Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.
BAILOUT 2.0….I’ve been avoiding comment on Tim Geithner’s new bank bailout program because the rumors of what’s in it have been changing on practically an hourly basis. So why not just wait and see what he announces? Today he did, and here’s the New York Times summary of his four point program:
- A new program, jointly run by the Treasury and the Federal Reserve, with financing from private investors, to buy up hard-to-sell assets that have bogged down banks and financial institutions for the past year. The program, often described as a “bad bank,” is expected to spend $250 billion to $500 billion.
- Direct capital injections into banks, which would come out of the remaining $350 billion in the Treasury’s rescue program.
- A vast expansion of lending program that the Treasury and Federal Reserve had already announced, which is aimed at financing consumer loans. The two agencies had originally announced their intention to finance as much as $200 billion in loans for student loans, car loans and credit card debt. Instead the program will be expanded to as much as $1 trillion.
- A separate $50 billion initiative to enable millions of homeowners facing imminent foreclosure to renegotiate the terms of their mortgages is to be announced next week.
I’m not sure the “bad bank” is really a bad bank, but I guess that depends on the details of how it’s going to work. More later.
