Thursday, February 26, 2009

Government financing and guarantees for illiquid mortgage-backed junk

It's Time to Break up the Big Banks

Timothy Geithner is putting the finishing touches on a plan that will dump $1 trillion of toxic assets onto the US taxpayer. The plan, which goes by the opaque moniker the "Public-Private Investment Fund" (PPIF), is designed to provide lavish incentives to hedge funds and private equity firms to purchase bad assets from failing banks. It is a sweetheart deal that provides government financing and guarantees for illiquid mortgage-backed junk for which there is currently no active market. What's got Geithner worried, is the fear that the public will see through this latest boondoggle and set off a political firestorm. If that happens, the markets will go into a swan-dive and Geithner's career at Treasury will come to an abrubt end. ~~~~~ meanwhile Darling does a weasel.

Posted by troy @ 10:44 AM (918 views)
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3 thoughts on “Government financing and guarantees for illiquid mortgage-backed junk

  • An interesting post Troy.

    Here is the President (not) speaking on the issues raised by Information Clearing House.

    The stitch up of American taxpayers appears to be proceeding smoothly to me.

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  • There does seem to be clear parallels to our own £320Bn (proposed?) asset insurance scheme

    yes, ‘we the people’ are an insurance company apparently!

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