1 reply to this topic

[mcleert]

Sure looks like a desperation move. Lowering the cost to banks to buy more garbage means more garbage!!!! So, now the banks can get a discount on buying back bad loans. I sell you a loan at 5%, you can't pay me back at 6%..But , now I can ( because of default) purchase your old loan at 4.5%. Problem---who wants to buy the old loan at 6% that I purchsed at 4.5%?

[mike123]

Sure looks like a desperation move. Lowering the cost to banks to buy more garbage means more garbage!!!! So, now the banks can get a discount on buying back bad loans.



I sell you a loan at 5%, you can't pay me back at 6%..But , now I can ( because of default)

purchase your old loan at 4.5%. Problem---who wants to buy the old loan at 6% that I purchsed at

4.5%?

Could you please explain the significance of the discount rate? Who uses it? How it is used? The news
said is largely symbolic.