what we have to watch for is any mention of “land banks” which is one of the many logically flawed Keynesian economic policies – the idea is to establish a bank that will provide cut-rate loans on real estate regardless of LTV and also buy real estate and hold it in their portfolio – in essence, the land bank becomes the lender and buyer of last resort in an attempt to circumvent the price discovery process in an open and free market

this idea is already being floated as part of the bailouts – the idea is that local governments (ie, city, county, state) would establish and grant municipal bonds to subsidize the FB’s in their region – the only problem is that very few local govts have the finances to do this and many of them have credit rating problems that would make the issuance of bonds problematic

interesting times …

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has anyone noticed that all the money being raised by the failing financial institutions is being done in the form of preferred stock?

homework assignment: in a bankruptcy, what is the priority order for paying off liabilities and where does the common shareholder fall?