Richard Shelby, Republican Senator from CNBC, appeared on the network a short-time ago and lectured how the Treasury was going to use taxpayer money to buy worthless loans. It’s is because of comments like that the package did not pass the House. There is so much misinformation out there already, it is not helped by senior Senators overstating the case.
Lots of the loan packages out there are seriously impaired, everyone knows that, but they are not worthless. Once the government (or others) emerge as buyers, a market will be rebuilt. Already Goldman Sachs has put together a fund to buy distressed assets and more will come to market once price transparency is reestablished. Prices will be low, but there will be prices. Shelby should stop spreading misinformation.
