U.S. close to announcing bank rescue plan: report

[ProSense]

U.S. close to announcing bank rescue plan: report

NEW YORK (Reuters) – The U.S. government will announce as soon as Monday a long-awaited plan to try to get bad assets off the books of banks, a cornerstone of its efforts to tackle the credit crisis, The Wall Street Journal reported.

The Obama administration, battling a deepening recession, is set to adopt a three-pronged approach to ridding the financial system of so-called toxic assets, the newspaper said on its website on Friday.

The plan would create an entity, backed by the Federal Deposit Insurance Corp, a U.S. banking regulator, to buy and hold loans and would expand a Federal Reserve facility to buy asset-backed securities that are weighing on banks, it said.

The government will also carry out plans, outlined last month, to purchase mortgage-backed and other securities via public and privately financed funds that would be run by private investment managers, the report said.

The Treasury Department and Federal Reserve declined to comment on the report.

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[msongs]

1. it should be called "the screw honest Americans act" nt

[ProSense]

3. Do you have the details? n/t

[karynnj]

8. No - but they all seem to know that Obama/Geitner are not going to do anything good

Seriously, I don't know why people don't wait to hear the plan before starting with the negative comments. I think the plan is overdue and just by existing will make things a bit better - as uncertainty is horrible. The biggest news is that the long awaited plan is soon going to be laid out.

It will be good to know the truth of the banks' health and the administration's plans for dealing with various groups of banks. This is the path out of the mess. We know that the mess is bad - but not how bad and I don't think many are still in denial on the problems.

[Thrill]

10. For some no plan is good unless the Great Paul Krugman blesses it

[babylonsister]

6. Why? You hit-and-run poster, explain. Or don't.

Your credibility about anything isn't there.

[ProSense]

7. It's part of the

phenomenon.

[Occam Bandage]

9. Any reason in particular?

Or did the word "bank" cause a Pavlovian reaction?

[firedupdem]

11. We've already been screwed. This is the clean up. n/t

[bluestateguy]

2. I would do it on Friday after the markets close

no telling how those Wall Street casino workers will react.

[Eric J in MN]

4. Will the government give cash for trash?

Or will the government tell rich people: buy the trash and if it isn't valuable in a couple of years, then we'll give you cash?

[ProSense]

5. Whatever they do, it will be the worst thing ever. n/t

[amandabeech]

13. PBS's "Nightly Business Report" had a story on the treasury plan and

TALF Federal Reserve plan.

I'm beat, so I know that I can't remember it all, but

1. the funds, including hedge funds, would only lose as much as they put in, with the Treasury or Fed taking the unlimited downside risk.

2. the fed or treasury would guarantee half the bonds, so that the private risk would be halved.

The presenter said that the U.S. would earn only 1-2.5%, but the private folks would earn 30-40%, IIRC.

That's not much of a return for the taxpayer, but a lot for private funds.

Anyone, please correct me where I have it wrong.

[Mojorabbit]

14. The imprression I get from what I have read

so far pretty much is as you say. Get them to buy it and if it loses value tax payers will guarantee against the loss. It sucks. I think things are a whole lot worse than they are telling the public or else they would not make this kind of deal.

[firedupdem]

12. Just listening to the President explain this mess last night was enough

to make my head spin. There will be no easy fix. I'm comfortable with the people working on it.

[Aloha Spirit]

15. I hope it's not more than three pages... some congresspeople might not be able to read it through

otherwise.
Yes! I mean you, McCain.