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Politics : Formerly About Advanced Micro Devices
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To: Taro who wrote (449635)1/22/2009 12:37:52 PM
From: tejek  Read Replies (1) of 1575998
 
There is talk of creating a bank that will buy up [at a discount] all the discredited CDOs and then hold them til the housing market comes back and they have more value.

That idea also popped up in Germany but was instantly dropped.
IMO that could never work, you can't turn all junk into gold. Unless you have a mix to work on, no way.

Remember......some of that junk is actually good.....that is, the CDOs were packaged with good loans as well as bad. And over time, some of that bad may become good as housing values start to improve. The housing market is different in Germany......there isn't as much elasticity. I don't think it would work there but it may work here.
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