Tuesday, March 24, 2009

Toxic legacies

I had to laugh when I read the title of Boy Wonder Geithner's latest economic measure: the Public-Private Investment Program for Legacy Assets. It could have been some sort of inheritance tax scam but no: "toxic" assets (those erstwhile weapons of mass financial destruction) have now been renamed "legacy" assets by the US Treasury, presumably to make the deal sound sweeter to prospective private investors. Any cash which private investors put up will be matched by the Treasury and the total amount will then be leveraged up to 6 times with federal loans or loan guarantees. If the assets are sold for a profit, everybody's happy. If the asset price falls further and the private investor cannot pay the interest on the loans, the taxpayer loses the most. I wonder if the scheme would pass Cameron's conscientious capitalism test.

3 Comments:

Blogger kinglear said...

This just might be the biggest steal in history.....

4:43 pm  
Anonymous Anonymous said...

Daniel Hannan sticking it to Gordon Brown in no uncertain terms...

http://www.youtube.com/watch?v=94lW6Y4tBXs#

5:59 pm  
Blogger Winchester whisperer said...

Yes KL, it could be - I expect Buffett et al are licking their lips.

Thank you for that link, Anon. What a shame Dan's in Brussels and not in Westminster!

8:48 am  

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