评论垃圾回收法案和破产法案 -- by DaFo

marole

2. Is toxic asset really toxic?
The pricing of the toxic assets is complicated. Someone on CNBC said the only price is the fair market value and all the others are just opinions. I would say all the "prices" are opinions. The banks will not sell the assets at the current market value because it is not "fair". It is "fair" only when you sell a small amount for emergency. To sell these assets at market value in bulk is insane. Government can seize the banks and clean the balance sheets. But they are afraid of the consequences and the coming political scrutiny. However if the assets were bought higher than the market price without proper PR, their political careers were done.

No fixes guarantee the market to recover sooner. But "doing nothing is not acceptable". The government needs to play some role. However the government is not a regular investor even not a big investor. It is thousand times stronger than the biggest investor in the market. In this sense, he can do whatever he want. And it is self-justified. But the government is composed of groups of people. So the action will be a result of compromise. The "bad bank" has to be done one way or another. The only question is when and to what scale.

In the end, it is all about perception. Years later, we may view what government did and is doing is no better than the relentless lending in the previous years.