Wednesday, March 25, 2009

Obama

http://www.ft.com/cms/s/0/7e0a2e32-17a7-11de-8c9d-0000779fd2ac,dwp_uuid=a4559040-e7c3-11dd-b2a5-0000779fd2ac.html

In this article, it also talks about money, and all the politician say great things about the decision. Criticism came from economists such as Paul Krugman, the New York Times columnist, who said the non-recourse government loans would allow private partners to make large profits if their bets went well, while leaving taxpayers with the overwhelming share of losses if the bets went badly wrong. Political analysts said the embattled Mr. Geithner had regained some control of the economic debate, which had been dominated by rage over bonuses at AIG, the crippled insurance group. There will be two new schemes – one for the legacy securities and one for whole loans, both of which will focus on real estate-related credits. Under the legacy securities plan, the government will authorize up to five investment managers to raise equity and provide a dollar of equity and between one and two dollars of debt for every private dollar raised. And Mr. Geithner's bank plans was that Under the legacy loans plan, the government will provide matching equity while the FDIC will guarantee up to $12 in loans for every dollar of private equity at risk. Banks will submit pools of loans for auction. Banks said the plan’s structure was likable to them as it gave them the last word on whether to sell their toxic assets.Additional reporting by Sarah O’Connor

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