Not necessarily signing up to Julio's entire plan, but if the Treasury were to step in and pay the mortgages of all subprime borrowers, then the bonds would be money-good for the next ten years, and the resultant mark-ups (which would be roughly the size of the markdowns already taken) would go through the P&L account into shareholders' funds and that would recapitalise the banks (except to the extent to which they had sold down the portfolio, which is quite substantial in some cases, in which case it would be a windfall gain to the hedge fund industry).
dd > ----- Original Message ----- > From: "Doug Henwood" <[EMAIL PROTECTED]> > To: "Progressive Economics" <[email protected]> > Subject: Re: [Pen-l] My rescue plan > Date: Tue, 23 Sep 2008 14:27:46 -0400 > > > Julio, the banks are largely out of capital. How do you recapitalize them? > That's the point of this bailout. > > Doug > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
