Geithner’s Public-Private Investment Plan…?
Jul 05, 2009
in
Private Real Estate Loans
In the beginning of this week the government proposed a plan that would potentially unfreeze credit markets by purchasing prominent banks toxic assets, or newly named "legacy assets". It will purchase legacy loans and legacy securities, both backed by real estate assets.
When the private investors and government purchase these toxic assets, what happens next? How are these establishments going to possibly profit from them? What will drive their price up or down?
I am sure it’s as simply as supply and demand, but how do these markets work?
Thank you in advance!
Brandon
anybody???……..
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One comment
Benjamin Graham on July 5, 2009 at 8:52 pm
The government does not plan to profit from this, they are simply taking these toxic assets off the balance sheets of these banks. This way these banks can lend without worrying about how to get back the money they lost from these toxic assets. So it’s pretty much like giving them money.