See that last part is my issue. I sincerely doubt the government is going to buy the assets at marked-down book values. And if they do, it's probably only because those "marked-down book values" are too high as it is. I can't see financial institutions rushing to sell the assets that they believe to be undervalued while keeping ones they believe to be overvalued. They're going to do what's in their own best interests.
The alternate proposals in the blogosphere about buying equity in the institutions at low prices in order to re-liquify them makes a whole lot more sense to me. Dilute the shareholders and give the taxpayers a realistic probability of seeing a reward on this investment. Simply buying distressed assets that financial institutions chose to sell does not sound like a great plan to me.
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See that last part is my issue. I sincerely doubt the government is going to buy the assets at marked-down book values. And if they do, it's probably only because those "marked-down book values" are too high as it is. I can't see financial institutions rushing to sell the assets that they believe to be undervalued while keeping ones they believe to be overvalued. They're going to do what's in their own best interests.
Sep 25 08:21 am
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All Comments by H.J. Huneycutt »Bush's Speech: Surprisingly Coherent [View article]
The alternate proposals in the blogosphere about buying equity in the institutions at low prices in order to re-liquify them makes a whole lot more sense to me. Dilute the shareholders and give the taxpayers a realistic probability of seeing a reward on this investment. Simply buying distressed assets that financial institutions chose to sell does not sound like a great plan to me.