below HTM. You absolutely can not buy near HTM - we’re talking abt only toxic assets here. Why somebody will sell below MTM? Out of distress and he knows if he goes to the market, market prices will fall further. So he still gets a decent deal selling at a guaranteed price below MTM to gov’t. If this happens it’s an apt punishment for poor management and some kind of a deal for taxpayers too. If not, gov’t is just grossly bailing out financial mismanagement and overt greed using taxpayers’ money.