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Latest Toxic Asset Plan To Cost $1 Trillion

From an unfazed Associated Press:

Treasury’s toxic asset plan could cost $1 trillion


WASHINGTON – The Obama administration’s latest attempt to tackle the banking crisis and get loans flowing to families and businesses rely on a new government entity, the Public Investment Corp. to help purchase as much as $1 trillion in toxic assets on banks’ books.

The plan that Treasury Secretary Timothy Geithner intends to announce Monday aims to use the resources of the $700 billion bank bailout fund, the Federal Reserve and the Federal Deposit Insurance Corp.

The initiative will seek to entice private investors, including big hedge funds, to participate by offering billions of dollars in low-interest loans to finance the purchases and also sharing risks if the assets fall further in value…

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 toxic assets off, but it is just part of it and there will be more to come," she said…

Only a trillion?

They are surely low-balling the figure to give us a false sense of security.

The plan that Treasury Secretary Timothy Geithner intends to announce Monday aims to use the resources of the $700 billion bank bailout fund, the Federal Reserve and the Federal Deposit Insurance Corp.

We thought the FDIC was broke?

By the way, just as a point of comparison, our universe is currently estimated to only be 13 billion years old.

According to my calculations 1 trillion (1,000,000,000,000) divided by 13 billion (13,000,000,000) is 76.9.

So if you spent one dollar a year since literally the beginning of time, you would have to do it 77 times to reach 1 trillion dollars.

And that is just the price tag for this latest proposed government latest binge.

Thanks again, ACORN. Thank you, Democrat Party.

Your concern for the little guy is most touching.

This article was posted by Steve on Sunday, March 22nd, 2009. Comments are currently closed.

7 Responses to “Latest Toxic Asset Plan To Cost $1 Trillion”

  1. canary says:

    I guess they watered down the original news. Obama wants to take control of banks. Obama also said on the news that he was going to fix everything in his 4 years. The problems he was left with, and he is going to make sure the administration is not left with any problems. So, I guess the govt will buy America


    WASHINGTON – Struggling to contain the worst financial crisis in seven decades, the Obama administration wants to buy billions of dollars of toxic assets from banks to ease borrowing for consumers and businesses.

    Some industry officials familiar with the details said Saturday they expected the approach would try to remove as much as $1 trillion from banks’ books. An announcement from Treasury Secretary Timothy Geithner could come as early as Monday.

    According to administration and industry officials, the plan would rely on the Federal Reserve and the Federal Deposit Insurance Corp. to supplement the government’s $700 billion bailout fund. The officials, who spoke on condition of anonymity because the details have not been announced, said Geithner’s plan will have three major parts:

    _a public-private partnership to back private investors’ purchases of bad assets. The $700 billion bailout fund would provide the backing. The government would match private investors dollar for dollar and share any profits equally.

    The Term Asset-Backed Securities Loan Facility (TALF) program is getting up to $100 billion from the bailout fund; that money then is being leveraged to support up to $1 trillion in Fed loans. Under Geithner’s plan for the toxic assets, part of that $1 trillion would now go to support purchases of banks’ troubled assets.

    _using the FDIC, which guarantees bank deposits, to purchase toxic assets. Officials said the agency would create special investment partnerships and then lend them money to buy up troubled assets.

    Industry officials said the administration had not disclosed to them the exact amounts of money to be devoted to the effort.

    Geithner’s new plan is meant to attack what is widely viewed as the major failure of the bailout program so far: the inability to rid banks of a mountain of soured loans and troubled mortgage-backed securities.

    Some industry officials said that participation by the private sector may be harmed because potential investors will now be worried that the government will change the terms of the deal or impose new restrictions because of the current political backlash against Wall Street.

    Hedge funds and other big investors are likely to be more leery of accepting the government’s enticements to purchase these assets, fearing tighter government restraints in such areas as executive compensation.

    The effort to deal with toxic assets is the administration’s latest initiative to tackle the financial crisis.

    In addition to unveiling his plan for toxic assets, Geithner, who came under criticism for his handling of the AIG bonus issue, is expected to put forward next week the administration’s proposals to overhaul the government’s current financial regulatory structure.

    President Barack Obama said this past week that this plan will include a proposal to give the administration expanded authority to take control of major troubled institutions that are deemed too big to fail because their collapse would pose a risk to the entire financial system.

  2. proreason says:

    Some commentators are saying the “solution” is deliberately dumb so The Moron will have a good excuse to nationalize the banks.

    My question about that is……how can you tell when The Moron deliberately does something dumb?

    • canary says:

      well Pro, I’ve found more excerpts from his Dreams from my Father, admitting how he grew up lying. Then there are the lies in his book, experiences that didn’t happen, aren’t accurate, (think Bill Ayers ghost wrote the book) He’s been caught in alot of current lies. So, I don’t consider him dumb, I consider him a decieving, calculating, cunning, con-artist, who knows exactly what he’s doing. He does not care about anyone but himself.

  3. Rusty Shackleford says:

    All that was yours; All that you ever had or will ever have is now belong to me.

    “I won”

  4. pdsand says:

    I wholeheartedly hope that anyone who is being targeted by this plan stays the heck away from it, you see from the AIG case what happens when the government “helps” you. What is AIG stock trading at now, like 90 cents? And they are easily the most thoroughly bailed out company in America right now.
    I do think it’s getting to the point now where we can use the current economic crisis as a historical example of how to deal with the current economic crisis. We’ve been bailing out and intervening and regulating for almost a year now and have exactly nothing to show for it, not even a slight little glimmer of hope, aside from what the teleprompter tells Obama to talk about.

  5. Liberals Demise says:

    I’m now going to get VERY drunk and hurl big pieces for my government to pick through.

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