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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Giordano Bruno who wrote (192786)3/23/2009 10:14:55 PM
From: James HuttonRead Replies (4) of 306849
 
"If I, as a "financial institution" can participate as a bidder in these auctions I can foist off my loss onto the taxpayer. Here is how I can rig the game so as to avoid an otherwise-inevitable loss:

I become a "bidder" and "bid" on my own assets at 75 cents.
I am providing 5 or 10% of the money. The rest is covered by Treasury, The Fed and the FDIC via guaranteed bond issuance.
The loan, ex my contribution, is non-recourse. That is, I can lose 5 or 10% of the total portfolio purchased, but nothing more."

I THOUGHT I heard Geithner say today that banks wouldn't be able to bid on their own loans, but even if true, there are probably lots of easy ways to get around that little inconvenience.
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