According to Portfolio, "There are now ample opportunities for distressed-asset investors. . . Prices for such securities are very low, even considering the awful state of the economy. That's because the market for mortgage-backed securities is flooded with sellers, as banks, hedge funds, and other investors in collateralized-debt obligations, or CDOs, head for the exit."
This is a perfect example of a how the market can take care of helping the banks get the bad assets off their balance sheets: Well-capitalized hedge funds, private investors and sovereign wealth funds are ready and able to move in and buy toxic junk at fire-sale prices. There is a market for these "bad assets." The prices aren't as high as the banking clowns would like, but that doesn't mean that we need federal intervention. If they need to sell their garbage, they can call up hedge fund managers like Steve Persky and make him an offer he can't refuse.
There might not be as much money flowing into it as they'd like. But if they keep lowering the prices, the big guns like Warren Buffett might decide to join the party. The notion that toxic crap should be dumped on taxpayers because the banks can't find anyone willing to pay them what they think it's worth is deeply troubling to me.











Reader Comments (Page 1 of 1)
2-26-2009 @ 4:12PM
BHarrison said...
Well, while I can see that initially something had to be done to prevent the total collapse of our national economic infrastructure, we are long past that point, relatively speaking.
Instead of taxpayers having to absorb the "toxic investments" the REGULATED Free Market Economy should resolve these problems. If the prices are lowered enough, someone is going to buy them, versust the banks being subsidized to hold onto them.
These properties are gong to be long term investments . . . heck they had built more condos and homes than they had customers to buy them; and it will take many years for the property values to appreciate for a RoI . . . so these are not short term investments that can be profitably "flipped" in a short period. Also, these properties require manintenance to maintain the value, property taxes, and propertymanagement . . . this is NOT like buying a long term stock investment; there are a lot of "associated costs" that comes with these propertes. (And how many states and municiplaities are looking to raise property taxes to repllace their lost revenues?)
So, let the vultures invest in these properties . . . that is better than subsidzing banks to hold them. It is just another form of the redistribution of wealth via the Free Market Economy.
3-02-2009 @ 10:20PM
info said...
I have a suggestion concerning an economic stimulus. For every person who purchases a new American built automobile, that person should receive a debit card from the United States Treasury in the amount of $8,000.00 and in return that automobile company should remit 2000 shares of it's company stock to the United States Treasury. A person would only be able to utilize this benefit once every three years, to be issued by their social security #. so as to protect this benefit from possible abuse. one person could not go out and buy 10 new car's and then expect to receive $80,000.00 however they would receive $8,000.00 for the first car they bought. And a household with two or more adult's could all benefit from this program. Also the debit card would expire 12 month's from the date of issue, so you would have to spend the money within a year. This money could go toward car payment's, House payment's, Rent, groceries, hospitalization cost's or health insurance, or any other product or service in the United States, or you could donate the money to charity. Let's get America purchasing American made products again. Let's put an American flag on every American made product so we can see when we are buying American. From car's to clothing, even food product's I want to see when I'm buying American. I'd like your input. PLEASE PASS THIS ON.
I would greatly appreciate your feedback regarding my proposal.
David Kreucher
(248) 739-9990
info@lawsuitdelivery.com