Tim Geithner's Toxic-Asset Plan: 8 Things You Need to Know

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Now let's say, that Bernanke decides that he doesn't want to impose RENTAL AGREEEMENTS on the banks...(His alleged twin brother Mark Levin 'the great one' definitely would) and decides this "One coin" idea is a good thing, and gets his lobbyists to impose this supposed tax on the Fed,m just so he can cough up the toxic asset to the US TREASURY, and write it off on his books...
now what happens when these banks come back to the Fed, and say "Hey where's my tox-* (uhhh..., I mean) 'distressed' asset, You were supposed to hold it for me, and you went and used it to pay this tax...You can't take the whole expense as a deduction...WE WANT OUR CUT OF THAT TOO!!"
Now what do you do if your Poor Ben, with all these guys wanting their cut?
Well, you're the Central Bank Chairman, right? You DO run a BANK, right? Now these guys want something YOU GOT, right? Now this supposed expense writeoff for tax purposes is AN ASSET THEY WANT...
and if you're a bank, what's the simple thing to do?
YOU LOAN IT TO THEM....AT, oh... 10% intrest?
10% is such a small price to pay for a deduction credit, isn't it? ;-P
One way or another...THIS GOVERNMENT and THIS BANK is going to RID these TOXIC ASSETS and THE NATIONAL DEBT, in spite of them selves....If we just keep holding their feet to the fire, and more importantly...START MAKING THEM THINK!

Kapt. Blasto of KY 12:42AM August 20, 2009

Somebody asked me outside here THIS following question: What happens if the "toxic asset" now being held at the FED, is NOT completely owned by the FED on thier books...that is to say, the BANKS are still retaining some form of control/ownership over those "toxic assets", thereby making the FED unable to pay the "special tax" that Congress could impose on FED to take the "toxic asset" away.
OK...Let's use the following analogy...Let's say Aunt Mahtilda wants to send "junior" off to live at your house, so aunt Mahtilda Can get some (ahem)...'things' done... for the summer while "Junior" isn't there with her. Both you AND aunt Mahtilda know Junior is a Lazy sonuva...and takes space on the couch and eats three times his weight in food, AND DOES NOTHING EXCEPT EAT, fouls up the bathroom while using it, and hogs your couch and plays video games...causing your household to sink, just like Aunt Mahtilda's before she palmed the little bastard off to you...Now you're stuck...Whadya do?
Well, over at my Job, a Warehouse of Parts, suppliers need their parts to move to their cusotmers while we play middleman, taking them in, storing them, and shipping them when our cusotmers need them. It's a low movement turnover there, and spaces are precious! So what we do is a little thing we like to call R-E-N-T ! Half the parts that are on our shelves, We don't own, and they're taking up space...SPACE AND TIME MEAN MONEY TO US! so..We charge our suppliers RENT for the space that part sits there....We make some good money over rental revenue.
SO that is what the FED must do...CHARGE RENT TO THE BANKS! 10% of the face value for each Toxic Asset per month (or whatever period)PLUS 10% of the apparent value NOW unitl it moves!
The whole idea is for the BANKS to relenquish total control over the "toxic asset" to the FED..so that we can get them off the Bank's books completely. And the FED's too.

