Word: toxicants
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Dates: during 2000-2009
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...With all the political theater and populist grandstanding, though, the bigger issue has been obscured. And that is, Just what is AIG doing with the $170 billion? Does the company's strategy, which is to wind down its exposure to toxic assets and sell some of its profitable insurance divisions to help pay off the government debt, stand a good chance of succeeding? And if it does, will the world avert financial Armageddon...
...like other institutions, was making a mint dealing in derivatives tied to the U.S. real estate market. The boom was financed in part by collateralized debt obligations (CDOs), securities based on subprime mortgages that have come to define toxic asset. Companies that held CDOs could offset their risk by buying CDSs from AIG FP. Or they could simply speculate with the instrument. It all worked fine until overbuilding by housing firms and overleveraging by consumers caused the bubble to burst. Which in turn caused the value of CDOs to plunge. Which caused holders of CDSs on such securities to demand...
...financial-system booster last fall and the $878 billion stimulus package this winter, convincing Americans that their money isn't being wasted is no easy task. Geithner has said the government may put up as much as $1 trillion in loans and guarantees to subsidize the sale of the toxic assets to private investors. Though the government could get back the money if the assets start trading again, many Americans see it going down a sinkhole. Says Democratic pollster Mark Mellman: "There's a narrative out there in the public mind that the government's bailing out banks" - in other...
...perception is proving hard to tackle, the reality is even harder: so far few private investors have shown any interest in tapping the trillion-dollar subsidy to buy toxic assets from the banks. Hedge funds and other players all want to know the terms of the sale before they even think about stepping up to the plate. So far, Geithner and Treasury have provided little detail. "The question of how to price the asset is still on the table, unresolved," says Scott Talbott, a top lobbyist for the Financial Services Roundtable, an industry association...
...been fixed. And who gets to keep the profit, if there is any? Does Uncle Sam let the private player keep it all, or does the government get some? How and when does the private player have to repay the government loan? And what if the toxic asset stays worthless - does the private buyer lose his money first, or does the government...