Quote Originally Posted by GoldenBoy812
That means $700 billion of bad paper is not going to be purchased. Instead, say $50 billion to start, and have another $650 billion to pay interest as well as potentially purchase more. If there are tweakings that need to be done in that time, a few weeks later they buy $50 billion (now holding $90 billion and paying contractual obligations of it). And so on, and so forth.
Oops, a mini typo. What i was trying to illustrate is that if they tweak things, rational response would be to buy less in the next transaction. So they would be buying 40, instead of 50, and if they still need to tweak, they would buy say 35 the next time etc... The inverse is also possible if they start off with good results.