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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: BirdDog who wrote (45837)	1/4/2002 8:09:04 PM
From: Sully-	Read Replies (1) \| Respond to of 65232

No doubt the banks will take possession of any underlying assets that the borrowers put up as collateral. Unfortunately, with Argentina in a severe recession for years now, plus the devaluation of the currency, the value of the underlying assets is only worth a small fraction of the original loan. Perhaps in years those assets will be worth more. The banks will most likely quickly sell them off at a significant loss as banks are not in the business of developing real estate, running a business, being a landlord, etc. In the mean time, these losses are going to hurt the performance of the banks (actual losses plus opportunity loss) & some banks will go belly up.