850 Billion Dollar Stimulus Package

You can use any buzz phrase you like. "Complete economic collapse" just sounds foolish to anyone who knows how an economy works. I will be afraid when Wal-Mart goes down.

And if government ownership pf things worked the Soviet Union would be the most powerful nation on earth.

I don't think you know what I have considered and should probably let my ideas speak for themselves.

These toxic assets are really only toxic because of accounting rules. They may be severely down, but they are not worthless because they are backed by actual houses. A lot of the banking crisis could be resolved if a methodolgy were developed to value assets. I am sure there is some Big 4 accounting partner who is going to make his name with a methodology to do this that satisfies GAAP and investors.

But they can take those large banks place in the markets. The primary driver of a banks growth is deposits. If regional and local banks can grab a fraction of Citi's or Chase's client base they can do more of other activities like extend credit.

I think we are throwing good money after bad and are much better suited to let the banks collapse and be replaced by healthy banks.

 

Stop pretending nationalizing banks is not communism.

That isn't how these assets work. An asset backed security is made up of something like 1/6 of several mortgages. Some of them are in good shape others are in poor shape, but to be safe noone wants to buy these things, and there is no market for them.

That is making it impossible for banks to comply with FAS 157 which requires a mark to market.

It will take years to develop the rules, but this recession has shown us that FAS 157 cannot be universally applied.

I disagree. There are healthy investment banks and healthy commercial banks, and without the government propping up the big dogs they would grow to meet the market.

The asset backed securities will be purchased by someone at some price, and it can be worked out through bankruptcy. The government does not need to own the banks for the balance sheets to get clean.

I don't see government intervention as absolute necessity. In fact I think outside of a regulatory role I wish they would sit it out all together.

 

I will take Sol.
http://money.cnn.com/2008/11/21/news/fair.value.compromise.fortune/index.htm?postversion=2008112109

Should have known my old firm would propose something to save the day.

 

This is the same douche bag who in 2002 stymied the republican move to tighten back up on Fannie Mae and said "even if Fannie Mae fails the government will not bail them out". Ya right Barney, get that pickle outta yur azz. He wanted to "roll the dice". Barney Frank is a big fuggin problem. He needs to be ousted. Almost everything he touches turns to shiat. Im of the opinion whatever he says, do the opposite. You are bound to be right.

Notwithstanding Barney Frank, we wouldnt have these impossible accounting problems if the stupid FSMA act of 1999 was shelved. That one act created these super financial entities that an army of accountants still cant figure out.