Obama administration: New rescue effort to generate $500B to buy up toxic assets from

**min0 lee** · 03-23-2009, 07:58 AM

Treasury unveils long-awaited 'bad-asset' plan - Mar. 23, 2009
Treasury unveils long-awaited 'bad-asset' plan
By partnering with private investors, government hopes it can finally flush out toxic assets from banks' balance sheets.

By David Ellis and Jennifer Liberto, CNNMoney.com staff writers
March 23, 2009: 8:38 AM ET
WASHINGTON (CNNMoney.com) -- The Treasury Department unveiled its long-awaited plan to remove many of the troubled assets from banks' books Monday, representing one of the biggest efforts by the U.S. government yet to tackle the ongoing financial crisis.

Under the new so-called "Public-Private Investment Program", taxpayer funds will be used to seed partnerships with private investors that will buy up so-called toxic assets backed by mortgages and other loans.

The goal is to buy up at least $500 billion of bad assets -- such as subprime mortgages that are now in danger of default. Doing so would help cleanse the balance sheets of many of the nation's largest banks, which continue to suffer billions of dollars in losses.

The government will then run auctions between the banks selling the assets and the investors buying them, hoping to effectively create a market for these assets.

To kickstart things, the administration said it will commit $75 billion to $100 billion and would consider how the program is progressing before committing more money.

The plan, which was widely hinted at over the weekend, appeared to be warmly received by Wall Street. Stock futures, an indicator of how markets may open when trading begins, were sharply higher Monday morning.

Investors have been waiting expectantly for details since Treasury Secretary Tim Geithner first announced the framework of a plan last month to address two of the biggest problems in the banking sector: the toxic assets keeping banks from lending and the shortage of capital at major institutions.

One of the biggest difficulties in getting the program off the ground was how to price the soured assets. If the government paid too little, banks would take the hit. But if the government overpaid, then already-soaked taxpayers would feel the pinch.

One nagging concern, however, is whether the government's involvement will actually spur banks and private investor groups, such as hedge funds and private equity firms, to participate.

Administration officials indicated Sunday they had gotten support from private investors and banks who have been briefed about the program. But some analysts questioned whether the government's help would be enough to push investors and banks toward figuring out a price.

At the same time, there are fears that investors may be reluctant to participate in light of the fact that Congress has retroactively altered the terms of many of the government rescue programs so far.

**min0 lee** · 03-23-2009, 09:02 AM

Wall Street rallies amid news of Fed's plan to absorb toxic assets
THE ASSOCIATED PRESS
Updated Monday, March 23rd 2009, 10:47 AM

Herbert/AP
The Obama administration took a fresh shot at ending a national paralysis in lending Monday, teaming up with investors to buy bad bank assets and ease credit for hard-pressed consumers and businesses.
The program, announced by Treasury Secretary Timothy Geithner, was not the first such attempt by the new administration to revitalize an economy mired in recession.
Geithner pleaded for patience, saying work to rehabilitate the banking and financial industry has to go forward despite "deep anger and outrage" over bad lending and investment practices.
The newest initiative, he told reporters, will seek to harness government and private resources to purchase an initial half-trillion dollars of bad assets off the balance sheets of banks. And he held out the expectation that the program eventually could grow to $1 trillion
Wall Street seemed to feel rejuvenated, at least at the opening. In late morning, the Dow Jones industrial average was up 221 at 7,500. The Standard & Poor's 500 index was up 23 at 792, and the Nasdaq composite index is up 42 at 1,500.

**busyLivin** · 03-23-2009, 03:22 PM

The markets certainly liked the plan today... up almost 500.

**ZECH** · 03-23-2009, 06:11 PM

They think its gonna do some good.....we'll see.

**Prince** · 03-23-2009, 06:14 PM

Originally Posted by dg806

They think its gonna do some good.....we'll see.

I just wish people would give him a chance, he has been in office 2 months, if in 4 years nothing has improved or if its gotten worse, then criticize him all you want.

**busyLivin** · 03-23-2009, 06:23 PM

Originally Posted by Prince

I just wish people would give him a chance, he has been in office 2 months, if in 4 years nothing has improved or if its gotten worse, then criticize him all you want.

I don't think it's about not giving him a chance. I don't like where he's taking the country. The money he's spending & the plans he's forming I think are dangerous. I don't understand why I'm expected to sit silently while this happens.

