Reply #4: Detox for Troubled Assets (Please, not this shit again!)

[ozymandius]

The government's plan to strip banks of troubled assets could force some firms to record large losses, but the painful purge would help restore confidence in the banking system, according to Sheila C. Bair, chairman of the Federal Deposit Insurance Corp.

....

Bair said yesterday that the effort might require more money than the $700 billion Congress has approved to aid the financial industry, but she added that taxpayers would probably reap an eventual profit on the asset purchases.

She said the greatest challenge was persuading banks and taxpayers to accept the necessity of the costly program.

The government plans to partner with private investors to buy troubled assets, in part by providing financing at low cost. Bair and other federal officials said discussions were ongoing about the appropriate extent of the federal subsidy. A larger government contribution would allow investors to pay higher prices, limiting the losses that banks would record but also exposing taxpayers to greater risk.

....

Bair calls the initiative an "aggregator bank," though Treasury officials contend that the partnerships should be called "public-private investment funds."

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/09/AR2009030902627.html

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So this is being marketed as a "get tough" approach in dealing with worthless bank assets. But it is a new sales pitch for the worthless Geithner plan. We've heard enough of this shit.