Bloomberg: "Bernanke Urges Against U.S. Buying Assets at `Fire-Sale' Prices"

[jordi_fanclub]

Source: Bloomberg

Sept. 23 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said the Treasury Department should buy illiquid assets at ``hold-to-maturity'' values under its $700 billion rescue plan instead of at discounted ``fire-sale'' prices.

The comments by the Fed chairman came in the form of an unusual break from his prepared testimony before the Senate Banking Committee today and are likely to feed the debate about what price the government should pay banks for bad mortgage- related loans.

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aEyg9syOgmjE&refer=home

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WTF?... Pay MORE than the REAL value?! This is INSANE!!!

[Raven]

1. You have got to be kidding! On one in their right mind would do

what he's suggesting.

[Dr.Phool]

6. This is Congress you're talking about.

Right minds is an oxymoran there.

[The Backlash Cometh]

2. Anybody remember that last real estate mess?

What was it called, RDV? I suspect a huge problem with deceitful rezonings had something to do with it. Was anyone paying attention when they were selling property like hotcakes?

[depakid]

4. It was called the Resolution Trust Corporation

and it wouldn't have been necessary if Congress hadn't abandoned traditional Democratic values by passing a law called Garn St. Germain.

http://en.wikipedia.org/wiki/Garn_-_St_Germain_Depository_Institutions_Act

[Blue State Bandit]

3. Trust us!

We're protecting taxpayers.

[Cronopio]

5. Bernanke to the U.S. Government: "Because we're in a crisis, you have to play the schmuck."

Or Lucy to Charlie Brown: "Even though you know I'm going to pull this football away, you still have to try to kick it."

I swear, the only thing worse than dishonest swindlers are *lazy and uncreative* dishonest swindlers.

If all they can do is try to game and exploit a helping hand, let them starve for one.

[Xipe Totec]

7. Free market, baby, let the forces work their magic!

:rofl:

[debbierlus]

8. Fuck. No Fucking Way.

[JerseygirlCT]

9. That's so much rotten spam.

Honestly. Will help WHO?

It's bad enough not the GOP's deregulation fetish, combined with outsized greed and a widespread gambling problem will now put all of us in debt for a long, long time.

[damntexdem]

10. Given that the economy is on fire, fire-sale prices are the only correct ones.

Nor should the assets be sold off by the government at discounted prices -- the taxpayers deserve to see the government get the best prices possible for what the taxpayers will have bought at the fire sale.

[CharmCity]

11. But here's the thing...

Is there a houses for sale in your neighborhood?
It may be in foreclosure.
Would you like it if it was sold in "fire-sale" price?
Let's say it is. Let's say all three in your neighborhood is sold on pennies on the dollar. How would that affect the value of your home? Of your neighborhood? Of your town?
As property values fall dramatically, there is a demand to reduce property taxes. There goes the state budget.
Mortgages are worth plenty... 90% of homebuyers ARE paying on time. The mortgages are bundled together and sold to banks. The banks then sell them and get cash. Right now, no banks or investors are willing to buy these mortgages because of those 10%. Hence the "credit crunch." That cash is used for most businesses to operate, to invest, and to grow. And pay employees.
Treasury doesn't seem to know whether or how to pluck the 10% out and pretty much admits that.
But that can be sorted out. But it doesn't make business sense to sell real (albeit illiquid) assets -- as many as one out of ten homes -- for far less than they're worth. It will create a very painful downward spiral.

[Mojorabbit]

13. I think the banks should keep

the mortgages they made. there is no reason they should be bundled and/or sliced and diced into esoteric financial packages to be sold. If the banks are on the hook for the mortgages they sell, they will be careful who they loan to.

[mhatrw]

12. Great idea!

Give away the store!