The Bailout
Why, I wonder, doesn't the Treasury just give money to the banks who need it? Why are they offering to buy up the junky bond investments that have caused the banks to need money? If the banks need money, give them money. Take back stock in the bank in exchange. If things work out, the stock goes up and eventually the Treasury gets paid back via the stock gains.
Who knows what will happen with the problem bond investments that the Paulson wants to buy. The Treasury will be paying above market rates for them to begin with. So any increase in the bonds value will have to first make up that difference - just to break even. Then maybe - MAYBE - they'll turn a profit.
What am I missing here? Doesn't this seem obvious?
Who knows what will happen with the problem bond investments that the Paulson wants to buy. The Treasury will be paying above market rates for them to begin with. So any increase in the bonds value will have to first make up that difference - just to break even. Then maybe - MAYBE - they'll turn a profit.
What am I missing here? Doesn't this seem obvious?
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