[politicket]

Instead of saying "debt" in my previous post I should have said "toxic assets". Debt infers the liability side of the balance sheet.

Banks could still sell their toxics assets at 50 like you describe, but they won't. That would require them to take huge write-downs that they're not willing to suffer. They'll just sit on it instead - or buy their own debt and stiff the taxpayer throught the FDIC's non-recourse loan.

[Toddsterpatriot]

or buy their own debt and stiff the taxpayer throught the FDIC's non-recourse loan.

How would buying their own debt "stiff the taxpayer"?