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March 23, 2009

Geithner to Unveil Plan to Purchase $1 Trillion in Toxic Assets
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Treasury Secretary Timothy Geithner is preparing to unveil a plan today
to purchase as much as $1 trillion in troubled mortgages and other
assets from banks. The government is reaching out to hedge funds,
private equity firms and sovereign wealth funds to help buy the toxic
assets. The Obama administration has described the plan as a
public-private partnership, but most of the actual money will be put up
by the government. The New York Times reports the government will offer
low-interest loans to coax investors to form partnerships with the
government to buy toxic assets from banks. If the assets go up in value,
the hedge funds stand to benefit greatly, but if the assets fall,
taxpayers bear most of the risk. We’ll have more on the plan after
headlines.



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