This is trouble. Now the Fed will have $700 billion worth of “bad debts” and is supposed to try to sell them back into the market over a period of years? I smell a boondoggle to come - more than one.
What incentive does the Fed have to try to make the best deal? To package a couple of dogs in with a bundle of winners? Some people will make out like bandits. A huge transfer of wealth for a few, courtesy of the Federal Reserve...
No coincidence that Goldman Sachs and Morgan Stanley just became bank holding companies. The SEC is useless to a street without brokerages... the Fed on the other hand will be their new best friend.
If they buy them at a large enough discount, reselling won’t be a problem. But that what remains to be seen in my mind.
That said, I actually know firms buying loans like this and making a pretty penny. They were ahead of this mess. It can be done, and very profitable.
the Fed will have $700 billion worth of “bad debts”
and squatters living in $300,000 homes, that they can keep, with all the furnishings and 2 new cars they can now afford payment on, being Congress will forget all debtors