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- 6 Emergency Measures to Prevent a Banking Meltdown [view article]
- ETF Update: Nervous ETN Investors, September ETF Performance [view article]
- Curing the Credit Crisis: A Better Alternative Plan [view article]
- Money Market Funds: 'Chutzpah Banking' [view article]
- Commercial Real Estate Loans May Be Next Shoe to Drop [view article]
- Financials Have Bottomed? Readers Say We're Nuts [view article]
- Bank Stocks at 52-Week Highs [view article]
- Lack of Integrity: 10th Bank Failure of 2008 on Poor Risk Management [view article]
- Weekly Street Sentiment: From Bad to Worse [view article]
- Selling Short America and the Rest of the World [view article]
- More on the Fannie/Freddie Heist [view article]
- Financials in Turmoil? Someone Forgot to Tell These Eleven Pennsylvania Banks [view article]
loading ...Recent KRE Articles
- Banks Will Need $675 Million Infusion for Modest Growth
- 6 Emergency Measures to Prevent a Banking Meltdown
- ETF Update: Nervous ETN Investors, September ETF Performance
- Curing the Credit Crisis: A Better Alternative Plan
- Money Market Funds: 'Chutzpah Banking'
- Commercial Real Estate Loans May Be Next Shoe to Drop
- Bank Stocks at 52-Week Highs
- Weekly Street Sentiment: From Bad to Worse
- Financials in Turmoil? Someone Forgot to Tell These Eleven Pennsylvania Banks
- Selling Short America and the Rest of the World
- Full List of Articles »
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Curing the Credit Crisis: A Better Alternative Plan [view article]
Invest On Fundamentals,I disagree. It is clear from what Bernanke said, that the Treasury intends to pay very near full price, if not full price. You ought to do some research yourself.
The Federal Reserve has already been paying very close to full price, with respect to very similar mortgage backed securities that Mr. Bernanke has polluted its balance sheet with. They take a very small "haircut" to the par value, but it is insignificant compared to the nature of what they have accepted in exchange for good collateral in the form of Treasury bills.
We must not rush out and do the first thing that comes into the minds of Paulson & Bernanke. They have both already been proven to be wrong, time and time again. There is no reason to believe they are correct, now. They had 1 year and 2 months to come up with a well planned vision of what to do, and to bring it to Congress. Why, then, the rush?
The problem is that they had no vision, then, and they have no vision, now. Their "plan" is is just plain wrong headed. Far more permanent damage will be done by rushing into throwing away $700 billion, than can possibly be done by debating the issues adequately. Reply
Curing the Credit Crisis: A Better Alternative Plan [view article]
Bulls eye! Now can we get the Government to understand the basic principles of Capitalism?Let the smart banks buy the bad mortgages at 20 cents on the dollar and negotiate with the homeowners to reduce their mortgage to 30 cents on the dollar. If we buy bad mortgages at face value we will continue to have foreclosures and fat bankers. Reply
Curing the Credit Crisis: A Better Alternative Plan [view article]
I agree with dbjn. We have yet to decide who is going to pay for all those subprime walk aways. I'll give you a hint. We don't have debtor's prison any more. I'm sure it was worth it (sarcasm) for Dodd et al to win re-election with their votes. ReplyCitizens
Curing the Credit Crisis: A Better Alternative Plan [view article]
You have it 100% Right Paulson is a CROOK ! After He leaves In Jan I bet he goes back To GoldMan and Gets $50 Million a year "job" This plan is BS they just want to unload BAD Stuff on the FED Goverment !These people are liars and theives !! But they look nice in there $3,000
siutes ! Reply
Fundamentals
Curing the Credit Crisis: A Better Alternative Plan [view article]
Avery Goodman's article is at best misleading, and at worst a complete debauchery of the Paulson's intent and testimony coupled with a political smear agenda. Give me a break!Look at the quote that Goodman himself points us to above: "In subsequent questioning, Mr. Bernanke distinguished between, on the one hand, “fire sale prices,” the ones that prevail “when you sell into an illiquid market” and, on the other, the prices that holders think the assets are really worth, sometimes described as “fundamental” values or “hold-to-maturity” value."
Fundamental value is not full price, as the article says--it is what holders think the assets are really worth! Goodman, get a clue, and research before you write. Paulson talked about yield to maturity and fundamental values, which you should understand before you fly off the handle and reveal your total ignorance. Next time, please try fair and accurate reporting??