**maxpro2** · 03-23-2009, 06:25 PM

Originally Posted by busyLivin

I don't think it's about not giving him a chance. I don't like where he's taking the country. The money he's spending & the plans he's forming I think are dangerous. I don't understand why I'm expected to sit silently while this happens.

Because you voted for the last President twice, who got us in this fucking mess to begin with.

**Irons77** · 03-23-2009, 06:31 PM

Originally Posted by maxpro2

Because you voted for the last President twice, who got us in this fucking mess to begin with.

Not completely true dude.

**maxpro2** · 03-23-2009, 06:32 PM

Originally Posted by Irons77

Not completely true dude.

What is not completely true: that he voted for Bush or that you are a huge douchebag?

**Irons77** · 03-23-2009, 06:37 PM

Originally Posted by maxpro2

What is not completely true: that he voted for Bush or that you are a huge douchebag?

Both

**maxpro2** · 03-23-2009, 06:38 PM

Originally Posted by Irons77

Both

Agree to disagree.

**min0 lee** · 03-23-2009, 06:51 PM

Originally Posted by Prince

I just wish people would give him a chance, he has been in office 2 months, if in 4 years nothing has improved or if its gotten worse, then criticize him all you want.

I will be the first to criticize him....with no mercy.

**Prince** · 03-23-2009, 07:03 PM

Originally Posted by busyLivin

I don't think it's about not giving him a chance. I don't like where he's taking the country. The money he's spending & the plans he's forming I think are dangerous. I don't understand why I'm expected to sit silently while this happens.

you're right.

**FishOrCutBait** · 03-24-2009, 10:03 AM

Originally Posted by Prince

you're right.

I dont understand why you're cheerleading for him.

In two months if the man is signing and heading and allowing bills to give out close to TWO TRILLION DOLLARS, how can you sit idly by and keep cheering?

what about socialism is appealing to you? the part where if you make too much money, the government will literally take it away? or the part where the government gets to decide which medical treatments you get, what kinds of lightbulbs you can put in your house and what car you can drive?

**brogers** · 03-24-2009, 10:18 AM

This plan is absurd. It puts the tax payers on the hook for potential losses and none of the profits.

Even Paul Krugman doesn't like it.

**Prince** · 03-24-2009, 10:22 AM

Originally Posted by FishOrCutBait

I dont understand why you're cheerleading for him.

In two months if the man is signing and heading and allowing bills to give out close to TWO TRILLION DOLLARS, how can you sit idly by and keep cheering?

what about socialism is appealing to you? the part where if you make too much money, the government will literally take it away? or the part where the government gets to decide which medical treatments you get, what kinds of lightbulbs you can put in your house and what car you can drive?

because I believe in what he is doing.

**FishOrCutBait** · 03-24-2009, 10:23 AM

Originally Posted by Prince

because I believe in what he is doing.

why? I am purely curious at this point.

**min0 lee** · 03-24-2009, 10:30 AM

Cheering for the Nation to succeed.

I changed my light bulbs and it's amazing how much I saved from the switch.

I was behind Bush but after a while I found out he wasn't the right guy.

Why isn't Ron Paul more visible?
It would be cool if Obama had a chat with him.

**FishOrCutBait** · 03-24-2009, 10:38 AM

Originally Posted by min0 lee

Cheering for the Nation to succeed.

I changed my light bulbs and it's amazing how much I saved from the switch.

I was behind Bush but after a while I found out he wasn't the right guy.

Why isn't Ron Paul more visible?
It would be cool if Obama had a chat with him.

Why would he though? Ron Paul is literally the polar opposite of Obama, politically.

Plus, itd get him so little publicity, why would Obama?

I'm cheering for America to succeed, but not as a new, united socialist republic. I want less government. Obama is giving us nothing but more.

**Burner02** · 03-24-2009, 10:47 AM

Originally Posted by maxpro2

Because you voted for the last President twice, who got us in this fucking mess to begin with.

I voted for Bush twice. First time, thought he was the better candidate and the 2nd cause he was the lesser of two evils.
You can't just blame Bush..the guy before him did a good deal to fuq up the real estate market.
and the congress under both administrations.
What's the saying: those guys / government made a huge shit sandwich and we are all gonna have to take a big bite.

