re: #552 quickjustice

Good points. Flushing the toxic assets down the toilet is the solution that turns around the economy. Paulson was going to do that by buying some of them. I was skeptical that there was enough money to do that without bankrupting everyone else, but at least he had the right idea.

At this point, I’d go with a a trading mechanism for the bad paper that enables valuing it. That probably will cause some banks to fail, but on the other hand, it forces them to flush their crap quickly. Right now, they’re hoping that if they just wait long enough, those assets will recover. Good luck with that!

We don’t have time to wait this one out. Force the revaluation of the crap now. Take the hit. It’ll be painful. Let’s turn this around.

For what it’s worth, here’s 3 wood’s 10 point recovery plan.

1. Cut capital gains taxes to zero for at least the next 2 years.

2. Cut income taxes by 25% for the same period.

4. Change the valuation of the mortgages backing these securities from the current modified mark to market to net present value. This is property we are talking about, not some stock certificate.

5. Set up a resolution trust #2 system and buy up the toxic assets to get them off the banks books. Part of that deal is the banks have to start lending again to qualified applicants, now.

6. Set up a trading desk in these mortgage backed securities so we have a clear and open bidding process for trading these things in the market.

7. Re-institute the “uptick” rule for short selling.

8. Enforce the prohibition against “naked” short selling.

9. Begin investigations and prosecutions of people who committed fraud in all this.

10. Repeal the Community Reinvestment Act.