FinancialStability.gov: "Coming Soon"
That's the actual message at the Treasury Department's new website that will solve all our economic woes! Transparency! Accountability! Jocularity!
Lest we forget in yesterday's stroke-inducing excitement over one of the biggest legislative mistakes since at least last fall, Treasury Secretary and tax rebel Tim Geithner was busy unveiling—or was it unraveling?—his department's plans for the continuing nationalization of the country's financial sector.
Some details (though they really aren't that) from USA Today:
First, the Treasury Department would use part of the $350 billion remaining from last year's $700 billion financial rescue fund as seed money, to induce the private sector to buy bad assets from banks. The government will create a public-private entity that could buy $500 billion in toxic assets, and could be expanded to a trillion dollars. Treasury has not yet settled on a final design for the program.
The administration will use another $80 billion in financial rescue funds to expand a recently created $200 billion Federal Reserve program. That program, designed to free up money for student loans, credit cards and auto loans, could also cover bonds backed by commercial real estate and privately issued mortgage-backed securities. The new funding is designed to leverage as much as $1 trillion in overall activity under the Fed program….
Banks could receive more capital under the plan, which will be funded from the remaining $350 billion of last year's $700 billion financial rescue plan. Geithner said in order to get aid, banks would be subject to beefed up supervision or stress testing, especially big banks. Institutions that need additional capital will be able to access a new funding mechanism using money from the Treasury "as a bridge to private capital," Geithner said.
The renamed "Financial Stability Plan" rolled out by Geithner will also use at least $50 billion from last year's financial rescue law to help prevent home foreclosures. Details of that plan will be announced "in the next few weeks," Geithner said.
Like most sequels, TARP 2 clearly sucks. This isn't The Godfather Part II, it's Ghostbusters II.
Some more good news: In its first round of buying $350 billion in preferred shares of financial institutions, the government apparently overpaid by at least $78 billion. Your tax dollars (and your children's children's tax dollars) at work!
A laugh at bankers, courtesy of the Seinfeld episode in which Newman tries to get out of speeding ticket by having Kramer testify that he was suicidal after his dream of being a banker was crushed: