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| US unveils new financial rescue plan |
| 2009-02-10 |
| US Treasury Secretary Timothy Geithner has unveiled a three-part program to stabilise the financial system including an initial fund of $US500 billion to absorb toxic assets. The US will also committ $US50 billion to prevent home mortgage foreclosures, the epicentre of global financial turmoil, under a financial stability plan unveiled overnight. Mr Geithner said the plan would "bring the full force of the US government to bear to strengthen our financial system so that we get the economy back on track". A key element will be a public-private investment fund started with $US500 billion "with the potential to expand up to $US1 trillion" to help cleanse the banking system of toxic real-estate assets. This will serve the role of an aggregator bank, or "bad bank" to help financial institutions value their mortgage securities and clean up their balance sheets. A second element will include additional capital injections into banks. "While banks will be encouraged to access private markets to raise any additional capital needed to establish this buffer, a financial institution that has undergone a comprehensive 'stress test' will have access to a Treasury-provided 'capital buffer' to help absorb losses and serve as a bridge to receiving increased private capital," the Treasury said. Thirdly, the Treasury and Federal Reserve will expand a program to boost lending for mortgages and other consumer and business loans to up to $US1 trillion. The US central bank, in coordination with a Treasury Department effort to steady the financial system, said it was preparing "a substantial expansion" of a program announced last year to get more credit flowing. The Fed would pump up the amount to $US1 trillion from the previously announced $US800 billion for its Term Asset-Backed Securities Loan Facility, which would accept mortgage-backed securities and securities backed by car loans, credit card loans, student loans, and some small business loans. The expansion "would be supported by the provision by the Treasury of additional funds from the Troubled Asset Relief Program", the Fed said. |
| Posted by:tipper |
| #5 Stocks logged their worst performance since a 5.3% loss on Jan. 20 as investors dumped stocks after Treasury Secretary Geithner failed to deliver the specifics Hmm. What happened on Jan 20? Bueller? Anyone? |
| Posted by: Nimble Spemble 2009-02-10 18:06 |
| #4 Geithner announced his plan and the market tanked. Way to go, Tim ... |
| Posted by: Steve White 2009-02-10 17:01 |
| #3 New Coke! |
| Posted by: Procopius2k 2009-02-10 17:00 |
| #2 A bit of irony here: The One visited Elkhart Indiana a blue-collar town of 53,000 that builds RVs ($55k to $600k range) for the wealthy and has seen its unemployment rate triple from 4.7 percent to more than 15 percent. If we can only get this diabolical wealthy people buying expensive RV's again, we'll be fine! For some reason, the rich bastards just won't SPEND!!! |
| Posted by: Besoeker 2009-02-10 14:23 |
| #1 This is not a plan. This is a commitment to throw money at banks, bad mortgages and whoever. |
| Posted by: DoDo 2009-02-10 14:05 |