The banks do not knowhow much this toxic paper is worth, if anything: No one will buy it. Now your government has a plan to buyup that toxic paper to getit off the banks books.
The nutcases who supportthis gem should bewaterboarded until they come to their senses.[:@]
released the initial outlines of the administration's overhaul of the bank rescue program on Feb. 10, the markets took a nosedive. The Dow Jones industrial average plunged by 380 points as investors expressed disappointment about a lack of details.
Christina Romer, head of the Council of Economic Advisers, said Sunday that it's important for investors to know that the administration is bringing a full array of programs to confront the problem.
"I don't think Wall Street is expecting the silver bullet," she said on CNN's "State of the Union."
"This is one more piece. It's a crucial piece to get these toxicassets off, but it is just part of it and there will be more to come," she said.
Also in the coming week Geithner is expected to disclose the administration's proposal to overhaul bank regulations to try to prevent a repeat of the financialcrisis.
Geithner has already proven his ineptitude with AIG currently and the fact he was in charge of Federal Reserve Bank of New York. We're told he is the only person to save us but he can't handle turbo tax. This is a bad idea and I hope it get's blocked. Why not fix mark to market first and see where things sit in six months to a year out. Why the rush?
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John Adams “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”
Ronald Reagan: 'Everybody that is for abortion has already been born'
"I never said I was worth it. I only said I wouldn't do it for less " William F. Buckley Jr.
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John Adams “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”
Ronald Reagan: 'Everybody that is for abortion has already been born'
"I never said I was worth it. I only said I wouldn't do it for less " William F. Buckley Jr.
Don't worry, after you print 2 trillion dollars out of thin air, the value of each unit of saidmoney will fall off a cliff. It will be easy to repay in the future, they are counting on it...
For the Government to purchase $1trillion worth of "toxic assets" from the private sector is taking a huge risk with the taxpayers' money and under normal circumstances should be unthinkable. However, these are not normal circumstances. The financial institutions have been paralyzed since last September when Lehman Brothers went bankrupt. The economy can not recover until we have a healthy banking industry. The Bush plan to re-capitalize banks through the injection of equity capital does not appear to have worked. It could be that the only way the banks will feel their capital positions will be stable enough for them to operate normally is if these toxic assets, which continue to lose value, are removed from their books entirely, even if they have to sell them to the Government at a substantial discount from their face value.
The fed and the Bush administration looked atbuying the toxic paper and wisely backed off. That is why the act authorizing the 700 million bailout is called TARP: Troubled Assets Relief Program. The taxpayers are going to be bit big time if this thing goes through.
Riddle me this falcon. If private corporations already hold this paper (with infused tarp money) and at what todays value, what exactly is gained if another company buys that paper again with money fused in by the government? I don't understand the incentive bonused with congress dictating who can make what money.
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John Adams “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”
Ronald Reagan: 'Everybody that is for abortion has already been born'
"I never said I was worth it. I only said I wouldn't do it for less " William F. Buckley Jr.
If private corporations already hold this paper (with infused tarp money) and at what todays value, what exactly is gained if another company buys that paper again with money fused in by the government?
FM, the big problem is that the banks who hold those toxic assets do not know what they are worth. The Obama administration has madelittle attempt to try and value those so called "assets."No one seems to be able to put a current valueon that toxic paper: That is why the banks can't sell the stuff.
If folks buy those "assets" and the US government backs those"assets" then the buyers stand to gain a lot if those "assets" gain in value.If it goes wrong then US taxpayers pony up again.
One creates a scheme whereby the government (the taxpayer) finances the purchase of these assets and limits the downside risk to the private investors. This is the wrong way as it privatizes potential gains while socializing losses. That was the game we were playing with Fannie Mae and Freddy Mac. The loser is mainly the taxpayer. Do we really want to set up the same game that got us here in the first place?
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I don't understand the incentive bonused with congress dictating who can make what money.
US Could Spend 1 Trillion on Toxic Paper
