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Politics : Politics for Pros- moderated

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To: LindyBill who wrote (297864)	3/24/2009 11:07:05 AM
From: Brumar89	Read Replies (1) of 793834

That is what we were told TARP was going to be used for before it was approved. dusted off and tweaked Hank Paulson's old plan for handling troubled assets. Paulson wanted to isolate the bad bank debts, box them up, and market them for whatever they would bring. Geithner wants to try a variation of this: Banks put up their toxic legacy assets, and, with FDIC help and federal dollars, repackage these assets for resale. Instead TARP has been used to inject cash into banks and insurance companies like AIG and thats pretty much what the RFC did: what Presidents Hoover and Roosevelt tried in the 1930s with the Reconstruction Finance Corporation (RFC). In the 1930s, the RFC officials made direct loans to troubled banks Except that this time, the govt's aid was structured as an investment (stockholding) i/o loans.

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