Wednesday, April 01, 2009

Cosmo Kramer always wanted to be a banker


The latest from the Econtrarian, Paul Kasriel.
We suspect that the regulators will “encourage” this latter group of institutions to sell their impaired assets. After all, one of the arguments for not marking down the value of legacy assets to market was that there was no market. In the not-too-distant future there will be a market. But what if selling legacy assets into the PPIP results in a selling institution becoming under capitalized? The regulators will tell said institution to raise additional capital in the private market. But what if the cost of this new capital is prohibitive? This is where Cosmo Kramer comes in.
Does Kramer Finally Get to Be a Banker and Does There Have to Be Skin in the Game for CDS?
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