Comments on: Rationale of the Bailout http://www.outsidethebeltway.com/archives/rationale_of_the_bailout/ Online Journal of Politics and Foreign Affairs Wed, 25 Nov 2009 19:43:23 -0600 http://wordpress.org/?v=2.8.5 hourly 1 By: Steve Plunk http://www.outsidethebeltway.com/archives/rationale_of_the_bailout/comment-page-1/#comment-515318 Steve Plunk Mon, 29 Sep 2008 21:37:12 +0000 http://www.outsidethebeltway.com/?p=25554#comment-515318 What are the odds of the riskier loans being renogotiated to terms more likely to keep the borrowers paying? If you are buying these at a discount it gives you the wiggle room to better the terms and still make a profit. It seems more of this should be going on before letting the loans sour completely. Having new owners of the paper makes this easier to justify as well. What are the odds of the riskier loans being renogotiated to terms more likely to keep the borrowers paying? If you are buying these at a discount it gives you the wiggle room to better the terms and still make a profit.

It seems more of this should be going on before letting the loans sour completely. Having new owners of the paper makes this easier to justify as well.

]]> By: Michael http://www.outsidethebeltway.com/archives/rationale_of_the_bailout/comment-page-1/#comment-515307 Michael Mon, 29 Sep 2008 20:33:48 +0000 http://www.outsidethebeltway.com/?p=25554#comment-515307 <blockquote>But if a large enough percentage of these assets are good and people are currently being overly pessimistic then the government could make money. Most people satisfy their mortgage obligations. Most homes get paid off.</blockquote>My concern is that once the government owns those mortgages, debt-forgiveness will be the new campaign issue, and we will give away any money we might have made back from them in the name of buying votes. It's got all the socialist benefit of welfare, and all the capitalist benefit of not giving the government your money. <blockquote>It could be that the government is really going to buy just the stinkers are the taxpayer is left holding the bag.</blockquote>There's that too. Under the current plan, who decides what the government can buy, the Treasury or the company selling to them?

But if a large enough percentage of these assets are good and people are currently being overly pessimistic then the government could make money. Most people satisfy their mortgage obligations. Most homes get paid off.

My concern is that once the government owns those mortgages, debt-forgiveness will be the new campaign issue, and we will give away any money we might have made back from them in the name of buying votes. It's got all the socialist benefit of welfare, and all the capitalist benefit of not giving the government your money.

It could be that the government is really going to buy just the stinkers are the taxpayer is left holding the bag.

There's that too. Under the current plan, who decides what the government can buy, the Treasury or the company selling to them?

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