Treasury To Detail Toxic Assets Plan On Monday

Reuters:

WASHINGTON (Reuters) - U.S. Treasury Secretary Timothy Geithner will announce details on Monday of the Obama administration's plans for removing so-called "toxic" assets from the banking system by enlisting private investors in the effort, the Treasury Department said on Sunday.

Treasury said Geithner will hold a briefing at 8:45 a.m. EST on Monday to talk about wide-ranging efforts to stabilize the financial system through pumping cash into faltering banks and its other efforts to try to increase lending.

Read the whole story: Reuters

Comments

[tbone99]

Unfortunately Geithner , Summers and their other Goldman Sachs buddies are the real toxic asse ts.
They have no grasp of anything but a financial world of unlimited money (of other people's ).

Meanwhile the rest of the country with decades of experience managing a finite amount of cash have been told to be patient and wait while they shake the last pennies out of our national piggy bank to dole out to their friends for more candy.

Ike warned us about the military -industrial complex - and while we were so upset about the war - the financial gangsters have basically destroyed our country without one shot being fired.

[aercolini]

The first Bush team in 2000-2004 was great at staying on message to sell their agendas. Granted, the policies were moronic, meaninful, internal debate was stiffled, and his administration was utterly incapable of multi-tasking. Having said that, it would be nice if the current administration could put foward a strong and specific agenda on how Geitner intends to fix the banking crisis. I don't care if they change the plan later to adapt to circumstances, but I think the American people and the market place at least need the appearance of resolve. The appearence of certainty is more important than the perfect plan. It just seems as if Geitner's response has meandered, and consequently has been muddled. He's just kind of seeing how well TARP works without wanting to get too involved in the actual allocation of where this money is going and whether or not it is actually being lent out. The AIG bonuses are a great example. While I think the administration is probably frusterated at AIG for paying out the bonuses, the message of accountability is undermined by the fact that they removed the provision in the legislation which would have prevented bailout moneys being used to pay for the bonuses. I can understand the administration not wanting the get involved in the meticulous employment contracts of AIG, but that kind of apathy dulls the message. Obama, the Whips in Congress and Kaine need to do a better job at synergizing their message.

[paixa3]

If you want an excellent analysis of the plan go to www.firedoglake.com. I do not mind public and private sector cooperation, HOWEVER, in this plan WE (taxpayers) accept 97 of the risk and crap and the private sector participates with 3 percent and guaranteed no losses. That is not cooperation, that is fleecing.

IMPEACH Geithner and Summers NOW.

[HumeSkeptic]

To tackle risky securities, such as those backed by mortgages, the Treasury will create several investment funds run by private investors who meet certain criteria, such as experience managing similar assets. Treasury again will act as a co-investor, in most cases contributing $1 for every $1 contributed by the private sector and sharing equally in any gains or losses.
...
http://online.wsj.com/article/SB123776474431608981.html

[MuchMadness]

That blurb makes it sound like a 50-50 deal between the government and the private investors, but that bit is only a small piece of the money that the government will be putting into the plan. Piecing things together from several news sources it appears that some of the government money will come from Treasury, some will come from FDIC , some may come from the Fed, and some may come from the Flying Spaghetti Monster.

It is clear that the government feels that in order to get private investors to participate, it has to practically guarantee that they will not suffer any losses. The taxpayers are a different matter.

Since the taxpayers are going to have to pay the burden anyway, we are going to have to accept huge increases in our taxes.

[x4faith]

Paixa3 please advise on where you're getting your information. I just read the article and stated nothing of the sort! Why are you jumping the gun and spreading false rumors when no details were mentioned...Or do you know the preson who worked on the plan with Geithner.

IMPEACH him...why?

[aercolini]

I hate it when republicans complain about government interference in the market place. It's not that they don't want government in the market place. Indeed, they want the government to define property rights, enforce them and establish rules as to how property is transfered. The want the government to establish rules of contract so that transactions can be interpreted, and enforced in a consistant manner. Without government interference there wouldn't be a market place. Governments determine how a market functions by delineating the rules involved in the trillions of individualized commericial transactions carried out every day. It's not as if market places exist in nature, they are created by societal institutions, mainly the state.

What republicans really hate is not government intervention in the market place, but government intervention which is favorable to poor people.

