If we were restricting the government to buying real assets, I might be inclined to go along. From what I've read, current mortgage values nation wide come in around 11 trillion dollars. A little over 1% are currently in default, they figure that up to 2% might be in default by the end of this year. If things go poorly, perhaps up to 3% could be in default next year (which would be a record high as I understand). 3% though would be 330 Billion. A hell of a lot of money, but not even half what Paulson is asking for. And that would be enough to buy out every defaulted or likely to be defaulted mortgage in the country.
Obviously Paulson has a mind to buy other securities as well. I can only presume things like credit default swaps, derivatives, etc. Those don't have real assets behind them. Thats fine for a private company that can risk and fail, but for a government entity, I'd like the purchase of actual assets. If we can get a good price on real assets and help prop up private home ownership and stablize the economy, great. Otherwise, I'm not interested. And I have less than 0 desire to subsidize the bad debt of companies that engaged in idle speculation on derivatives. Judah On Thu, Sep 25, 2008 at 7:07 PM, Robert Munn <[EMAIL PROTECTED]> wrote: > Yeah, I'm not convinced about that part of the plan. Here is a good > analysis > of the problem: > > > http://www.washingtonpost.com/wp-dyn/content/article/2008/09/25/AR2008092503070.html > > I like the idea of buying assets at fire sale prices and then forcing the > banks to limit dividends to preserve capital. > > Essentially, I am OK with this plan if it works like it would in a private > deal: I get your assets at the lowest price I can, that's it. As for the > banks capital problems- screw them, they created this mess, let them eat > it. > > > On Thu, Sep 25, 2008 at 4:52 PM, Dana wrote: > > > yeah except they are not going to pay market value for the assets. > > They are going to pay more, on purpose. It is to weep :) > > > > Seriously. Check it out. > > > > > ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Adobe® ColdFusion® 8 software 8 is the most important and dramatic release to date Get the Free Trial http://ad.doubleclick.net/clk;207172674;29440083;f Archive: http://www.houseoffusion.com/groups/cf-community/message.cfm/messageid:270945 Subscription: http://www.houseoffusion.com/groups/cf-community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=11502.10531.5
