toxic assets

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Obama 'Dithering' on Bank Rescue: Krugman
Obama 'Dithering' on Bank Rescue: Krugman
OPINION
Mar 6, 2009 9:23 AM CST

Obama 'Dithering' on Bank Rescue: Krugman

Toxic asset plans just aren't going to work

(Newser) - Barack Obama has repeatedly said that bold action is needed to save the financial system, and he’s probably right, writes Paul Krugman in the New York Times. So it’s a shame he isn’t taking any. “The reality is that when it comes to dealing with the...

Investment Funds May Replace 'Bad Bank'

Administration eyes creation of private funds to suck up toxic debt

(Newser) - The Obama administration is considering creating multiple investment funds to buy up the toxic debts at the heart of the financial crisis, insiders tell the Wall Street Journal. No fixed structure has been agreed upon, but under one leading plan the funds would be administered by private investment managers who...

Fed Bailout Spawns More 'Zombie' Banks

Fed lifelines preserve banks that, frankly, are better off dead

(Newser) - The Federal Reserve’s aggressive lending to banks has helped avert financial collapse, but it may have created some monsters as well, the Wall Street Journal reports. A research paper from the University of Chicago suggests that while federal aid has succeeded some in thawing frozen credit markets, it has...

Finance Geeks Behind Crisis Hard at Work on a Fix

The inventors of the CDO turn their math minds to better valuations of assets

(Newser) - The finance-desk math wizards who created the securities behind the market meltdown are now betting they can think their way out of the mess, the Wall Street Journal reports, working to design new systems for pricing bad assets fairly so governments can buy them off of banks’ balance sheets. “...

Last-Minute Switch Doomed Geithner Speech
Last-Minute Switch Doomed Geithner Speech
ANALYSIS
Feb 17, 2009 9:47 AM CST

Last-Minute Switch Doomed Geithner Speech

Old plan went bad, new one wasn't ready; he had to stay vague

(Newser) - Treasury Secretary Tim Geithner was supposed to ride in on a white steed and save our financial system—only as he made his charge, the would-be knight got thrown from his horse and landed with a thud. Now the Washington Post reports that Geithner changed course only days before rolling...

America's Biggest Banks Are Zombies
America's Biggest Banks Are Zombies
ANALYSIS
Feb 13, 2009 8:30 AM CST

America's Biggest Banks Are Zombies

Many are already insolvent, and feds will need a bolder plan

(Newser) - In the corridors of Wall Street and Washington, a worrying consensus is growing: Some of the nation's largest banks are in fact insolvent. If banks reassessed the value of the complex mortgage-backed securities that taint their balance sheets, they would outweigh all assets on hand, writes Steve Lohr of the...

New Bailout Plan Hinges on Private Investors

Treasury will set 'floor price' on distressed assets to lure buyers

(Newser) - The Treasury's latest plan to rescue the banking industry relies heavily on private-sector investors, the New York Times reports. The government will guarantee a floor price on the toxic assets weighing down banks’ balance sheets, encouraging hedge funds, private equity groups, and even insurers to buy them. The plan should...

Team Obama Mulls 2-Part Bank Bailout

Plan would have feds buy up some toxic assets, insure others

(Newser) - The bank stabilization plan the White House is cooking up may mix two competing strategies, the Wall Street Journal reports, setting up a “bad bank” to buy portions of banks’ toxic assets while offering guarantees against future losses on part of the remainder. The goal is to bolster banks...

No Silver Bullet for Crises Like These: Pearlstein

Complex financial system requires complicated fixes ... and lots of patience

(Newser) - With various factions blaming a single factor—and pushing a single solution—for the financial crisis, Steven Pearlstein of the Washington Post cautions that there won’t be a silver bullet. Reducing foreclosures, removing toxic assets, and nationalizing banks will all come into play; meantime, we must “resist the...

Sweden's Advice on US Banks: Be Wise, Nationalize

Taxpayers eventually benefited from early '90s move to recapitalize busted system

(Newser) - One option to save US banks: follow Sweden’s lead and nationalize them. Sweden’s banks were essentially bankrupt in the early 1990s, but a center-right government took them over, and taxpayers ultimately reaped the benefits, the New York Times reports. Troubled assets were isolated into a single “bad...

Create a Good 'Bad Bank' to Ease Crisis
Create a Good
'Bad Bank' to
Ease Crisis
OPINION
Jan 22, 2009 8:44 AM CST

Create a Good 'Bad Bank' to Ease Crisis

Institutions must write down toxic assets to ease larger woes

(Newser) - The world’s banking crisis is entering its endgame, and it’s time to shore up the most troubled institutions using a strategy that worked in Sweden in the 1990s, writes David Roche in the Wall Street Journal. It won't be easy, he warns: "A good bad bank...

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