Good idea: Some folks in Washington are toying around with an idea that would give bankruptcy court judges the authority to renegotiate someone’s mortgage terms if that person were to declare bankruptcy. This seems like a logical way to keep more people in their homes. A renegotiated mortgage could lower monthly payments and possibly prevent foreclosure. To my knowledge, bankruptcy court judges have not previously held this authority.
Bad idea: Paulson stays in his current job…come on, Mr. Treasury Secretary, quit getting kicked around by the talking heads in Congress and take that high-paying CEO job that you know you want!
Good idea: Implement a staged approach to putting money into the market at set increments going forward...this way, the market could gauge the impact of the cash infusions & we could reduce the risk of overspending. This would also allow us to STOP spending if the market stabilizes to an acceptable level.
Bad Idea: Allowing the dishonest folks who originally created the exotic mortgage securities to determine the price that the U.S. government must pay for these securities …this is the ‘reverse-auction’ that has been proposed.
This is how I understand the reverse auction mechanism: banks would compete to unload their worthless paper, naming the price they’re willing to sell…this competition among banks theoretically drives the price down. Technically, this means lowers prices paid by the taxpayer. The only problem with this scenario is that no one really knows how much their paper is worth in the first place. You & I are buying this stuff and trusting the government to pay the best (lowest) price. Do you trust that the brainiacs who got us into this in the first place (the deal-makers who securitized the mortgages) will set a fair price?? This puts them in the driver’s seat a 2nd time…I know where these people’s priorities are…they want to make money, which means getting the highest price they can obtain. Paulson seems all too eager to buy this stuff up as quickly as possible, so do you think that we'll really get the lowest possible price?
I say let the taxpayer set the price….have the government throw out EXTREMELY LOW-BALL OFFERS on these pieces of junk and see who takes the bait. Shouldn’t we ensure that we (the taxpayer) get the lowest possible price on this paper? I don’t know about you, but I just don’t trust the deal-makers who got us into this mess in the first place to name their price. Since it’s my money going out the door here, I WANT TO NAME THE PRICE!
The taxpayer should pay pennies on the dollar for this junk. Those investments banks who do not want to accept OUR low-ball offers can go under….screw ‘em!
Good Idea: Not fretting about the crisis…it’ll all be over in a couple of years.
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