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Politics : Formerly About Advanced Micro Devices
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To: SilentZ who wrote (422078)10/3/2008 2:02:17 PM
From: tejek  Read Replies (1) of 1575877
 
There are no guarantees but its very likely that most of that 700 billion will be recouped when the toxic properties are sold off after the loans have been renegotiated.

What's "most?" What's to say they're not going for pennies on the dollar? How are they going to sell for a solid price in the current environment?

That's the good thing about this plan.......you don't have to sell them in the current environment. You renegotatiate the loans so that the people can stay in their homes and keep making their monthly mortgage payments. The more you can keep in their homes, the less foreclosures we'll have. The less foreclosures means less housing inventory for sale. Less inventory will lead to price stability. Price stability will lead to increased sales. Increased sales will lead to higher prices. That's when you sell the loans for a small profit along with the profit you accrued from the small interest payments made each month. In that way, the $700 billion gets repaid in part or in full.

>>and I want to see these "too big to fail" firms dismantled carefully.

>I am not sure what you mean by that statement.

We can't have firms the size of AIG that we have to bail out because they're "too big to fail." We need to carefully de-merge firms like that (as well as our huge banks) while they're doing OK. Obviously, that'll take away opportunities for execs to make nine-figure salaries, but so what? We'll all be safer.

AIG was a problem because they were not forthcoming as to the quality and location of their assets and the problems they were incurring. Size is not the problem.....transparency is.
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