Banking and the Acquisition of Toxic Assets by the US Government

On 3 October, Congress and President Bush agreed that Tarp authorities spent $ 700 billion to purchase toxic assets from financial institutions (research report). With the newly established CAPP (Interpretation) and 707 financial institutions aimed at reducing credit availability by the end of 2008, $ 1000000000 to 25000000 at TARP ... i9k (Query Report) Tarp and total demand demand help output and job output opportunities. Piquet (TARP and incentive Thomas Sowell real estate boom and bust 84 and 85) 2008 () Large investment banks, insurance companies, and (holding company), AIG, Citigroup, Merrill Lynch significantly from secondary mortgage company Loss as if suffered

"Banks want to reduce bad assets, but rather they have better information than the market of their bad assets, how much, so the market for the sale of bank assets has a lot of discounts, We do not offer high quality assets sold by banks, but I know this a little, but there is no need to purchase assets without worth, the market withdraws, "Akarov tackles an interesting one Is that there is no way to prevent or alleviate it just because he has not left us a problem.The important part of his work is the importance of trust in market stability.He As a reputation and brand recognition, I talked about quality assurance that is not informally written that it is a prerequisite for trade and production, but he also has official license / regulation and uncertainty I pointed out other legal protection of clarity on how to help reduce sex, but sex In this case, there is no adverse selection problem, as the fundamental value of the asset is certainly known to some extent.

What is this related to consent? Large banks and governments have established a system called "privatized profits, social losses". What could happen is that banks collapse on inflation (gold printing), sales of negative yield bonds, and some trillion dollars of bad assets, resulting in credits that assume excessive risk · Derivatives and other non-performing assets are used to buy fake items Printed goods will be paid. I will borrow money. We do not agree to purchase these toxic assets and are obliged to fall into a situation where we can not win. Now our debt burden provides thousands of dollars with expanded debt and continues to impair the earth's ecosystem for future generations. These are very large externalities

In the fourth quarter of 2008, the central bank jointly bought more refunds from the $ 2 trillion financial institutions to non-performing assets, and cash refunds to the banking system. The idea is that these bank failures around the world, if a large company can not get commercial paper (overnight credits) can not fund the failed daily work. When a large insurance company like AIG bankrupts, the insured will reveal himself. Almost all banks are bankrupt, many people are awake, they know that they can not access the bank account. Bank transfer is done to the remaining banks. Desperate people are hoping to withdraw the remaining cash to buy meals and essence at ATM. Chaos will explode in a short time