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View Diary: Hedging their bets -- about exactly WHO owns your Mortgage? (27 comments)

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  •  This is a great journal (3+ / 0-)
    Recommended by:
    xaxado, jamess, Lujane

    You did a great job explaining these confusing financial instruments called CDO's and CDS's.  

    My fear is that no amount of money can be thrown at this situation to prevent more bank failures.  Also, what is the risk to the taxpayer if we take on the "toxic" CDO's and CDS's?  No one can say.  Warrants in the banks who we buy these securities from is nice but will we even collect on that if the banks fail?

    Have our dear Reps even been honest with the public on exactly how do they plan to spend 700 billion dollars?  Seems to me that buying up CDO's and CDS's may be a bad plan.  Loaning money with interest, provided we have first lien, is a much safer way to re-capitalize the banks.

    That's my thoughts.

    •  I'm afraid (1+ / 0-)
      Recommended by:
      xaxado

      the current approach is a Band-aid solution.

      In theory, putting a floor on the market,
      so prices can stabilize is a good idea --

      But the Scope of the Bubble
      and the Wealth Leveraging that the CDS have creating,
      makes it quite likely that this "stemming the bleeding" will work only temporarily --

      just long enough to "kick the can down the road" to the "next guy"

      What about us the Citizen, the home-owner
      were always here, picking up the Tab,
      no matter who is kicking the can, where!

      thanks noofsh, for the feedback

      In a time of universal deceit, telling the truth becomes a revolutionary act -- George Orwell

      by jamess on Sun Sep 28, 2008 at 07:52:59 AM PDT

      [ Parent ]

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