This Had Better Work

My Plan for Bad Bank Assets

Today, we are announcing another critical piece of our plan to increase the flow of credit and expand liquidity. Our new Public-Private Investment Program will set up funds to provide a market for the legacy loans and securities that currently burden the financial system.

The Public-Private Investment Program will purchase real-estate related loans from banks and securities from the broader markets. Banks will have the ability to sell pools of loans to dedicated funds, and investors will compete to have the ability to participate in those funds and take advantage of the financing provided by the government.

The funds established under this program will have three essential design features. First, they will use government resources in the form of capital from the Treasury, and financing from the FDIC and Federal Reserve, to mobilize capital from private investors. Second, the Public-Private Investment Program will ensure that private-sector participants share the risks alongside the taxpayer, and that the taxpayer shares in the profits from these investments. These funds will be open to investors of all types, such as pension funds, so that a broad range of Americans can participate.

Third, private-sector purchasers will establish the value of the loans and securities purchased under the program, which will protect the government from overpaying for these assets.

The new Public-Private Investment Program will initially provide financing for $500 billion with the potential to expand up to $1 trillion over time, which is a substantial share of real-estate related assets originated before the recession that are now clogging our financial system. Over time, by providing a market for these assets that does not now exist, this program will help improve asset values, increase lending capacity by banks, and reduce uncertainty about the scale of losses on bank balance sheets. The ability to sell assets to this fund will make it easier for banks to raise private capital, which will accelerate their ability to replace the capital investments provided by the Treasury.

This program to address legacy loans and securities is part of an overall strategy to resolve the crisis as quickly and effectively as possible at least cost to the taxpayer. The Public-Private Investment Program is better for the taxpayer than having the government alone directly purchase the assets from banks that are still operating and assume a larger share of the losses. Our approach shares risk with the private sector, efficiently leverages taxpayer dollars, and deploys private-sector competition to determine market prices for currently illiquid assets. Simply hoping for banks to work these assets off over time risks prolonging the crisis in a repeat of the Japanese experience.

See also:
Geithner Banks on Private Cash
White House Defends Plan for Toxic Assets
Treasury’s toxic asset plan could cost $1 trillion
Treasury expected to unveil new entity to help buy toxic assets
A Plan To Purge Banks’ Toxic Assets
AIG fallout could trip up toxic-asset sales
Banker fury over tax ‘witch-hunt’
Pandit’s Memo to Citigroup Employees
Bank CEOs Push Back on Legislation That Would Tax Bonuses
Citigroup, Bank of America, JPMorgan criticize proposals to tax bonuses
Citi CEO says bonus tax could hurt financial firms
Citi’s Pandit warns of ‘setback’ if bonus tax passes
U.S. Department of the Treasury
Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation

Gee, now they want the help of private equity? That might be a tough sell after last week’s shameful, sordid infantile tantrum, where everyone in the government from Obama to Barney Frank was hypocritically kicking “greedy” Wall Street executives in the groin and passing retroactive laws to take away money they’ve already legally earned. Why should they cooperate when Washington can turn on them on a whim and change the rules at the drop of a hat?

In any case, I hope the Public-Private Investment Program works. It’s a vital step on the path out of this recession.

/keep your fingers crossed and stay tuned

Olly Olly Oxen Free

Come out, come out wherever you are! If you’re in this country illegally you can relax, because we’ve pretty much given up enforcing our immigration laws. The Speaker of the U.S. House of Representatives recently declared that enforcing out immigration laws is un-American.

Pelosi Calls Immigration Laws and Enforcement Un-American

In the midst of a recent diatribe, US House of Representatives Speaker Nancy Pelosi told a crowd of illegal aliens and their advocates that federal or local law enforcement of existing immigration laws is “un-American.”

Pelosi, an avowed liberal-left Democrat from San Francisco, condemned operations by Immigration and Customs Enforcement agents. Then she called the illegal aliens in the audience she was addressing “very, very patriotic.”

“Who in this country would not want to change a policy of kicking in doors in the middle of the night and sending a parent away from their families?” Pelosi said to a mostly Hispanic gathering at St. Anthony’s Church in San Francisco.

Unbeknownst to Pelosi, her speech was being taperecorded and the audiotape was played by syndicated talk show host Mark Levin on Wednesday night and Fox News Channel on Thursday morning.

Speaker Pelosi is then heard saying, “It must be stopped….What value system is that? I think it’s un-American. I think it’s un-American.”

Pelosi told the few reporters covering this story that she was invited to speak to the Latino congregation by Rep. Luis Gutierrez (D-IL) as part of a national tour called United Families, which he says is “intended to put a human face on the immigration debate.”

Congressman Gutierrez, who in the past called ICE agents and Border Patrol agents “Gestpo” is currently collecting signatures for a petition that demands President Barack Obama to “stop the immigration raids and deportations that are tearing our marriages, families and children apart.”

He told reporters that he’s expected to present those petitions when Hispanic members of Congress meet with the President next Wednesday.

Referring to work site enforcement actions by ICE agents, Pelosi said, “We have to have a change in policy and practice and again … I can’t say enough, the raids must end. The raids must end.

“You are special people. You’re here on a Saturday night to take responsibility for our country’s future. That makes you very, very patriotic,” she’s quoted as saying during her church speech.

See also:
Pelosi Tells Illegal Immigrants That Work Site Raids are Un-American
Feds Attack Local Communities for Enforcing Immigration Laws
L.A. mayor chides ICE for workplace immigration raids
Revisions could prompt Arpaio’s ICE-program exit
Napolitano orders review of WA raid
Study shows wages rose after immigration raids
Study: Immigration Raids Lead to Better Wages
Report says raids at Swift plants help increase wages
US Immigration and Customs Enforcement

So, why are Democrats so hell bent on not enforcing our immigration laws?

/for the same reason they vehemntly oppose any voter ID laws, every illegal is a potential illegal Democrat vote