Word: solding
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...those moving off banks' books. But what of the bundled, securitized assets? According to the FDIC, the total value of securities on banks' books as of Dec. 31 was $1.7 trillion. How much of those securities are toxic and how does the Geithner plan move them to be sold...
That leaves the commercial mortgage-backed securities and other asset-backed securities that were once AAA-rated but have since been downgraded. Those toxic assets will be sold, Treasury hopes, by at least five still untested public-private investment funds that will be created through open bidding among investment banks. Those assets, according to TIME's calculations, amount to about $37 billion on banks' books...
...Asset backed securities ("ABS") gave banks the opportunity to bundle loans into a pool that could then be sold to other banks. The bank purchasing the loans would then hold them as an investment or resell them in the secondary market. This market improved the ability of banks to lend by transferring the risk of the loan default to a third party while providing financing to the bank to make new loans. In time, the public grew accustomed to the increased availability of credit. (See pictures of the printing of money...
...because they are the last tranche to be paid. In order to compensate for the increased risk, the more junior the tranche is, the higher the yield on the investment. Employing this system, loans that individually had varying credit ratings were bundled and tranches were created that were then sold in the secondary market...
...rules should ease financial pressures and make races much closer. From this season the cost of engines sold to independent teams will be slashed by half and in-season car-testing has been banned. Further changes are set for 2010; proposals set out this month by the FIA, world motor sport's governing body, would see teams handed greater technical freedom in exchange for limiting their budgets to just $44 million. Spend more and teams would face tighter technical restrictions...