Obamateur To Private Investors: Hey, How About Buying These Stinky Sneakers?

Without preamble: U.S. Rounding Up Investors to Buy Bad Assets

Obama administration officials worked Sunday to persuade reluctant private investors to buy as much as $1 trillion in troubled mortgages and related assets from banks, with government help.

What a super idea! I bet you want to get in on this deal, don’t ya? What could be better then buying assets that are virtually worthless, will probably never go up in value, and include mortgages that could easily end in default. Makes investing in carbon offsets sound like a good deal. At least one would get some trees out of the deal in a few years.

The talks came a day before the Treasury secretary, Timothy F. Geithner, planned to unveil the details of the administration’s long-awaited plan to purchase troubled assets, meant to remove them from the balance sheets of banks and, in turn, spur banks to lend more money to consumers and companies.

Yes, long awaited. I seriously hope Timmay Geithner has much better ideas then this.

The plan relies on private investors to team up with the government to relieve banks of assets tied to loans and mortgage-linked securities of unknown value. There have been virtually no buyers of these assets because of their uncertain risk.

You don’t say. I’m shocked, shocked, I tell you.

So, it seems that part of Timmay’s plan is to shift worthless assets and mortgages that people will probably default on from banks to private investors, which is is like moving those stinky running shoes from your closet to the spare room. So far, the Grey Lady can only find two private firms that planned to participate. Some others showed interest, but were concerned about the administration and Congress would regulate them. And you know the executive pay cap is on their minds. But, hey, they should not worry so much about holding on to these assets

Three chiefs of investment firms said in interviews that they were impressed with the terms of the program — which would have the government lend nearly 95 percent of the money for any investment — but remained reluctant to participate because of the potential for future regulation.

So, to wrap it all up, we have a massive shell game with government using tax payer money to the tune of $900 billion or more.

Crossed at Pirate’s Cove 

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