Sometimes I think the technology industry is in a competition with the government on who can use the most confusing acronyms. The FDIC, that is the Federal Deposit Insurance Corporation, is going to focus the newest bailout program called the PPIP, or the Public-Private Investment Program, on commercial and residential real estate.
(I need to take a deep breath after that.)
What it essentially means is that the government is going to buy out the bad loans from banks and then sell them at a discount to other banks or hedge funds. You know, those evil bankers and financial folks like those at AIG.
The PPIP, introduced by the U.S. Treasury Department Monday, is designed to help banks to rid themselves of loans that hurt their operations and capital. The program will give guarantees and some leverage to private investors to buy such loans.
Real estate is where the biggest problem lies, the FDIC said during a conference call, and therefore the program will focus on those areas first, but could later include other consumer and commercial loans. WSJ.com.
But what makes me wonder is how well this is going to work. The Congress and the Obama administration has just vilified anyone who is working for a bank that receives Federal funds with the whole AIG debacle. Why would any bank want to do business with the government now when the government has proved they are willing to attempt to tax them at 90% on any profits they think are unfair?
The system is turning into pure madness.
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BTW, borrowers want to take part of the deal, if they pay their loans:
see FairPPIP.org
I really wish their was a clear solution to this mess. It just seems to be a pile of problems that just keeps getting taller.
Why do you headline that are a year old such as the WaMu Seized by FDIC?
Do you think that paying bonuses with bailout funds is good idea?
What should the rules be if the FEDs insure your deposits and bail you out? Does a bank have any responsibility to employees? FDIC? Public? Taxpayers? Shareholders? Or just to himself (seems to be norm)?
One problem is that each side of a complex political issue first villifies the other side. The AIG bonus issue was complex. How important was it for AIG to retain employees with talent to manage assets? Or, should employees just leave in shame becasue they work for AIG?
I dont think writers or public bother to investigate the real issues. The writers have a responsibility to try to illuminate the issues