**min0 lee** · 03-24-2009, 10:56 AM

Why would he though? Ron Paul is literally the polar opposite of Obama, politically.

Now that's the problem, why can't all parties get together and fix this shit?
I bet if he came with the cure for AIDS someone will be against it.

Plus, itd get him so little publicity, why would Obama?
Obama or Paul? I'm already getting nausea from seeing Obama in all of the newsstand magazines...Paul needs a whole lot of it, the only exposure he gets is on Forum signatures around the net...

I'm cheering for America to succeed, but not as a new, united socialist republic. I want less government. Obama is giving us nothing but more.

We will find out in a bit...2 months and he's a failure, it's amazing how a negative thought can cloud people.

**FishOrCutBait** · 03-24-2009, 11:04 AM

Originally Posted by min0 lee

We will find out in a bit...2 months and he's a failure, it's amazing how a negative thought can cloud people.

No, two months and already he has gone so far off the edge of my plane of "this is okay" ness, now he's a failure.

why would a libertarian want a socialist president? Why should I be asked to support anything he does?

**min0 lee** · 03-24-2009, 11:12 AM

Originally Posted by FishOrCutBait

No, two months and already he has gone so far off the edge of my plane of "this is okay" ness, now he's a failure.

why would a libertarian want a socialist president? Why should I be asked to support anything he does?

The market went back up.

I didn't know he was a socialist, they said he was more of a commie. Whatever, the past regime was so bad that we are stuck we a failure.

**min0 lee** · 03-24-2009, 11:13 AM

Is this accurate?
Libertarianism

Libertarianism is a term used by a broad spectrum[1] of political philosophies which seek to maximize individual liberty[2] and minimize or abolish the state.[3] There are a number of libertarian view points, ranging from anarchist to small government, and from anti-property to pro-property.[4][5][6] The word libertarian is an antonym of authoritarian.[7]

**FishOrCutBait** · 03-24-2009, 11:19 AM

Originally Posted by min0 lee

Is this accurate?
Libertarianism

Libertarianism is a term used by a broad spectrum[1] of political philosophies which seek to maximize individual liberty[2] and minimize or abolish the state.[3] There are a number of libertarian view points, ranging from anarchist to small government, and from anti-property to pro-property.[4][5][6] The word libertarian is an antonym of authoritarian.[7]

Yes, roughly.

I expect, and desire very little of the government. The new political powers that be want the government to be involved in our everyday lives, to control more and more facets that affect you and I every day, to regulate more and more of what we can and cannot do on a day to day basis. The Federal Government now owns and controls many (and more coming) companies and financial institutions, which concerns me greatly.

If I am going to live in a socialist nation, I want to have that decision, I would pick somewhere in Europe. I dont want America to be that way but apparantly I dont have a choice.

**I Are Baboon** · 03-24-2009, 11:25 AM

Meh, what's another 500 billion?

300 billion here, 600 billion there...

**min0 lee** · 03-24-2009, 11:25 AM

Funny thing is that when they mention him at work I don't defend him at all.

**Prince** · 03-24-2009, 11:29 AM

Originally Posted by FishOrCutBait

why? I am purely curious at this point.

I honestly believe he is going to turn things around, he is a true leader, we have not had one of those in quite some time.

**Dale Mabry** · 03-24-2009, 11:37 AM

Originally Posted by FishOrCutBait

I dont understand why you're cheerleading for him.

In two months if the man is signing and heading and allowing bills to give out close to TWO TRILLION DOLLARS, how can you sit idly by and keep cheering?

what about socialism is appealing to you? the part where if you make too much money, the government will literally take it away? or the part where the government gets to decide which medical treatments you get, what kinds of lightbulbs you can put in your house and what car you can drive?

They aren't taking any more money from the "rich" than was being taken before. He has yet to raise income taxes on anyone, although I imagine he eventually will. This bailout is nothing more than socialism, I agree, TO THE RICH. So what if he wants to give a few thousand middle class people willing to work shitty jobs working on highways and wind energy?

**busyLivin** · 03-24-2009, 11:58 AM

Originally Posted by Prince

he is a true leader, we have not had one of those in quite some time.

Based on what though? He's been in office for 2 months, was a nobody before that, and has yet to accomplish anything. What makes him a true leader?

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