The Fed and Treasury are not trying to turn the US into a socialist state, so get off your soap box. You don't seem to realize what could happen if this plan doesn't go through--you obviously don't understand that the events of last week were pushing our financial system to a high probability of something looking like a severe recession or another depression. If we don't do something quickly, that is the distinct possibility we face. I'm not willing to take those odds and that kind of worst case scenario, are you?? Get real.
Reply
Curing the Credit Crisis: A Better Alternative Plan [view article]
Concur with tvb's comments most.This author mistakes "par value" with Bernake's reference to "hold-to-maturity pricing”, which will be much less than par value, but perhaps above the fire-sale price. Deposit protection is clearly not the core issue in this crisis, although the FDIC may have the answer to solving some issues. We don't have a depositor mess, we have a capital markets mess. The author provides more divisive ranting than real solutions in this article.
Reply
Curing the Credit Crisis: A Better Alternative Plan [view article]
The first link in the article has been very helpful!Rather likely it is true because when the 700 billion US$ are used to buy the stuff at market value, record losses have to be taken...
To be honest, your plan makes a lot more sense compared to what debt huggers Paulson and Bernanke are doing. Therefore it will not happen (the Americans themselves allowed Wall Street to suck up all this power all these years and their political system is from 5000 BC so it will not happen). Reply
Curing the Credit Crisis: A Better Alternative Plan [view article]
dbjn, I agree that the mismanagement of the American economy has been bipartisan, over 21 years, and not the fault of Republicans alone. That being said, George Bush (not necessary alot of other Republicans -- Senator Bunning and Ron Paul being Republicans also!) has run a crony capitalist administration, with little regard for right and wrong, and high regard for satisfying the greed of those who are his allies. ReplyCuring the Credit Crisis: A Better Alternative Plan [view article]
Jakester, you make a very good point. Limiting bank insurance to the contracted amount of $100,000 might be a better choice. We might use the extra funds to give some type of limited insurance up to $100,000 in money market accounts.You comment illustrates the thoughtfulness of the American people, and their willingness and courage to think for themselves! It also shows the need to take the time to debate even the best intentioned rescue plan, in order to make sure it is workable and wise, rather than ramrodding it through Congress. Reply
Curing the Credit Crisis: A Better Alternative Plan [view article]
To blame the mortgage and credit mess only on the Bush Administration is ridiculous. It was the Democrats who pushed for Fannie and Freddie to make loans so that everyone could own a home even if they did not have the income or desire to pay for the loan. Where was Dodd-D, Chairman of the Banking Committee, where was Frank-D, Chairman of the Ways and Means Committee, and where was Pelosi, leader of the so-called" new transparent Dem-controlled Congress"? Leaders of both parties knew this was happening and they should be held accountable for thinking about themselves instead of doing what was right for the country. ReplyCuring the Credit Crisis: A Better Alternative Plan [view article]
If the problem was just limited to banks this might help. But the problem goes far beyond banks. Also, if FDIC insurance is covered to raise every last dollar, why will depositors flee the banks that are revealed to be shaky? They'll just chase the highest deposit rates. If you want to know which banks are dubious, check their stock price. Indymac had fallen about 98% before it was taken over by the FDIC. ReplyCuring the Credit Crisis: A Better Alternative Plan [view article]
I don't think Bernake is suggesting paying full price, as you imply (read his comments more closely). Rather, I believe he is suggesting paying a price that more closely represents the fundamental long-term value of the securities (which, of course, incorporates folreclosre/default expectations for the loan pools and will likely be well below par -- I believe Gross at Pimco is estimating the Treasury could pay about 65 cens on the dollar and will yield a substantial return on this "bailout" investment. The challenge is determining what is the true fair price as it is by no means a straightforward calculation and is subject to subjective considerations. ReplyCuring the Credit Crisis: A Better Alternative Plan [view article]
"More than anything else, the government must start being honest with the people."I could not agree more! Transparency, transparency, transparency. Reply
Curing the Credit Crisis: A Better Alternative Plan [view article]
"Bailout" is misleading. It makes it sound like the problems will be fixed. The "bailout" is at best a postponment. This mess is going to work through the system sooner or later. We just as well take the medicine now and get on with it. And also, what is a "bailout" for some is a debt for others. ReplyCuring the Credit Crisis: A Better Alternative Plan [view article]
I absolutely agree that a plan based on the FDIC (or a new Resolution Trust Corp.) is superior to the approach advocated by Paulson and Bernanke. Raising the limit on deposit insurance in the future is reasonable, but I believe that current deposits that are above $100K should take at least a small haircut when the government makes good on the insurance. Reply