Comments on: Privitizing Gains, Socializing Losses http://www.coyoteblog.com/coyote_blog/2009/04/privitizing-gains-socializing-losses.html Dispatches from a Small Business Sun, 12 Feb 2012 15:59:49 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: More outcomes http://www.coyoteblog.com/coyote_blog/2009/04/privitizing-gains-socializing-losses.html/comment-page-1#comment-17913 More outcomes Thu, 02 Apr 2009 21:04:28 +0000 http://www.coyoteblog.com/?p=7535#comment-17913 How does the expected value change if you run the numbers like this: 25% Chance Investment = $0, 25% Chance Investment = $75, 25% Chance Investment = $125, 25% Chance Investment = $200 How does the expected value change if you run the numbers like this:

25% Chance Investment = $0, 25% Chance Investment = $75, 25% Chance Investment = $125, 25% Chance Investment = $200

]]> By: ElamBend http://www.coyoteblog.com/coyote_blog/2009/04/privitizing-gains-socializing-losses.html/comment-page-1#comment-17912 ElamBend Thu, 02 Apr 2009 19:14:35 +0000 http://www.coyoteblog.com/?p=7535#comment-17912 This is all looking like it is tailored to save the bond holders. The banks take a small loss on the sale of the assets, but save their butts by preserving the bonds. It's just another way of giving the banks money. See here: http://www.bloomberg.com/apps/news?pid=20601087&sid=aKm0M7RHXDoQ or here: http://globaleconomicanalysis.blogspot.com/2009/03/geithners-plan-can-succeed.html This is all looking like it is tailored to save the bond holders. The banks take a small loss on the sale of the assets, but save their butts by preserving the bonds. It’s just another way of giving the banks money.

See here:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aKm0M7RHXDoQ

or here:
http://globaleconomicanalysis.blogspot.com/2009/03/geithners-plan-can-succeed.html

]]> By: Sean http://www.coyoteblog.com/coyote_blog/2009/04/privitizing-gains-socializing-losses.html/comment-page-1#comment-17905 Sean Thu, 02 Apr 2009 17:13:37 +0000 http://www.coyoteblog.com/?p=7535#comment-17905 The payments to the funds are to get the trades and price-discovery mechanism working again. People aren't going to buy or sell these things without some expectation of profit. Unless they are traded and prices discovered, banks are going to continue hiding them and remain zombies. That the requirements for funds are looking more and more tailored to the 'in-crowd' has actually been annoying some fund managers who have been tentatively dipping their toes in this area for months already. I dislike it, but I think it's better than just giving the money directly to the banks to do as they see fit. There are at least incentives to move with this, as opposed to sitting on cash. The payments to the funds are to get the trades and price-discovery mechanism working again. People aren’t going to buy or sell these things without some expectation of profit. Unless they are traded and prices discovered, banks are going to continue hiding them and remain zombies.

That the requirements for funds are looking more and more tailored to the ‘in-crowd’ has actually been annoying some fund managers who have been tentatively dipping their toes in this area for months already.

I dislike it, but I think it’s better than just giving the money directly to the banks to do as they see fit. There are at least incentives to move with this, as opposed to sitting on cash.

]]>