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My God! And now for something unbelievable... - David Guyatt - 23-03-2009

Quite incredible. Not content with bankrupting countless families, throwing them out of their "repossessed" home, plundering their pensions and placing them in tax debt for the next hundred years because of the financial plunder of the bankers fraternity, "Git" Geitner now wants to award soft loans to private investors to buy up "troubled assets" (for which properly read "toxic crap").

US details toxic asset programme

[Image: _45591475_007040610-1.jpg]
Mr Geithner said the plan would be better for taxpayers

The US is set to announce details of a $500bn (£343bn) plan to encourage investors to buy up toxic assets.

The plan will offer subsidies in the form of low-interest loans to private investors to encourage them to buy troubled mortgages and other loans.

Writing in the Wall Street Journal, US Treasury Secretary Timothy Geithner said the measures were needed to help the financial system recover.

The plan is due to be formally launched later on Monday.

The "Public-Private Investment Programme" will purchase from banks the troubled mortgages and securities that have been at the root of the credit crisis.

“ This should mean that banks become less anxious ”
Robert Peston, BBC business editor
It will initially provide financing for $500bn of toxic assets, with the potential to expand up to $1 trillion.

"Over time, by providing a market for these assets that does not now exist, this programme will help improve assets values, increase lending capacity by banks, and reduce uncertainty about the scale of losses on bank balance sheets," Mr Geithner said.

He added that the plan was needed because the US financial system as a whole was "still working against recovery" and "many banks, still burdened by bad lending decisions, are holding back on providing credit".

He said that encouraging the private sector to take part would be better for the taxpayer as the risks of purchasing toxic assets would be shared.

World leaders will meet next month in London to discuss measures to tackle the downturn. See to the G20 summit.
The G20 countries are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, the US and the EU.
BBC business editor Robert Peston said the aim of the plan is to remove as many bad assets as possible from banks' balance sheets.

This should mean that banks become less anxious about future write-offs and become more confident that they have the capital resources to re-start lending.

It is an alternative approach to that taken by the UK Treasury, which has used taxpayer's money to insure Royal Bank of Scotland and Lloyds Banking Group against future losses on some £600bn of poor loans and investments, he added.

Stocks rise

The markets have been eagerly awaiting the details of the US plan to tackle bank's toxic assets, which have been seen as a drag on world recovery.

Stocks rose worldwide on hopes that the plan would go some way to cleaning up the world financial system. The FTSE 100 of leading UK shares was up 1.64%, or 62.95 points, at 3905.80.

The price of crude oil also hit its highest in almost four months at close to $53 a barrel on optimism the plan would help the US climb out of recession.

The plan was originally announced in February, shortly after Mr Geithner took up his post as Treasury Secretary but details were scant on how it would work.

The Bush administration abandoned its earlier plans to buy up toxic assets in October 2008, and decided instead to use funds from the Tarp (troubled asset relief programme) programme to recapitalise the banks.

The US administration has been under pressure to bring forward its plans for the bank rescue before the G20 summit takes place in London in April, and G20 finance ministers urged action by the US at their meeting in Horsham last week.

Over the weekend, administration officials dismissed fears that private investors would be reluctant to participate in the rescue plan because of the fall-out over the bonuses issues.

Austan Goolsbee, a member of the Council of Economic Advisors, said that such investors "would be treated totally differently than companies like AIG or Fannie Mae, where they are only in business because the government saved them".


Quite apart from my foregoing comments above, I can see how some sound but heavily "marked down" assets could now be bought by knowledgeable (insider) investors using these advantageous government (taxpayer financed) soft loans to acquire them.

This would constitute yet another form of plunder because the government would not benefit from assets that eventually return to profit and performance.

My God! And now for something unbelievable... - Peter Lemkin - 23-03-2009

Gee Dave, don't you believe in recycling? These criminals think they can cheat someone multiple times with the same toxic asset....amazing. Even more amazing is that I hear less than a deafening roar to put 'em all in prison on multiple charges (maybe that is why they wanted private prisons - they felt if they owned them, they'd not ever wind-up in them.....course they own the vast majority of the lawmakers and a good portion of the judiciary anyway).

I'd dub it Operation Phoenix

My God! And now for something unbelievable... - Magda Hassan - 24-03-2009

Well, the stock exchange has gone through the roof over this. They just looooove it! So, of course, it must be bad for people.

My God! And now for something unbelievable... - Peter Lemkin - 24-03-2009