This'n'That; March 24th[ToxicAssets;SeveredArm]

"Toxic Assets-"A Definition[?]

A fresh effort to end the paralysis in lending was launched Monday by the Fluffy administration, which will join with investors to buy up around $500 billion in soured assets from banks. But what exactly are these toxic assets the government wants to get off the banks' books-and how did they get to be poisonous?

Toxic assets are, mostly, the investments backed by risky subprime mortgages that are held by the larger U.S. banks and that have lost value, dragging down their balance sheets and their fortunes. It started in early 2007, when the mortgage crisis hit and defaults on subprime home loans, those made to borrowers with tarnished credit histories, began to climb. That gutted the value of the mortgage-backed securities—subprime mortgages bundled together and sold on Wall Street to investors—held on the books of the big banks. When the banks—like Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co.—started writing down the value of the securities, they reported billions of dollars of losses. Their capital eroded and they didn't have the money to make loans. Credit dried up. Banks large and small foundered and failed. The crisis was in full throttle. There now are an estimated $2 trillion in bad assets on banks' books. The official value of these assets has become very low because current market conditions would make it hard to fetch much for them. The theory is that they'd be worth a higher and more realistic price if sold in a more orderly, less "forced" manner. The main focus for the new program is on assets tied to residential and commercial mortgages. But the Treasury Department said that could evolve, based on market demand, to embrace other types of assets. That could include securities backed by credit card debt, student loans or auto loans, which have suffered in recent months from rising defaults and have been aided by lending from the Federal Reserve. The phrase seems to have come into usage not long ago, in mid-2007. Before that, from the savings and loan crisis two decades ago up through the 2007 meltdown, they were called bad assets or troubled assets, but not toxic. The Fluffmeister avoided using the "T" word in his statement Monday on the new plan. He called them "bad" assets. But the administration's new code phrase for them, used by the Treasury Department, is "legacy assets" because they've been around so long—and it sounds a lot less noxious.

[No matter whatt'cha call 'em... they're still worthless! Fluffy and "Turbo-Tax" Tim are counting on those investors in the public to not see thru the current round of "smoke and mirrors." A public-private partnership-how exactly, is that gonna work? I've never seen a partnership that's diametrically opposed, philosophically, succeed. The "investor" by definition, is conservative; the Fluffy government as they've deomonstrated, is socialist. This is all about control; more and more control of the American economy! How much input do you think "the investor" is gonna have in this partnership? In a business relationship, the two would be akin to trying [and failing] to mix oil and water. They don't and won't mix! Check this out- In the Scandinavian banking crises (Sweden, Norway, Finland) that are a model of how a banking crisis should be resolved there was not government purchase of bad assets; most of the recapitalization occurred through various injections of public capital in the banking system. Purchase of toxic assets instead–in most cases in which it was used–made the fiscal cost of the crisis much higher and expensive (as in Japan and Mexico). In recent days, The Fluffmeister's handlers have expressed a desire to explore the possibility of restricting ALL executives' compensation. Given that advancement of socialism, "the investors" have government pay restrictions to look forward to as well.]

One Lucky Kid....

A teenage boy whose arm was severed during an accident at a Portland Avenue laundromat survived an operation Friday evening, city police Capt. Kevin Costello said. The teen, who police said was about 13, was doing laundry at about 5:50 p.m. and reached into a washing machine to remove a sheet. His arm became entangled in the sheet and was severed by the machine. He was transported to Strong Memorial Hospital, where he underwent surgery. Costello said he did not know whether doctors were able to reattach his arm. [Word is the arm was re-attached and expected to thrive.]

Til Nex'Time....