Ken’s Take: The foreclosure program didn’t slow foreclosures, the stimulus program hasn’t stimulated anything, and the toxic asset program hasn’t bought any toxic assets. Are these guys ever going to be held accountable for their free-spending and ineffective programs?
* * * * *
WSJ, “Wary Banks Hobble Toxic-Asset Plan”, June 29, 2009
The Obama administration’s plan to enable banks to dump troubled assets is facing troubles.
In March, Treasury Secretary Geithner announced a two-pronged plan to offer favorable government financing to entice investors to buy bad loans and toxic securities from banks.
But that initiative — called the Public-Private Investment Program, or PPIP — has lost momentum.
Big banks worried about having to sell at fire-sale prices while small banks feared they would be shut out.
Potential buyers balked at the risk of doing business with the government, concerned that politicians might demonize them for making big profits.
Early this month, the Federal Deposit Insurance Corp. essentially shelved one arm of PPIP — the government-financed buying of bad bank loans.
Mr. Geithner recently said the other part — to facilitate the buying from banks of troubled securities, many backed by real-estate loans — could be scaled back because investors are “reluctant to participate.” This week, the government is expected to name investment firms to manage this securities-buying portion
Full article with lots of detail:
http://online.wsj.com/article/SB124622976702566007.html#mod=testMod
* * * * *
