Probably need to ban sellers from being buyers of ANY of the "assets."
Otherwise I can envision JPM swapping securities with C for example.

I'm waiting for the Goldman press release giving their opinion on this plan. If they are thunderous in their applause we know the game is rigged.

Thanks for the insightful Saturday Ticker. Will the rules be published on a .gov website? WSJ? Also needed to show off my brand new avatar.

so its rally time then???

Yeah, rally time....to da moon !!!!

Whoops!! Wrong thread.

Wow a Zork reference... now that's old school

This requires the economy to grow into the tens of trillions of debt on the banks books through organic production.

KD, you gave up on the idea or cramming down the debt?

@Immoral_hazard - no if clause needed; the game is rigged.

Yep. Private capital come and play
but Pres. Obama gonna cap your pay

I am not holding my breath on this one. Everything done to date tells me that they are not interested in doing what is right, moral hazard is a virtue to these guys. BAC will be able to buy up its own bad loans for the express purpose of screwing the taxpayer.

Lemon, the two are disjoint things (cramdowns .vs. a program like this)

Here's a question...

as an investor... how specific can you be about what "toxic" assets you want...

is this like buying a unclaimed suitcase at the airport...

or is this something where research can be done and the early bird gets the worm so to speak...

i.e... I only want loans from recovering areas like DC, San Fran, Seattle.. etc.

This means we rally till September, right?

[/sarcasm]

How does this work?
Unless the private/public funds overpay for the assets, the sellers will get killed... wiped out. Most of your sellers are natural participants and are already in the market.

Not for Nothing, but all these plans seem like circle jerks of Paulson's original plan back in September. If the government is going to take up to a 97% stake, they might as well go all the way and buy these things outright. In the end the taxpayer is going to end up flipping the bill anyway via higher taxes and/or inflation. I think the Treasury is intent on ruining the free markets because they just keep changing plans like underwear. Like KD said a while back, stick with a plan, shut up,and give it time to work. I personally feel they should've done nothing all along. It just seems with every turn there is some hidden agenda with these guys. Like a bad used car salesman trying to exploit different angles.

This plan is a piece of crap and I don't know why KD is saying that the plan by itself is not necessarily bad. The PRIME issue for all these plans including the Super-SIV and the original TARP is how these assets are going to be priced. So how are these assets going to be priced? If for example, cash flows for residential MBS are to be discounted w/ an assumption calling for AT LEAST a return to equilibrium in the house-price-to-income ratio (which the bright analytical minds out to demand), many of these securities will fetch a price where the seller will go belly-up as the assumptions behind the Level 3 marks are way too rosy otherwise the assets wouldn't be transferred from lower levels to Level 3. My verdict: HOUSTON WE STILL HAVE A PROBLEM.

Mrnome,

The idea is to create a bid for these assets at least in part coming from private capital and not just the government...

once some private money gets flowing into this space, maybe then some that aren't worth zero... maybe will have a bid.... even if that bid is 30 cents on the dollar... it's better than no market and zero.

One other thing. I think fundementally this does nothing or little for the economy in general. We DON'T PRODUCE ANYTHING !! Our wealth over the last dozen years or so was paper wealth. All we did was create paper and exotic derivatives off of paper, underwrite, package it and sell it/ trade it. The only productive thing we did was build houses, but for what ? So a family of four making 50k/yr could live beyond thier means in a 4000 sq ft McMansion ? So then some welfare Mom could move in to thier old house.
Anyway, the Fed along with the Treasury is trying to cram more debt and/or credit down our throats. Isn't that what got us here in the first place ?!? They're pushing on a string big time !!!
Like Karl said a while back, fixing the banking mess is easy. Let the zombies die so the healthy can survive and thrive. That's how capitalism has always worked. These intrigate schemes being proposed and written into law are nothing more than allowing speculative risks to be socialized while the gains from these endeavors are privatized for the elite few (think Paulson). That, and all the good ole boys being spared 100 yr prsion sentences.

anybody still think my idea of giving everyone 40 thousand to pay down their mortgage still sounds so stupid. Better than this ****. You are gonna get gamed here. No doubt.

Quote:

Mrnome,

The idea is to create a bid for these assets at least in part coming from private capital and not just the government...

once some private money gets flowing into this space, maybe then some that aren't worth zero... maybe will have a bid.... even if that bid is 30 cents on the dollar... it's better than no market and zero.

CJ - Yes, I understand that; however, how are you going to come up with the bid? Using the residential MBS example again, if the cash flow monte carlo model uses an 80% probability that housing prices are going to revert back to 3x income than many of these assets are worth 60 cents on the dollar. Do these banks have these assets marked at 60 cents on the dollar on Level 3? Highly doubtful.

Looks like a perfect conduit to wash dirty off-shore money clean tax free at a cost of only 3%.

Without full Source of Funds disclosure let the illegal weapons trade, human trafficing, and drug dealing roll on and on.

Well, the only save left after this is outright printing money: .gov has given up every orifice to the bankster rapists.

PJ O'Rourke once wrote that if the government is paying you to something you otherwise wouldn't do on your own, it's probably paying you to do something stupid.


I just know that the taxpayer is going to get reamed in the end once again on this one while the guys who'll game it will walk away with all the money.