This subject is just so complicated it’s hard to get your arms around it. There are the bad loans made by mortgage brokers, but then mortgage backed bonds were sold based on those, and an insurer such as AIG gets socked, etc.
Just “devil’s advocate” a bit, I heard somebody say that the gov’t might make money on the deal. Because after the gov’t buys these bad mortgage loans, they will auction them off. And then the market may give the gov’t a profit. This person who said that was saying that the tight cash flow was behind last week’s meltdown, and that at the prices the gov’t is getting these loans, there is a chance of profit. Just saying.........
Where is the gov’t getting $700 billion though? We know they don’t just have $700 billion in a bank account somewhere, just waiting for Paulson to wire somebody the money.
Do you want to give taxpayer money to banks that took unnecessary risks, committed fraud and debtors who took loans they knew they couldn't pay and lied on their applications? What happened to Law and Order?
Good point...I’m wondering if the Treasury will issue Treasury Bonds or Treasury Notes...Treasury will swap the Notes to each lending organization that thy are buying the mortgages from...
As for making a profit from selling the foreclosed homes, that’s kind of far fetched...it sounds nice, but won’t work in practice..There may be some writeoff...The mortgages that still are being paid will help and most likely the Govt will do everything it can to get the mortgages refinances to 30 year fixed rate loans...it will be a long term workout and eventually the banks may buy back some of the performing mortgages...
World bank, where else? That's what it's there for.
and when we get reallybroke, we can just ask the world bank to forgive our debt. After all, how many turd world countries have we allowed to have their debts forgiven over the years?
Hundreds of billions of dollars have “vanished” into the thin are around the world bank before. That’s what it’s there fore.
If we played this game of “bankers” properly, the world and everyone in it always goes broke, and the bank always ends up with all the money.
Look over your shoulder, dude, because you looked behind the curtain, and that's not allowed.
The government can't earn or "create" money.
The taxpayer will pay either through massive inflation and simultaneous devaluation (if the government just prints the money), or if the government allows nature to take its course, the amount that the same taxpayers will lose if all those businesses are allowed to fail will make the alternative make a lot of sense --- but way too late.
We live in interesting times.
A real-life lose-lose proposition.
Unless, of course, we can get restitution from the real villains. The brokers, the insiders, the CEOs. To account for several trillion dollars, there must be a whole lot of them.
Where is the money? In assets? Swiss banks? Offshore accounts? They can't make money disappear any more than the government can just print it.
Who exactly are the stockholders in all the businesses that we will allow to fail?
Has the question even been asked?
It seems for the government to profit from the mortgages they would have to sell houses for more than the people paid for them, plus the costs of selling them. Since many of these houses sold at prices way over the market (due to overabundance of buyers who had access to easy money) and since there will now be fewer buyers, with loans tighter, I don’t see how this works. Must be missing something here.