here are the reasons why neither of them won't help the economy
toxic assets plan or the daylight-robbery-of-taxpayers plan won't work. currently the junk assets are going for 30 cents on dollar. if the bankers are able to get 70 cents still those 40 cents are inflated no matter who is paying for that (in this case the tax payers). even after the bad assets are cleaned from the balance sheet they wont resume lending like they did during the boom years.
if m2m is suspended there will be more suspicion about the bad assets and the balance sheets of banks and it wouldn't be a surprise if citi or boa go belly up (not bankruptcy exactly but govt take over with common and preferred wiped out).
You're right, but considering that Obama has so much power, I'm sure Geithner, Obama's right hand man, will get his way.
Geithner was very firm today on Meet The Press about saving taxpayers money. It's his way or the highway.
No M2M suspension, in my opinion.
You just said the key thing I think.
The banks won't lend to those who don't qualify or barely qualify anymore, they don't want to create another pool of bad assets. Today.
If you buy a house, make enough down payment and have enough income, the banks will compete to lend to you. They still lend, but they won't lend to Mr joe who doesn't have a job.
Buying toxic assets from the bank won't solve any problem. it will only make the banks look better with a huge burden on the tax payers. I wonder why gold isn't 10000$/z and oil isn't 500$/b when gov spends another 2 trillions to try to solve this mess.
Those offered prices will most likely be lower than the model prices based on cash flow. PPIP investors are looking to loot. As such the banks wouldn't want to sell.
If the offered prices are higher than the mark to market prices, again the banks wouldn't want to sell. They have already taken the write-downs.
That's why the top poster is right. M2M and the PPIP can't coexist.