CNN Commentary: Bankruptcy the right answer

[RoyalShock]

I haven't seen a topic on this yet, so I apologize if it has already been posted.

http://www.cnn.com/2008/POLITICS/09/29/miron.bailout/index.html

[e3kmouse]

This pretty much sums up why the bailout deal is fail (from the article):


Further, the current credit freeze is likely due to Wall Street's hope of a bailout; bankers will not sell their lousy assets for 20 cents on the dollar if the government might pay 30, 50, or 80 cents.

The costs of the bailout, moreover, are almost certainly being understated. The administration's claim is that many mortgage assets are merely illiquid, not truly worthless, implying taxpayers will recoup much of their $700 billion.

If these assets are worth something, however, private parties should want to buy them, and they would do so if the owners would accept fair market value. Far more likely is that current owners have brushed under the rug how little their assets are worth.