rh13

The Hedge Fund of America, LP

Mihalick is right if the price paid for the assets holds. If the government buys mortgage backed securities and collects a couple of interest payments and the value of the assets holds up, the government profits.
The piece of the puzzle I have not heard is this: how is the government going to assure the stuff they are buying is worth what they are paying for it? If that can be assured, there's no problem with the deal, financially. It still does not assure that it will have the desired effect of restarting the private capital markets. I also don't see any reason to think the capital markets won't restart by themselves. In order for buying and selling to take place, there needs to be a way for buyers to assure themselves they are getting what they are paying for. That's the same problem the government faces.