Bad Banks good for you?

In the ongoing effort to free up liquidity in the financial markets, the Fed has pledged taxpayer money to fund (I will call them suicide) banks that will by and hold the toxic assets that are currently plaguing banks . These bad banks will buy and hold with the notion that maybe, just maybe, after many years the value of the troubled assets will regain some value after corresponding markets have stabilized and the banks will be able to turn some kind of profit.  Or if nothing else they will have jumped on the CDO grenade and saved the banks to lend another day.

Paddy Hirsch explains with a swift, snowy theme.

Why ‘bad banks’ might be a good thing from Marketplace on Vimeo.

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