Posted on 09/24/2008 1:20:05 AM PDT by Chet 99
Honestly. A clean bill as requested by Treasury man Henry Paulson, along with John McCain's oversight board, can help fix the credit-crunch problem. It needn't be this hard.
According to the Paulson plan, distressed assets will be sold by banks through a reverse auction (the low bid wins) to various investment funds, hedgies, private-equity boys, and other banks. And taxpayers will have a strong ownership position in these asset sales. When the assets are worked out over time -- as they will be once housing and the economy recover -- taxpayers will actually make money on the deal.
This is similar to the RTC story twenty years ago, when Bill Seidman presided over similar asset sales from bankrupt S&Ls and wound up making money for Uncle Sam and his taxpayers. A long prosperity wave followed.
In fact, industry insiders tell me the Federal Reserve and the SEC may be moving toward a five-to-seven year amortization plan for the scoring of bank losses from the sale of this distressed paper. This is very constructive. Fed head Ben Bernanke also is talking about getting rid of mark-to-market accounting and moving towards "hold to maturity." This is good.
(Excerpt) Read more at realclearpolitics.com ...
I want to believe Kudlow but someone please tell me why I pay my credit cards off each month?.....we don't have car payments..(we drive our cars for a long time) and I manage to pay money for the HELOC each month?.....if I had known, I would have just ignored all my bills....
When the assets are worked out over time — as they will be once housing and the economy recover — taxpayers will actually make money on the deal.
surrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrre
I pretty much stopped reading right there. First off, the valuation of the assets would be "interesting" to figure out.
Secondly, this would directly affect the bonds that use these assets as backing, triggering all associated Credit Default Swaps and making a general mess of things all over the world.
This is a matter of survival...
The Feds have dumped HUNDREDS OF BILLIONS OF DOLLARS, and there is still no liquidity.
It's the other way around. Paulson will make it far worse by doing what he's doing.
The credit markets are essential....but so is criminal investigations into congress.
the money is stale. creating more money won’t help.
I'm sorry. Having a limited number of board members who control 51% of the stock giving themselves golden parachutes regardless of performance is NOT in the interest of shareholders. In is inexcuseable to see people running these companies into the ground, either intentionally or unintentionally, and walking away with $50, $75, $100 million or more. Like everyone else who has to work for a living, benefits should be tied to performance. Even capitalist companies overseas cannot believe the enormous salaries and benefits the US execs counterparts receive.
Salaries and bonuses are no business of the government EXCEPT when the shareholders see the company's primary assets sold off to pad the books and billions of dollars of shareholder's money is distributed to a few individuals. Capitalism is based upon risk taking with YOUR OWN MONEY among others. If a person knows they are going to receive $100M for just walking out the door, where's the personal risk? This is not capitalism. This is income redistribution at the highest level.
HarleyD..I love ya’!
Thank you for your post!
Speaking as one who is recovering from the longest takeover attempt in history.
You can't board the Titanic to save it. Nothing is "too big to fail".
I want DODD, Barney FRANK, Franklin Raines, Jamie Gorelick, Jim Johnson, et al FROG MARCHED into PRISON! a Freeper’s saying......FIRST JAIL....THEN BAIL.
I have a lot of faith in what Larry Kudlow says......HOWEVER, this stuff really is OVER MY PAY GRADE!
“taxpayers will actually make money on the deal”
I never agreed to go into that kind of business. The government has no business there, not with my money.
Only if Barney Fwank goes to a women's prison. Sending him to a men's prison would be like sending him to Fantasy Island.
Paulson is a creature of this high Financial/Criminal world, why should we trust him. IMHO, Paulson has one tool, a hammer and thus he sees all problems as a nail to be hammered. I want some other independent viewpoints to be considered not just the HAMMER.
[Secondly, this would directly affect the bonds that use these assets as backing, triggering all associated Credit Default Swaps and making a general mess of things all over the world. ]
Thanks. That puts substance to my gut feeling that there is no free lunch.
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