Sheila Bair held a media conference call to discuss the public private partnership program. It’s almost startling how insistent she is that the problem with toxic assets is simply illiquidity. She doesn’t even seem to entertain the possibility that the assets could be worth far less than the banks say they are.
MS. SASSEEN: So, in other words, are you saying that the prices that will result in this will be much more realistic prices than would result right now, you know, to the extent that there aren’t any buyers?
CHAIRMAN BAIR: Exactly. Exactly right. They will still be, they will be market prices. We’re just trying to tease out the liquidity premium. What’s weighing on market prices right now is that people can’t get financing to buy assets, they can’t get financing to buy assets not many people want to buy, you don’t want to buy. And then you have to hold on to them forever because there’s nobody to sell them to. So, that’s — by providing that liquidity that’s lacking now, we’re hoping to get the prices up to what would really be a true market level.
You can read the whole transcript here.