[lbo-talk] A very different aggregator

Julio Huato juliohuato at gmail.com
Sat Jan 31 21:04:22 PST 2009


Michael Pollak wrote:


> Under one of the plans discussed, toxic assets would be
> valued by an independent party. Where assets are purchased
> at prices below their book values, the government might
> then inject common equity into the banks to make up for
> capital wiped out by the sales.

I thik that Michael is up to something.


>From the viewpoint of the Treasury (and Fed), the toxicity of these
assets is an endogenous variable. These assets are "toxic" under some assumed default rates. But targeted policy action can lower those default rates and turn those assets around. The issue is whether Obama et alia will push that approach sufficiently.



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