Kapt. Blasto of KY 11:57AM August 19, 2009

Now, you're saying in you're article that these "TOXIC ASSETS" (at least in their physical paper component) are the "bad bets" that Banks want to get rid of off their books, and can't do it.
Basically, these are clogging the pipes, right?
Look at this in terms of a highway, THERE's NO SYSTEM TO CLEAN THE HIGHWAY UP! the Highway as a system, is OK, it's just missing a good cleanup system. And if these "toxic Assets" weren't toxic...then they would have been collected upon, and Government would have collected their taxes off it, right?
OK...Here's a GREAT SOLUTION! And basically what this solution does is to take those "toxic assets off the Private Side's Books, and for Government to get rid of its debt, without hyperinflation, without vainly cutting programs to fight "waste/fraud/abuse" bassackwardly, or shoving the cost onto future generations.
Allow all toxic assets collected on banks books to filter their way to the last point on the economic cycle for all US financial instruments...The Federal Reserve...A Necessary and proper institution as its main objective is to keep Governments, Corps, and Individuals from manipulating the Money, by treating them all the same...borrowers. One of the Fed's functions is to accept deposits, ranging in the form of Checks, money, and PROMISSORY NOTES as face value instuments, as WELL AS COINS! But just like any other CORP, they gotta pay taxes! SO....allow them toxic assets to filter to the Fed, collecting them in a special account...This is the "toxic asset" account, when it reaches a certain level (one report has it now at $27 Trill!!!) call Congress,
and Congress imposes a tax on the FEDRSV, and accepts as full payment of that tax...The toxic Asset, which were festering the books!!! Now Fed can write it off their books LEGALLY, because they write in their books they PAID a certain TAX expense to the government! The toxic assets are now GONE from the private side, and now has a POSITIVE VALUE, because "You don't know what you got 'til its gone"!!!
Now its Uncle Sam's turn! Uncle sam now takes that now "Toxic Revenue" and walks it over to the Mint...Burns it up in the Molten coin slurry, and the MASTER COIN FORGER FASHIONS ONE COIN, which the power vested in congress from ART1, Sec8, cls.5 of US constitution, allows it to value that coin at the same value of the toxic asset they just destroyed...
Then they go redeposit that coin into the Fed's bank to repurchase the bonds being held there, and to create an INTEREST-BEARING SAVINGS ACCOUNT Guaranteeing payment of all bonds outstanding held by Foeign or domestic.
Coin is now property of Federal Reserve, taking over as THE BACKING for all the Physical and Electronic Dollars our there in existence. It stops the purchasing power forever sliding down, and even REPLENISHES it back to 1913 strength (or about as far as the 'short sellers' in the currency trade market allow it to get there)
Long story short, PROBLEM SOLVED!!!!

Kapt Blasto of KY 2:10PM August 18, 2009

The toxic assets needed to be taken off the books of banks in order to provide a proper working financial system again, otherwise we would get caught in a vicious circle which would add more damage to us as we have seen so far. You might be right and anxious about your financial matters of yourself, this is abosuletely understandable and inherent, but we should not forget without hitting the nail on the top (solving problems on their deep-sources) things could go absolutely wrong.
Therefore it is better to wait up and see what the new administration is likely to be regarding bearing the fruits from the steps are to be taken. Im very hopefully that the admininstration under the new U.S President, Mr.Barack Obama is going to tackle the crises rightfully and transparently.

Sencan Boz (Turkey-Germany) 1:31PM April 18, 2009

I have one great concern. Will the toxic asset plan lower mortgage rates? I want to refinance to get a lower rate, but I don't know if I should wait, or refinance, now.

Bob Scott of PA 4:10PM April 02, 2009

Lots of lawsuits out there initiated by mortgage borrowers for fraud regarding the mortgage and for fraudulent foreclosures. Guess government, FDIC, and new investors, will have to be added to defendant lists. Fraud against mortgage borrowers have not been focus of US government - but FBI and Department of Justice are working on. Who would want to invest in the liability for toxic fraudulent mortgages???

elle of NJ 9:17AM March 24, 2009

I'm in shock!!!!!!!!!! Obama WAS my hero! He is turning into a piece of Capitalistic Crap>>> Everything he has proposed has hurt the little guy... THE GUY THAT IS PAYING THE BILLS. WHAT'S UP WITH THAT!!!!!!
It is time to move to another country if they will take us.

Rich Kline of GA 12:11AM March 24, 2009

Point Number 6 - According to Zandi, there are between $2 trillion to $2.5 trillion in toxic assets on financial institution's balance sheets. Not to mention Fanny and Freddie.
Here's been the government's strategy:
Almost $800 billion under Bush to bail out financial institutions - with no strings attached and no oversight.
Another $780 billion under Obama, most to bail out financial instituttions - caps on CEO bonuses, and some monitoring.
Another $165 billion to AIG under both administrations mostly to pay off banks in Europe.
Another $40 billion to automakers who are still hemoragging.
Add Geithner's $1 trillion investor/FDIC partnership bail out plan.
That's roughly $2.8 trillion. Enough to get us out of the recession? Not likely because the core issues are not being addressed and resolved... a list for another day.

Tony Lee of CA 7:56PM March 23, 2009