the plan that big bank will buy each other's bad assets is confirmed!
http://finance.yahoo.com/news/Bailedout-banks-eye-toxic-rb-14840542.html?sec=topStories&pos=5&asset=TBD&ccode=TBD
the bail-out plan says that "private investor" take $7 risk to buy $100 worth bad assets. The best way to do it is use $7 (TARP money) from the tax payer's pocket. So the "private investor" pays $0 to buy $100 bad asset. Sound good? to make things even better is that the more you buy, the more Gov money you get! 空手套白狼!
Now the bank can mark their assets $1 for $1 (M2M is gone), so the higher they mark the price of the bad assets, the more money they can get from tax payers. What a rip off! They can even sell their $1 bad assets for $1.2 if they like.
This way, US banks will surely get rid of bad assets, in fact the bad assets now become good assets. Everyone should fight to grab more! It is like that the mob kidnap a hostage and they are going to receive bail-out money for the hostage's parents, now mobs will start fighting to get more hostages that are in their prison!
Well, when kidnap behavor is encouraged, why not kidnap more in the future!
The tax payers are in danger. The paper money under their mattress is going to become toilet paper. This is the ugliest part of the capitalism.
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