Liquid Real Estate Issue 07
Comment: The $700 billion man
“This is the least costly path,” US Treasury secretary Hank Paulson told Sunday morning talk-show viewers when he was out selling his $700 billion bail-out package at the end of September. At the time, details of his plans for the US Treasury to buy impaired residential and commercial mortgage assets from banks were scant and concerns about the so-called Troubled Asset Relief Program’s (Tarp) wider impact were great.
On its own the formation of such a fund is by no means a panacea. Many in the markets have pointed to the problems the Treasury could have agreeing on a price for assets – most of which will be tough to value in the first place. If a price can be agreed, the next worry is whether once banks offload these assets their balance...
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