March 23rd, 2009
09:14 AM ET
6 years ago

CNNMoney.com: Treasury unveils long-awaited 'bad-asset' plan

The Treasury Department unveiled its long-awaited plan to remove many of the troubled assets from banks' books Monday.
The Treasury Department unveiled its long-awaited plan to remove many of the troubled assets from banks' books Monday.

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.

Could the toxic asset bailout backfire? CNN Radio's Bob Costantini takes a closer look.

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.

Full story


Filed under: Obama administration • TARP • Timothy Geithner
soundoff (48 Responses)
  1. Dutch/Bad Newz, VA

    Stocks are up 3.5%. I like the fact that the administration are implementing their policies at the beginning of the week so they can have a positive outcome on the markets. I don't think we've seen the economy botton out yet, but I think we're close to it. We're starting to see a bit of stabilization.

    March 23, 2009 10:47 am at 10:47 am |
  2. Sniffit

    @ paul, who said "No matter what any economist says this is a bad move."

    Sorry dude, but if Obama's response to the top economists around the country asking "why didn't you go forward with what we're advising?" was "Paul said so," then we'd clearly be in trouble.

    March 23, 2009 10:48 am at 10:48 am |
  3. edweena

    The DOW is now up more than 200 points! Can we say confidence???

    March 23, 2009 10:48 am at 10:48 am |
  4. ALLEN

    no matter what the pres. does or his admin., people are going to complain. first he wansn't doing anything to help the economy now that he he trying to do something people are still talking. people give him a chance and if it doesn't work vote him out in 4 years.

    March 23, 2009 10:49 am at 10:49 am |
  5. Sniffit

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

    So why report that it's $500B if it might be $75B and then recognition that it's not working? It's likely to work, but still...

    Controversy sells.

    March 23, 2009 10:51 am at 10:51 am |
  6. gerry

    Wallstreet just voted on the plan and stated very clearly it will do the job.

    Well done Secretary Geitner.

    March 23, 2009 10:52 am at 10:52 am |
  7. Dakota Kyle Evans

    If the moron Paulsen had done this at the outset, then we may have all been saved from the further deterioation of the banks. But he is the one that presented one plan to Congress and changed it in mid-stream so now, Geithner has to go back and try and reinstitute Paulsen's original plan.

    All the more reason repubs should not be in charge.

    March 23, 2009 10:52 am at 10:52 am |
  8. obama-mama

    Go go Geitner

    March 23, 2009 10:53 am at 10:53 am |
  9. eva, ca

    housing sales up 5.1%

    March 23, 2009 10:57 am at 10:57 am |
  10. Ray Chicago

    People , its only been 61 days. Give this administration a chance.

    March 23, 2009 10:58 am at 10:58 am |
  11. Jon

    We all realize that we're going to be paying this debt for generations to come. Just like the debt that Bush/Cheney racked up. The difference is, this administration is spending the money on fixing our infrastructure, our broken financial system, and future energy independence, while the previous administration racked up a huge debt funding wars in faraway countries and giving tax breaks to the very rich. It would be nice to have a government that could balance the budget, but if we're going to rack up a huge debt, Obama's plan is debt I can believe in.

    March 23, 2009 11:00 am at 11:00 am |
  12. Dutch/Bad Newz, VA

    DOW up 4%.

    March 23, 2009 11:03 am at 11:03 am |
  13. roy

    This guys an idiot, and he should go. He cant even pay his taxes right, and he has a problem with telling the truth like Obama and Dodd. Him and Dodd should resign now and Obama should put some one in there that the public has confidence in.

    March 23, 2009 11:03 am at 11:03 am |
  14. Virginia

    SPENDSPENDSPEND!! I have written my two DEMOCRATIC senators and REPUBLICAN congressman begging them to stop this mess. We have got to stop bailing out everyone. The govenment has their hands in too much of our financial woes by bailing everyone out. And us peons are suffering to the point where we will not be able to buy groceries to feed our families (some are not able to now–I know because we have a food pantry in our church that is continually low). Quit spending money, quit campaigning trying to explain why you are spending the money, and start MANAGING the money you have already spent!!!

    March 23, 2009 11:04 am at 11:04 am |
  15. David in Houston

    Well done!

    March 23, 2009 11:13 am at 11:13 am |
  16. southerncousin

    Is thiswhat was originally supposed to happen before the libs got hold of the checkbook and decided to spend a few trillion for ACORN and the unions?

    March 23, 2009 11:25 am at 11:25 am |
  17. Armando

    It will be a short term rally. Nothing to get overly excited about :) But more silver and gold.

    March 23, 2009 11:26 am at 11:26 am |
  18. Helen, NY

    Barack and this guy wants to print the bills and this way dollar value will go down. USA has become a third-world country. Now a days, Zimbabwe is printing bills. Is there any comparison? This is what our president wants.

    March 23, 2009 11:26 am at 11:26 am |
  19. GEE

    why are republicans afraid of timothy geithner didnt this mess start on republican policys trikle down the only thing is the jobs and money trikled overseas

    March 23, 2009 11:26 am at 11:26 am |
  20. Fair is Fair

    I really hate to rain on all your parades, but here's an example of what happens when the government prints money.

    I'm old enough to remember when gas was 25 cents a gallon. For arguement's sake, let's say that it's $2 a gallon now (accurate).

    Ending in 1964, U.S. coinage was made with 90% silver content. With silver at around $12 an ounce, there's approximately $2 worth of silver in one of these pre-1965 quarters.

    So you see, a gallon of gas costs the same now as it did before, IF you're using real (silver, gold) money. The difference between the silver quarter and the $2 now is inflation.

    What causes inflation? The biggest cause is printing money with nothing to back it up. This is called devaluation.

    I fear that we are in serious trouble going forward.

    March 23, 2009 11:26 am at 11:26 am |
  21. Uncle Sam

    I really enjoy reading all the idiotic comments from the armchair economists – Give Pres Obama & his administration a chance & stop echoing the repugs with whining – Let's wait about 6 mos at least to see how things go -

    March 23, 2009 11:28 am at 11:28 am |
  22. Wanda

    Paulsen was the one that should have been hanged for what he did – and the Bush administration for letting him -
    these Repub's are running scared-- taxes going up on them in 2010 -
    keep that in mind with all the bad-mouthing going on..........
    and Cheny loses all his defense contracts if the wars' end......................

    March 23, 2009 11:31 am at 11:31 am |
  23. Leslie

    The dollar is weakening against other currencies, inflation is on the rise. My sales tax here increase another 1%. You see people doing their groceries buying only necessities. Every stores I go to is only half full sometimes almost empty. People are losing their jobs or their hours are cut.

    March 23, 2009 11:32 am at 11:32 am |
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