Excellent video interview below on alternatives or additions to Obama's stimulus package making it's way through Congress, and a complex 'bad bank' idea that the Obama Administration is struggling to develop.
You know, something that nobody is talking about in the media, the toxic instruments in question that the "bad bank" would presumably buy and hold for re-sale, they are not real assets as with what the RTC dealt with in the '80's. Many of these derivatives are not real assets and if not needed are not really worth anything. The whole idea that they can be bought, held, and later sold at a higher price is a false one. Plus, the scope of the existing market of these toxic derivatives is being grossly understated.
The solution is not to buy at expense to the real markets what are near worthless unreal assets. The realistic solution is to correct the legal framework in an orderly manner and unwind, wipe away, dissolve these classes of unreal, toxic derivative instruments. But first get rid of "mark to market" on them, and then figure out how to dissolve them in an orderly manner without public cost to real markets.
Many of these derivatives were an experiment actually by physicists who knew nothing about real value. It is time to acknowledge that, admit the mistake and move on in a realistic manner.
"Obama's Stimulus: Waving the Wand" - Will President Obama's stimulus package be the magic fix for the economy? Steve Forbes, Forbes CEO, and Mark Zandi, of Moody's Economy.com, share their insight. Tues. Feb. 3 2009 Video: http://www.cnbc.com/id/15840232?video=1020559523
Aloha, Brad
You know, something that nobody is talking about in the media, the toxic instruments in question that the "bad bank" would presumably buy and hold for re-sale, they are not real assets as with what the RTC dealt with in the '80's. Many of these derivatives are not real assets and if not needed are not really worth anything. The whole idea that they can be bought, held, and later sold at a higher price is a false one. Plus, the scope of the existing market of these toxic derivatives is being grossly understated.
The solution is not to buy at expense to the real markets what are near worthless unreal assets. The realistic solution is to correct the legal framework in an orderly manner and unwind, wipe away, dissolve these classes of unreal, toxic derivative instruments. But first get rid of "mark to market" on them, and then figure out how to dissolve them in an orderly manner without public cost to real markets.
Many of these derivatives were an experiment actually by physicists who knew nothing about real value. It is time to acknowledge that, admit the mistake and move on in a realistic manner.
"Obama's Stimulus: Waving the Wand" - Will President Obama's stimulus package be the magic fix for the economy? Steve Forbes, Forbes CEO, and Mark Zandi, of Moody's Economy.com, share their insight. Tues. Feb. 3 2009 Video: http://www.cnbc.com/id/15840232?video=1020559523
Aloha, Brad
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