Word: plan
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Geithner left his whipping boy costume in the closet when he presented the specifics of his plan to get the private sector to participate in buying toxic assets. The financial world was focused on the reaction to his speech and, before he had even given it, the markets began a furious rally. Once he stepped away from the microphones, the buying of equities accelerated. (See pictures of the Top 10 scared traders...
Geithner's success in convincing the world that hedge funds would use government money to buy bank paper of questionable value was all the more extraordinary because so few experts believe that the plan has any chance of working. It may be that the markets have been through such a long cycle of hopelessness that they are ready to grasp at any straw...
Read "Geithner's Bank Plan: Only a Partial Solution...
...purpose of Emergency Economic Stabilization Act, known as the bailout plan, was to restore stability and liquidity to the U.S. financial system. The TARP, one of the Act's driving initiatives, was intended to be a mechanism for financial institutions to offload toxic assets, in general, heavily leveraged ABS securitized by banks and held on their books. An ABS is considered a toxic asset when the value of the ABS is less than the original investment. The toxic asset has a negative impact on the bank's balance sheet which, when multiplied, reduces the banks ability to lend...
...premiums for people with coverage. "Taxing health-insurance benefits would encourage the young and healthy to opt out of [risk] pools," says author Elise Gould, EPI's director of health-care-policy research. "Upon their exit, premiums would likely rise for those remaining." (Read about what your health-care plan won't cover...