vaughn

The Geithner Plan FAQ

The leverage on the private public partnership is less than 6 times ( total capital will be 18% with 82% financing coming from debt guaranteed by FDIC and bought by private investors, such as pension funds or bond funds)


On Mar 22 03:07 PM SilentP wrote:

> The creation of the now toxic assets required massive amounts of
> credit to be available. Without credit, there is simply not enough
> cash out there to purchase these assets outright. The Treasury is
> simply restoring 30-1 leverage ($30B * 33 = $1T) to soak up some
> of the supply.
>
> Add to that a deteriorating economy where no one knows where (or
> when) the floor on housing prices and consumer credit will be, it
> is not hard to see why investors don't want to jump in with cash
> to buy those assets.
>
> "However, I still don't understand why private capital hasn't already
> bought these undervalued assets to make these profits?"