Regarding the bank bailout plan, I keep hearing about how investors still don’t know how the government plans to price the toxic assets in a way that will please both the banks holding the assets and the private investors looking to buy them.
Why not a public auction? It would be the banks’ responsibility to provide the necessary information (risk rating, loan terms, etc.) to potential bidders, and let them pay what they will.
Of course, banks’ responsibility has been in short supply lately…did I just answer my own question, or does anyone else have any thoughts?
Thanks NT, but isn’t that the whole point of an auction? If the assets are worth more, more bidders will come in until they reach a fair value.
Originally posted 2009-07-03 19:23:44.
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if bidding, it will sell way lower than what it is actually worth. and i dont mean it will come down to the price of the real value (if you know they inflated a lot of value on homes)
Sealed bid auctions. Great idea!