Comments on: The Mother Of All Bailouts http://www.bloggernews.net/117937 High-quality English language analysis and editorial writing on the news. Wed, 15 Feb 2012 16:49:11 +0000 http://wordpress.org/?v=2.3.3 By: The Stiletto http://www.bloggernews.net/117937#comment-653936 The Stiletto Tue, 30 Sep 2008 00:23:39 +0000 http://www.bloggernews.net/117937#comment-653936 Expediency and panic were the twin forces driving this thing. With the Jewish holidays this week there will be a cooling off period - plus a couple of days to see how the markets react. The Dow down 777 points today but still closing above 10,000. By Wed. we'll have a better handle on things and maybe alternative plans can be formulated. Expediency and panic were the twin forces driving this thing. With the Jewish holidays this week there will be a cooling off period - plus a couple of days to see how the markets react. The Dow down 777 points today but still closing above 10,000. By Wed. we’ll have a better handle on things and maybe alternative plans can be formulated.

]]> By: Wilfred Candler http://www.bloggernews.net/117937#comment-653723 Wilfred Candler Mon, 29 Sep 2008 22:53:00 +0000 http://www.bloggernews.net/117937#comment-653723 1. The $0.7 trillion bailout does not even address the problem of foreclosure. 2. I think the solution starts by reducing the rate of foreclosures that both involve human suffering, and tend to depress the price of houses. 3. You do this by having people pay the lesser of their agreed mortgage payment (thus retaining title to the house) or 5% annually on the price of the house (price determined by an appraiser (Good luck! Know a better method?), and borrower loses all equity in the house). Those who do not want to pay this lower price should go to foreclosure. 4. This results in capital losses shared between the borrower, who loses all equity, and lender who loses anything lent in excess of market value plus equity. (Incidentally this loss by the lender is likely to be less than allowing many properties to go to foreclosure.) 5. Sliced and diced, this gives a monthly income stream to holders of Collateralized Debt Obligations, and hence a reasonable basis for their valuation. 6. By all means lend money from the Treasury on the basis of CDO’s while the income stream is being established, but don’t buy the CDOs! 7. I do not believe for a moment that the Research Departments of the Fed and Treasury could not come up with a better scheme than is currently being foisted on the congress. Thanks for your time, Will 24/9 1. The $0.7 trillion bailout does not even address the problem of foreclosure.

2. I think the solution starts by reducing the rate of foreclosures that both involve human suffering, and tend to depress the price of houses.

3. You do this by having people pay the lesser of their agreed mortgage payment (thus retaining title to the house) or 5% annually on the price of the house (price determined by an appraiser (Good luck! Know a better method?), and borrower loses all equity in the house). Those who do not want to pay this lower price should go to foreclosure.

4. This results in capital losses shared between the borrower, who loses all equity, and lender who loses anything lent in excess of market value plus equity. (Incidentally this loss by the lender is likely to be less than allowing many properties to go to foreclosure.)

5. Sliced and diced, this gives a monthly income stream to holders of Collateralized Debt Obligations, and hence a reasonable basis for their valuation.

6. By all means lend money from the Treasury on the basis of CDO’s while the income stream is being established, but don’t buy the CDOs!

7. I do not believe for a moment that the Research Departments of the Fed and Treasury could not come up with a better scheme than is currently being foisted on the congress.

Thanks for your time,

Will 24/9

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