There has been new talk of plans to set up a system to buy “toxic assets” at above market prices from the world banks. This weekend G20 talks have begun talk of setting up more “bad banks” in order to clear the books of the financial institutions.
From Market Watch.com
“The request came in a letter to U.K. Prime Minister Gordon Brown from the Institute of International Finance, a trade group of the world's largest global banks. The IIF wants Brown and his G20 colleagues to push the Obama administration in the direction of setting up a bad bank.
Under this approach, governments would buy toxic assets from banks at a price higher than the prevailing market rates. For the time being, private investors simply won't buy the assets at the prices that the banks want. As a result, banks have huge holes in their balance sheets. “
Of course!!!! The bankers have gotten into a mess and they hold everyone hostage because they have the keys to the vault and now they stand pat as the heads of state quiver in fear and now are pushing to pay top dollar for the ineptitude of the Bank....It is absurd, ridiculous and just plain stupid. On the other hand if we are afraid to make the banks sell at market price and are wiling to support them forever they will stand still and pump more and more spin to the media that they are now profitable. In the end we will allow banks to stick us the citizens carrying the weight of a contracting economy on our backs. The banks get away with murder because they now in the end the system will save them from punishment.
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