On Mon, Sep 29, 2008 at 9:58 AM, Michael Nuwer <[EMAIL PROTECTED]> wrote: > But, if the plan is a substitution of securities, that sounds like a focus > on liquidity problems. If I'm understanding how these thing work (and > perhaps I'm not), the plan does not increase the banks' capital (or is not > an injection of capital).
I think it stops the *depletion* of banks' capital through writedowns. So in an indirect sense it does increase their capital to more than it would have been otherwise. re: liquidity, Paulson and his friends seem to have a difficult time accepting the idea that toxic mortgage assets may actually be toxic. They want to believe that it is all a psychological thing, and if only they can give confidence to the markets, investors will start buying them again at much higher prices than currently. Ultimately of course that depends on whether house prices hold up or they continue to fall. In Paulson's world view, there really was no housing bubble and house prices should really not be falling. It is delusional to say the least. -raghu. -- "Really ?? What a coincidence, I'm shallow too!!" _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
