That would have still left about 14 million empty housing units on the market. The major cause of this whole mess was the changes in the law made by the republicans and the midnight credit default swaps. Total world derivatives are around 550 to 660 trillion.
The treasurer could have bought all the defaulted mortgages for about 10% of the tarp. But then the government would not have been able to say we are helping the people.
They are hiding behind mortgages for a rich banker wall street bailout.
On Obama & Pelosi’s Ipod.
Believe in all the good things
That money just can’t buy
Then you won’t get no belly ache
From eatin’ humble pie
I believe in rags to riches
Your inheritence won’t last
So take your Grey Poupon my friend
And shove it up your a$$!
[Chorus]
Eat the Rich: there’s only one thing they’re good for
Eat the Rich: take one bite now - come back for more
Eat the Rich: don’t stop me now I’m goin’ crazy
Eat the Rich: that’s my idea of a good time baby
Aerosmith.
Re: 14 million empty houses
I was trying to keep my post relatively short.
Once the US Treasury acquires a bad mortgage, they should instantly sell it to the highest bidder.
At most, 10 million homes would foreclose at an average loss of $150,000, which is about a 40% price decline.
The market would clear instantly.
There might be millions of empty homes, but only because of massive overbuilding.
And, every empty home would be owned by a speculator who is actively searching for a long term buyer.
In exchange for taking on the bad loans, the US Treasury would demand to step in front of all stock and bond holders of the companies that now own these toxic mortgages.
The US Treasury would then instantly sell its (probably 100%) interest in AIG, Fannie, Freddie, Citi, etc. to the highest bidder.
Within 24 hours, each of these companies would be operating as usual, with new owners.
The original stock and bond holders would be wiped out, but the “new” companies would have perfect balance sheets.
Obviously, new regulations and transparency would be required for the “new” companies, but that's an essay for another time.