Bailout backfire

0 views
Skip to first unread message

Smoron

unread,
Oct 8, 2008, 1:02:34 PM10/8/08
to
It is possible that the 700 billion dollar bailout may backfire. The
banks will have to sell their bad derivatives at less than cost, thus
incurring a loss. Such losses may put the banks in bankruptcy.

They can carry such derivatives on their books at full value until
there have been sufficient sales to establish a new and lower value.
The fact that just some banks sell at less than full cost may put all
banks under a lot of pressure.

Reply all
Reply to author
Forward
0 new messages