Archive for February 9th, 2009

The US government’s latest bailout strategy will target big investors to buy more than $1 trillion in troubled assets from the banks. ‘The hope is that, free from the drag of subprime mortgage debt and other bad investments, banks will be more likely to start lending money again and the economy will rebound’.

But investors said Monday they were unlikely to buy into the idea unless the government puts up a lot of the money and promises to absorb a lot of the losses if things go badly.

“The first loss has got to be the government’s,” said Wall Street veteran Muriel Siebert, who runs the brokerage Muriel Siebert & Co. “Maybe the first 25 percent of losses. We don’t know what’s in some of those bonds.”

Billionaire Wilbur Ross, who runs the private equity firm WL Ross & Co., said investors want to know how much risk the government will accept if the investments go sour, and how much money the government is willing to put up — likely in the way of low-interest loans.’
Investors want the Obama administration to give them a free hand in other words to continue business as usual. Had they learned to be committed and responsible with other people’s money this LaurelenHardian ‘fine mess’ would not have arisen in the first place. Now it looks the investors want to play with tax money of the Americans once again. Of course all that havoc they would create if their optimism were to go haywire in future transactions they can blame it on the Administration. This must be what motivates their demand for a deal.( ack: Matt Apuzzo and Stevenson Jacobs, Associated Press)


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