[buckeyedave]

I wonder why this story does not include the cost. Other news agencies are reporting over a trillion dollars.
http://hosted.ap.org/dynamic/stories/B/BANK_RESCUE?SITE=ALOPE&SECTION=HOME&TEMPLATE=DEFAULT

[Tiggy]

Earth to Geithner...if the private sector was interested in helping this economic crisis they would have refrained from layoffs where possible. And some companies could have avoided layoffs, they chose to sacrifice people over the bottom line. As for the rest of the private sector, there is no money. All of our tax dollars, the governments reservoir, has been allocated to Wall Street and now you say that is not enough? What planet are you living on? Every plan submitted has thus far failed or the game plan changed, so why she we blindly trust this solution? Let me guess, there is no more government money to throw at the problem!

[1man1voicenovote]

watch out Fannie Mae and Freddy Mac

Barney Badasset is here

[JShankel]

I sincerely hope this doesn't turn out to be as much of a boondoggle as it appears to be.

Pumping money into these institutions and giving large sums of money to private investors in the hope that they will do the right thing is the plan we've been trying.

In three months, we'll have another phoney baloney kabuki "outrage" festival when we find out to our SHOCK AND HORROR that these jackals just made off with another couple of billion.

Look, there's only one way to do this: if you want money spent a certain way, you have to spend it yourself. Got too many "toxic assets?" Great, step right up and be nationalized.

That's it. No more of this dancing with the devil then bitching when you get burned.

We don't want, don't need, can't afford and would be fools to try to put this house of cards back together again. We need a sensibly regulated financial services system. If the private sector won't provide that, then the government should.

Enough.

[JayDDrew]

I agree. If I had a billion bucks, I sure wouldn't "invest" it with these criminals. The Fed wil have to give them a "Heads, you win, tails, I lose" contract like they've done. Even the most simple of investors would never do that.
If they take the government money, they should be government employees. Otherwise, let them file for bankruptcy and work it out themselves.

[Kassandra]

This whole "bail out the financial industry first" is just more "trickle down" economic theory, only on steroids this time. Fool me once, shame on you; fool me twice (or 30 times) shame on me. There, Mr. Bush, that really isn't so hard, is it?

I wonder if these people have ANY idea how very bad it is becoming out here in the hinterlands? Or is it simply the demands the IMF is placing on America ala Shock Doctrine?

They've got the real economy upside down. If they cut social Security and Medicare benefits they'll take away the last tangibles of the economy for the elderly and disabled, probably including the vets. The gov needs to INCREASE not DECREASE these bennies.

[hamchunk]

You are exactly right. But these politicos (to include Geitner) are not going to let their buddies and/ or contributors go broke.

[pm247]

This plan is even worse for taxpayers than the original Bush admin idea of the gov't buying up toxic assets. It's worse because now, if there are any profits from these assets, they will go to the private investors. But all the losses will still be eaten by taxpayers - the "investors" will be protected.

Let the monster financials go into bankruptcy like any other firm. They are not too big to fail; it's just that those who stand to lose money are too influential to fail.

[sonofsamphm1c]

No they won't, the government will be a partner and will earn a partner's share of any profits. It's also the lender, so it will earn interest income on the loan.

[buckeyedave]

Maybe you don't realize "toxic" assets are in reality worthless assets. there is no capital nor interest to be collected.

[pm247]

That's not how Paul Krugman sees it.

This so-called partnership is a fig leaf over the fact that taxpayers are bailing out the corrupt millionaires who tanked the economy.

[cordyc]

I want to know if all private investors will work for salary? They can sort the mess out and only when it's sorted out, do they get bonuses.

Bet that won't fly.

[naschkatze]

Does "toxic assets" strike anyone else as an oxymoron?

[cordyc]

You betcha!

This is just part of the plan to "fool" us into thinking that our homes and cars are worthless.

The vast majority of the assets have a lot of useful life. Many would like to have a roof over their head and a car to drive to work.

The real problem is that so many American no longer have jobs to pay for these things.

[Kassandra]

Sorta like Jumbo Shrimp, you mean? Yes it does..........

[sandpiper1]

YEP. Why would anyone purchase these worthless toxic assets? It makes no sense to me but then I only did Econ. 101.