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.
From CNN Politics
© 2012 Cable News Network. Turner Broadcasting System, Inc. All Rights Reserved.
| Advertising practices | Advertise with us | About us | Work for us | Help
Stocks should rally big due to this news.
Remember "trickle-down" economics? It was a lie. Nonetheless, here we go again.
Buy low---sell low--–that is what we long awaited for? Right?
Is this the most insane thing :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.
$75 billion to $100 billion to kickstart things ????? WOW !!!!
What a joke. This whole administration is a joke. The people who voted them in are a joke.
WHO IS GOING TO PAY FOR THIS?!!! Oh, I am. And my mom, and my brothers, my sister, my nephews and my neice. My neighbors, my co-workers, people I don't know and the rest of the United States.
BUT why?! I have debt but Pres Obama is buying up my TOXIC debt and making it easier to pay the debt back.
THIS IS FOOLISH. No matter what any economist says this is a bad move. The government better have many SOUND restrictions and conditions in this bill. I am sick of hearing good money thrown after bad!
"It take a village to raise a child" this country is our child now, let work to help raise it to the top unce again.
$500 billion here, $3.7 trillion there, bankruptcy around the corner.
That's change you can believe in.
The secret of a leader lies in the tests he has faced over the whole course of his life and the habit of action he develops in meeting those tests.
This is obama's first test and he has no experience or habits to fall back upon.
Yeah I bought a lot of Citigroup stocks. I am deighted.
the only rich people in the US are the politicans. If you added up Obamatotus's salary and benefits, it would amount to millions a year. Now that he is ruining free enterprise, where do you idiots think all the tax money will come from? 90% came from the so-called "rich". so did your well-paying jobs.
Yes! Spend more of my un-born children's money!!!
Woo Hoo ! now the banking executives can get their bonuses.
@ Dutch,
Yup. Short-term, though. The printing of this fiat money is going to come back to haunt us. You should know that.
It interesting to see all the griping and complaining about this plan and that plan... if you feel so strongly about it, call your congress person or better yet come up with your own plan. Obama was voted into office because the people wanted something different; he's been there about two months... give the man a chance before you disregard everything he is trying to do. I don't think anyone can honestly say that what his administration is doing is with out a doubt going to fail.... everyone is speculating, we'll see the truth in the months to come. Be patient America!
Good move, hopefully this starts solidify investor confidence....!!!!!!!!!!
In Geithner we trust....the guy that couldn't figure out his taxes. Guess we just have to hope for the best but this guy doesn't make me too confident.
WHy wasn't this done from the start? Seems like a round about way to get where we needed to be. Not to mention a must more costlier one.
Fire up the presses and print More Money. Our inflation rate will go through the roof.
responding to the post by paul "no matter what economists say"? this is why we needed a fresh start after the previous administration,,,a group that gave us a horse breeder running fema,a chief medical officer who thought people should pray for health,an energy policy from only oil people,a military policy run by a guy with 6 deferments and one who's daddy got him out of any dangerous service,a secretary of state who was sent to the u.n. to give what the admin knew was bogus data,,,,and now we should listen to people other than economists to run the economy?,,,no wonder this country is so messed up
@ Marcus....... Excellent comment! I agree completely!
Federal Reserve Chairman Ben Bernake's statement to America on "60 Minutes" on Sunday, March 15th, mentioned that ONE of the FIRST SIGNS of RECOVERY is that the banks will start lending and they will have new investors investing in them!
MOST Americans complaining in these blogs do not have a clue about the CAUSE of the Banking Sector Collapse! Its much more intricate than the average person can understand.
I was at church talking to a fellow parishioner and he was starting to blame President Obama...... I said, stop........ Obama's been in Office ....TWO MONTHS! He INHERITED THE BUSH DISASTER!
Long awaited? This administration has barely been in office two months.
Where was the outrage more than 3 years ago before this pile of crap blew up, when Congress was talking about all these exotic loans?
The answer? Just like now, the banks own this country as evidenced by the using our money to bail them out of from their criminal acts. There are no laws against what they did because they OWN THE LEGISLATORS WHO WRITE THE GD LAWS!!!
They hurt all of us. I work in sales and their criminal acts have caused my income to go down which has affected my ability to pay my mortgage of 15 years, which is a conventional one.
Where is MY bailout? WHERE IS MY BONUS?
Stocks are gonna Soar!!!
Stocks have alreay rallied based upon the announcement. And for those complaining about running up your grandchildren's debt....what do you think has been going on for the past 8 years? Those unborn tots have been in debt for years!
Mari.... STOP. Obama inherited the Pelosi-Reid-Frank-Dodd disaster.
It bears mentioning that this was the original plan sold to Congress for TARP I. It sounded like a good idea then but Paulson decided once he got the money to completely change course. It seems like it'll work and I have high hopes. Has anyone seen the stocks this morning?