CeilingCat
Posts: 2363
Joined: Dec. 2007
|
[Graffiti moved to Bathroom Wall. - Lou FCD]
| Quote (midwifetoad @ Mar. 09 2009,17:56) | But none of that answers my question , which is, after the crisis became obvious and painful, why has their been no rush to buy the toxic loans. You are talking about firve or ten percent of all mortgages dragging the world into a depression.
And even the worst mortgages are worth more than zero. |
1: Because us taxpayers don't want to pay gold for crap loans. The banks want the taxpayers to buy their toxic loans at greatly inflated value. We taxpayers would rather the banks took the loss, thank you.
2: The banks are terrified that somebody will buy the loans - at their actual value. If this happens, they have to mark the rest of their loans down to this new, lower value, which means instant bankruptcy, which in turn means a world wide crash that makes 1929 look like boom times.
In short, the banks want the taxpayers to pay grossly inflated prices for their crap loans and the taxpayers aren't that dumb.
I predict that we'll be seeing the dozen or so largest banks nationalized by the end of the month.
I further predict that Ben Stein won't understand.
|
