Author: admin

~ 07/10/08

The bailout money buys from troubled financial companies bad assets that no one in its sane mind would buy. This is a survival ticket for the companies in bad shape. But when the worries are about credit, there is no way to guaranty that credit will exist because of saving the bad companies.

In a nutshell, the banks go like “thanks for buying this crap from me, I am not broken now. But I will be cautious about lending, and I won’t to those with poor credit”.

So, what are we solving, the bank bankruptcies or the credit chain? Yes, the first option only.

The right use of bailout money would be let the banks sink, and ensure that a pool of money exists to finance home buyers.