Junkdrawer
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Tue Sep-23-08 11:48 AM
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| Why would ANY BANK bid low in a "reverse auction".... |
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What is the motive? If they "win", what do they "win" if everyone then gets that price?
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| MercutioATC
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Tue Sep-23-08 11:51 AM
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| 1. If the funds are limited, the banks would be competing for bailout money. |
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If one bids 20 cents on the dollar and another bids 25 cents, the 20-cent bidder will get the bailout and the 25-cent bidder would go under.
That's the theory behind it, anyway.
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| Junkdrawer
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Tue Sep-23-08 11:54 AM
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| 2. I heard the the reverse auction was simply to set the price.... |
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Once the price for a particular instrument was set, Paulson gives everyone he wants to the same price.
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| MercutioATC
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Tue Sep-23-08 12:01 PM
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| 3. Hmmm...that's not how I interpreted it, but I could be wrong. |
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If is DOES work your way, you're right. There'd be no incentive to bid low.
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DU
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Fri Apr 19th 2024, 08:56 PM
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