OK, here's how it works: The Geithner plan apparently
makes no sense. In particular, the question of who
exactly is going to put up even 5% towards the
"toxic waste" which the banks hold remains unanswered.
This guy has the answer. It's brilliant:
http://www.youtube.com/watch?v=n-arbfLTCtI&feature=player_embedded
Is it correct?
Looks that way to me.
Is it good or bad for the economy?
I'd say it's very bad, because this sort of thing will just
kick the can down the road with regard to actually having
an honest market for these "assets". I have often said that
the CDOs backed by first mortgages are worth 80-90% of
face value, and that CDOs backed by second mortgages are
worth, on the average, maybe 40-50% of face value, but there
is no way we will ever know as long as the banks are allowed
to play "make believe" with special-purpose entities.
-dave chapman
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment