Comments on: The Geithner Interview

By: Economic Blog, Everything Economic » Toxic Car Follow-Up: Pricing Toxic Assets

Tue, 24 Mar 2009 01:00:08 +0000

[...] In other words, clean assets are the ones subject to symmetric uncertainty, while toxic assets are the one subject to asymmetric information. This point seems to be quite clear from the theoretical point of view, but many observers seem to believe that the cause of the low prices lies not in the asymmetry of information but in some form of irrationality that is right now pervasive in the capital markets or in some form of uncertainty regarding the availability of capital on the part of the buyers. An important example of this kind of confused reasoning was provided in a recent interview by Treasury Secretary Tim Geithner. [...]

By: Wonk Room » Kashkari: Treasury’s Bank Plan Influenced By ‘Unsolicited Proposals’ From The Private Sector

Wed, 11 Mar 2009 20:24:09 +0000

[...] thinking of the kind that has hampered responses to this crisis from the beginning. They could; but they could just as well not.” And if they don’t, then taxpayers are stuck with the bill, while the investors get [...]

By: ‘NATIONALIZATION FOR BEGINNERS,’ BY SIMON JOHNSON. FORMER CHIEF ECONOMIST AT THE WORLD BANK. NOW PROF. AT M.I.T. EXCELLENT PRIMER ON THE SUBJECT. « Want Less Blog

Tue, 10 Mar 2009 01:00:49 +0000

[...] to resolve the crisis. And I think that nationalization should be on the table, rather than being written off as some fundamental denial of the laws of physics. « ‘BEHIND THE [...]

By: Nationalization for Beginners « The Baseline Scenario

Nationalization for Beginners « The Baseline Scenario — Mon, 09 Mar 2009 17:15:03 +0000

[...] to resolve the crisis. And I think that nationalization should be on the table, rather than being written off as some fundamental denial of the laws of [...]

By: Blick Log » US-Plan zum Kauf toxischer Assets als Chance für Kapitalmärkte?

Blick Log » US-Plan zum Kauf toxischer Assets als Chance für Kapitalmärkte? — Mon, 09 Mar 2009 06:53:50 +0000

[...] denn der US Finanzminister kommt ebenfalls zu der Ansicht, dass die toxischen Assets einen höheren inneren Wert haben. Dies ist allerdings unter Ökonomen und anderen Beobachtern heftig umstritten, wie Paul Krugman in [...]

By: yo yo « The Budz

yo yo « The Budz — Sun, 08 Mar 2009 20:59:00 +0000

[...] articles at Baseline Scenario, including here, here and here (among [...]

By: Wonk Room » Is Geithner Taking Goldman Sachs’ Word That Toxic Assets Are Actually Worth Something?

Fri, 06 Mar 2009 19:12:02 +0000

[...] has posited that the toxic assets have a “basic inherent economic value” that is absent because of “the absence of financing and credit.” Unfortunately, [...]

By: CBS from the West

CBS from the West — Wed, 04 Mar 2009 19:27:45 +0000

Exactly backwards. It is money that has no inherent value. The inherent value of a house is that you can live in it. Its usefulness in satisfying this basic need for shelter does not change with the whims of any market. If you have one, it doesn’t really matter what “the market” thinks it’s worth–you can just live in it. The same with other real goods and services: they have inherent value in that you can use them to serve your needs and wants.

Money is only worth what markets let you buy with it–its value is constantly in flux.

By: La dérive Keynesienne par Paul Krugman | GraphSeo Bourse

La dérive Keynesienne par Paul Krugman | GraphSeo Bourse — Wed, 04 Mar 2009 13:32:20 +0000

[...] privées, même si elles sont en faillite, parce que… Et bien, juste parce que. Tout ceci exaspère l’économiste James [...]

By: pptvark

pptvark — Wed, 04 Mar 2009 04:43:18 +0000

Exactly agree, creating yet another credit bubble to explode is ludicrous and criminal.

By: Michael Cohen

Michael Cohen — Tue, 03 Mar 2009 03:16:37 +0000

I can’t see with a controlling share or even “threats” in private it cannot transfer toxic assets. If its illegal for the banks to transfer the monies. And as an owner it should be able to supply Capital, the standard way would be to provide equity which the government would now own. American political discussion is full of assertions without any semblance of evidence that something is good or bad. In fact, one can very convincingly argue that while the state may be poor over the long term for routine management, it is far superior when significant novel decisions are required. Note that all believes this in practise. If this wasn’t believed in Wartime one would run the country by Lassez Faire, the magic markets then should do a better job than rational planned action. One never hears a critique of how the market allocates investment capital which is interesting because it is the place it is probably the weakest. Non critical pricing decisions are probably best to leave to an auction or market due to the effort otherwise required to get the price right as well as the inherent corruption in other solutions.

By: Billy Jones

Billy Jones — Tue, 03 Mar 2009 02:37:46 +0000

like leading lambs to the slaughter

By: Phil

Phil — Tue, 03 Mar 2009 02:07:17 +0000

Exactly. That’s the point.

By: Billy Jones

Billy Jones — Tue, 03 Mar 2009 02:03:03 +0000

that what happened the past eight years…..look where that got us

By: Phil

Phil — Tue, 03 Mar 2009 01:58:04 +0000

And the price someone is able to a house or other asset is based on the availability and cost of capital.